Phillips George, 51, was arrested yesterday after at least five students, aged between 12 and 15 years, had lodged a complaint against him Koraput Sadar police station on December 3, they said.
Senior officials of the organisation were not immediately available for comment.
Around 250 students studying at nearby government-run school stay at the CDC.
"Everyday, George used to call two girls to his room on the pretext of teaching them and sexually exploited them. The inmates were also threatened of dire consequence if they spill the matter to anyone," said B N Korkora, inspector-in-charge of Koraput sadar police station.