Acting on a complaint of a trader, the three persons, including two women, were arrested from Chandori village near here in connection with the racket, Kotwali Police Station in-charge Shyamchandra Sharma told reporters here.
The trader had alleged that he was being blackmailed by few persons running the racket and they were demanding Rs two lakh from him claiming they had an obscene CD featuring him.
The victim had already paid Rs 70,000 to them. The arrested persons were identified as Kamlesh Patle, his wife and another woman, Sharma said.
The kingpin of the racket was Sub-Inspector Mekhram Shrineel, currently posted in Bamni Banzar police station of Mandla district, police said.
He along with three others involved in the racket are absconding, they said.
