John Deuss was arrested following the closing of his First Curacao International Bank last month, which is suspected of being involved in running the banking services for criminals behind the carousel fraud.
Carousel fraud involves the trading of VAT-free goods across international borders, which are then sold at VAT-inclusive prices, with the tax payments to relevant governments never made.
It is estimated that First Curacao International Bank made sums in the region of hundreds of millions of dollars in profits.
Mr Deuss was arrested by Dutch police in connection with the alleged offences late last week, according to prosecutors.
The banker and oil baron, who has been living in Bermuda and recently resigned as a board member of Bermuda Commercial Bank, has denied the charges against him.