The accused, Kanhaiya Kumar (33) alias Dr KK, was arrested from west Delhi's Mayapuri on Monday afternoon by the Special Cell, they said.
Introducing himself as a director in the Prime Minister's Office, he approached the central vigilance commissioner (CVC) last month and inquired about a posting for an official of the IDAS.
The CVC became suspicious about Kumar's credentials and on inquiring at the PMO, he found out that there was no officer in that name.
Kumar used to carry visiting cards with PMO director written on them and would confidently walk into offices to seek meetings with senior bureaucrats, said an investigator.
He was provided fake visiting cards by his Hyderabad- based aide Chandermoulli. A team has been sent to Hyderabad to look for aide.
Kumar, who originally hails from Bihar's Madhubani, used to run a call centre in south Delhi's Neb Sarai but had to shut it down after he suffered losses.
It is suspected that he has sought personal favours from other senior officials by posing as PMO director. A car with a Government of India (GOI) sticker on it was also seized from his possession.
Kumar claimed that he has a PhD degree that the police suspect to be fake.
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