The Tokyo-based gang is alleged to have stolen a total of 100 million yen ($900,000) from about 700 people by setting up a fake Yahoo Japan auction website.
Police said the gang used stolen identities of internet users to create fake auctions offering watches, luxury handbags and MP3 players on the real Yahoo website, which is Japan's largest internet auction service. But the gang never intended to deliver the goods and kept the money that was wired to them by innocent purchasers.
Thirty-four-year-old Takayuki Matsuoka and 38-year-old Akio Usami, who have been named as the ringleaders by police, were arrested in Tokyo. A 20-year-old man, Naoya Takahashi, was also caught and is thought to have created the fake website to steal personal data from people. Four other men and one woman have also been arrested.
The gang are being charged with fraud and unauthorized computer access, according to the police who say that the group has been active since June 2005.
"The Japanese police should be applauded for taking a tough stand against organized phishing criminals," said Graham Cluley, senior technology consultant for Sophos. "As gangs becoming more sophisticated in the ways in which they attempt to steal information from online banking users, computer crime authorities around the world need to work more closely with each other to bring them to justice."