The Interior Ministry said in a written statement Alexei Kuznetsov was picked up at an unspecified location at the request of the Russian government, which has charged him with defrauding the Moscow Region government out of 3.5 billion rubles ($105 million), the ITAR-Tass news agency said.
It was not known when Kuznetsov would be returned to Russia.
Kuznetsov was a deputy prime minister and allegedly led a scheme in which utility payments were siphoned off. Russia's RIA Novosti said the losses from 2005-08 contributed to a downgrade of the region's credit rating.
Kuznetsov had been considered a fugitive since 2008 and was reported to have moved to the United States.
The Interior Ministry said he was in possession of several forged passports at the time of his arrest.