Dawood Ibrahim’s younger brother Iqbal Kaskar was arrested on Monday evening over allegations of extortion, reports said.
Kaskar was arrested by former encounter specialist Pradeep Sharma who was reinstated last month.
The case has been registered at Kasarvadavali police station in Thane.
Along with Kaskar, two others have been detained.
According to sources, Kaskar was arrested on a complaint filed by a builder.
The builder has alleged that Kaskar had already taken four flats from him and has been demanding more flats.
On complaint, a team headed by Sharma raided Gordon Hall apartment in Nagpada in South Mumbai.
Kaskar shifted to the apartment belonging to his slain sister, Haseena Parkar after the recent Bhendi Bazar building collapse.
Kaskar used to stay in neighbouring Damarwala building and vacated the building hours after the collapse.
Iqbal Kaskar, Dawood Ibrahim s fifth sibling, had been deported to India from the United Arab Emirates in 2003.
He was wanted in a murder offense and also for his alleged role in the Sara Sahara case where a building came up illegally on government land.
However, Kaskar was acquitted by a court in both cases in 2007.