National Accountability Bureau officials arrested Malik Naveed Khan when he arrived in Peshawar from Islamabad to attend a meeting.
He will be presented in court tomorrow, officials said.
Khan was also accused of misusing his position as the head of the Frontier Constabulary and conducting the illegal recruitment of about 500 people.
The case, which was earlier probed in 2011, was revived as part of NAB chief Qamar Zaman Chaudhry's initiative to review old cases.