Masa "Kimio" Yoshimoto, 37, had jumped bail after he was charged with attempted extortion and blackmail, Central Investigation commissioner Lt General Thangai Pratsajaksatru told a press conference.
The Japanese Embassy had also requested Yoshimoto's capture because the reported leader of the Yamaguchi gang was wanted for the attempted murder of a Yanatori gang member in the city of Osaka in Japan on May 29, 2006, Thangai said.
Yoshimoto reportedly used a fake passport to enter Thailand where he stayed for three years, he said.
During that time, when he was financed by the Japanese gang, a Thai woman filed a police complaint accusing him of demanding Bt2 million($0.08 million) in exchange for a compromising video clip.
The man then used fake documents to seek temporary release and jumped bail twice before he was arrested yesterday.
Police would take legal action against him for attempted blackmail and fabrication of official documents, before contracting the Japanese Embassy about his extradition.