Michael Voudouri had pled guilty at the High Court in Glasgow in relation to money laundering linked to VAT fraud but failed to appear for sentencing last March.
HM Revenue & Customs said he was estimated to have cost taxpayers £10 million.
He was said to have been arrested at his home in northern Cyprus after allegedly using a forged passport.
He appeared in court in Nicosia on the island on Tuesday but has yet to be formally charged.
Voudouri was on a list of most wanted tax fugitives published by the UK Government last August.
His associates Richard Housley and Caroline Laing were jailed for four years and two-and-a-half years respectively.