"We have arrested Sayed Masood from New Delhi and he will be brought to Mumbai and produced in a court," said an ED official here.
Masood is accused of duping thousands of investors through his companies City Limouzines and City Realcom.
The ED had registered a case against Masood under the Prevention of Money-Laundering Act (PMLA), and in April this year attached his properties suspecting they were purchased from proceeds of the crime.
Mumbai Police had earlier lodged a cheating and fraud case against the businessman for allegedly duping people by promising unrealistic returns on their investments through various schemes.