A 39-year-old gangster was arrested Tuesday in Shizuoka on suspicion of passing fake 10,000 yen bank notes in Tokyo, according to police sources.
Arrest warrants have been obtained for two other men in connection with the case, they added.
The police suspect that Tatsuya Kudo -- 39, who was indicted in a separate counterfeit case in January in the city of Fuji, Shizuoka Prefecture -- and others passed the bogus bills in Tokyo's Shinjuku Ward the same month.
The police will soon move Kudo to Tokyo as part of an investigation into how he obtained the bills passed in Tokyo, according to the sources.
Kudo was arrested by Shizuoka police on suspicion of passing seven fake 10,000 yen bills at a shopping arcade. Some 400 fake 10,000 yen bills were found at a parking lot in front of JR Fuji Station in a car rented by Kudo.
Police are still looking for two men -- a 33-year-old Japanese and a 39-year-old Taiwanese -- believed to be Kudo's accomplices.
The Taiwanese man was seen in a Tokyo hotel on Jan. 4 with another Taiwanese who is on an international wanted list for using counterfeit 10,000 yen notes in Tokyo's Asakusa district, the sources said.
More than 1,000 bogus 10,000 yen bills with finely crafted watermarks have turned up in Tokyo, Osaka, Shizuoka and other prefectures since the beginning of this year.
Investigators suspect an overseas criminal organization.
Seven people have been arrested for allegedly using fake 10,000 yen bills -- Kudo, five Taiwanese in Osaka and a Chinese in Tokyo who entered Japan via Hong Kong.