Richard Chichakli, 53, was detained in Melbourne, Fairfax Media reported. He faces extradition to the United States.
Officials said Chichakli, a U.S. citizen who has been a fugitive since 2005, is believed to have entered Australia on a false passport. He apparently came to the attention of authorities when he applied to be a protective services officer in the state of Victoria, a job where he would have been guarding government officials and protecting public buildings.
U.S. prosecutors say Chichakli conspired with Viktor Bout, a Russian arms dealer, to supply military equipment to former Liberian President Charles Taylor. Bout, who inspired the movie "Lord of War," was convicted in 2011 in federal court in Manhattan and sentenced to 25 years.
Chichakli has said he met Bout in 1995 and they have remained friends. He acknowledges some business dealings with him but says none of them were illegal.