The arrested person was identified as Santosh Behera of Nayapalli in Bhubaneswar, police said.
As per an FIR filed with Kuakhia police by Hrudaya Kumar Sahu, the man came to his coal briquettes factory at Suansahi village in a car on Thursday and identified himself as the DSP vigilance. As vigilance officials do not wear police uniforms, the trader believed him.
Later, the fake DSP asked the trader to show his pollution certificate and other related papers of the plant. When the trader failed to show the documents, the accused threatened the trader to arrest him on charges of running the industry without any requisite papers.
He then demanded Rs 20,000 to protect the trader and the latter paid Rs 15,000 cash for the same. Before leaving, the fake DSP asked the trader to meet him in his office for a final discussion. The next day, the trader went to the local DSP vigilance office at Jajpur town and did not find him.
This afternoon, while the trader was chatting with three of his friends at Kuakhia bazaar, he suddenly spotted the man who had conned him posing himself as the DSP and showed the cheat to his friends. They immediately caught the man and handed him over to police.
Receiving information about the arrest of the cheat some more traders have also come out to say that they were also conned by the man in similar manner, police said.
During questioning, the accused told cops that he was acting as a broker in pollution control board to facilitate traders who were applying for pollution certificate.
"We are probing the identity of the man and in touch with the Bhubaneswar police to establish the same. We are also probing whether any other traders were conned by the same man or his associate as more traders claim they were conned in the same way," said Bijay Kumar Aich, inspector-in-charge of Kuakhia police station.
