The two men, who have been under investigation since August, were caught smuggling asylum seekers from the Indian state of Punjab into Germany.
Police believe the two men worked with accomplices in Dubai and India who allegedly forged travel documents and visas. The asylum seekers paid between €8,000 and €12,000 to fly out of New Delhi, Cairo or Dubai into Frankfurt or Prague.
The 43-year-old main suspect picked up the new arrivals and helped them apply for asylum under false identification, the state police reported. The man was picked up along with his 22-year-old accomplice in Halberstadt. There is also a warrant for the younger man's arrest out in Italy.