A baby boy with a deformed leg was sold for RM6,000 (S$2,450) in Klang, Oriental Daily reported.
The amount is low. A healthy baby boy can normally fetch up to RM20,000 in the black market, the paper added.
The five-month-old baby was sold to a childless couple from Singapore last November.
However, before the deal could be sealed, police moved in to cripple the syndicate on April 6.
They traced the baby to the Perdana Villa apartment at about 5.45am on Tuesday.
Klang police chief ACP Mohamad Mat Yusop said the baby had complete registration documents and the couple had been remanded for questioning.
Nanyang Siang Pau, which also reported the same story, quoted ACP Mohamad as saying that police were hunting for other members of the syndicate, including its mastermind "Ah Lian" and another woman.