Falciani is accused of handing over the account details of up to 24,000 HSBC Private Bank (Suisse) clients to French tax authorities dating back to 2005 and 2006.
A spokesperson from the Swiss Federal Department of Justice and Police confirmed to PBI that the former computer specialist was arrested three weeks ago.
"The French-Italian citizen Hervé Falciani has been arrested in Barcelona on July 1, 2012. The Federal Justice Office (OFJ) made a search request based on an arrest warrant released by the Confederation Public Minister (MPC). The MPC has opened a criminal inquiry against the ex-HSBC computer expert in relation to the theft of bank data at HSBC."
Swiss authorities said they had been investigating the matter since 2008 before issuing an international warrant for his arrest in August 2010.
In 2009, Falciani admitted to leaking data to French authorities to expose tax evaders amongst HSBC’s customers. In an interview with France television he said that the action was his civic duty.
Information provided to European authorities about citizens who have evaded taxes by holding taxable assets in Switzerland has led to millions of euros being repatriated to government coffers.
On July 4, UK property developer Micheal Shanly became the first high net worth investor to be convicted of tax avoidance using data linked to the theft of the HSBC Private Bank client account details.
Shanly, estimated to be worth £157m, ($243m) was fined £830,000 ($1.28m).
If found guilty Falciani could face a fine up to CHF250,000 ($253,000) and up to three years in prison.
Source: Private Banker International