In February, the cricket impresario and former wealth management magnate was charged in a civil case brought by the Securities and Exchange Commission (SEC), which accused him of perpetrating a "massive fraud" by soliciting investors' money with the promise of "improbable and unsubstantiated high interest rates".
The SEC said the Ponzi scheme was worth around $8 billion.
Sir Allen's lawyer said the billionaire had been arrested in Virginia yesterday (June 18th) after walking over to FBI agents parked outside his girlfriend's house and asking if they had a warrant.
The businessman, who was knighted in 2006 for his services to Antigua and Barbuda's economy after taking dual citizenship, has always denied any wrongdoing.
Earlier this year, he gave an interview to American TV network ABC, in which he described the charges against him as "baloney" and insisted he had not operated a Ponzi scheme.
At the time, he said: "If it was a Ponzi scheme, why are they finding billions and billions of dollars all over the place?"