Toronto police say they arrested Leonard Nwafor, 47, on an extradition warrant at his residence on Wednesday.
In September 2008, Nwafor was convicted on two counts related to health-care fraud for submitting fraudulent claims to Medicare through his Los Angeles-based company, Pacific City Group Inc.
Shortly after the conviction, Nwafor fled California and was sentenced in absentia to nine years in prison and ordered to pay $526,243 in restitution and $25,000 in fines.
He was also ordered to forfeit more than $526,000 in stolen funds to the U.S. government.
Authorities believe he has been living in Canada since he fled.
According to the U.S. Department of Justice, most of the fraudulent claims were for high-end wheelchairs and accessories that were not required by patients.
Nwafor had billed Medicare on behalf of 170 people, including one person who was blind and was physically unable to operate the equipment.