22-year-old Caroline Mariyath, who is said to have worked as a lead actress in a couple of big Tamil films, is also a model for several diamond and textile companies in Chennai and Bangalore. Police claim that her clients used to pay three lakhs each.
"We laid a trap and sent a decoy customer. Caroline is quite popular in Chennai. She has played heroine in movies - 'Rain', 'Wadachalam' and others," Senior Inspector (Crime Branch) Bhanupratap Barge said.
Ms Mariyath's manager and film studio owner M Rajkumar has also been arrested.
A case has been registered against her at the Viman Nagar police station.