The fraudsters are said to have acquired credit cards using the names of foreign students and then using the cards to purchase electronic equipment over the internet.
According to the Metro newspaper, the gang has also used the scheme to obtain mobile phone subscriptions, purchase clothes on credit, and take out loans from a bank.
The fraud is said to be sophisticated and has been under investigation for several months.
Officials expect the amount of money involved to grow.
“Every time we turn over a stone, we find something new,” said prosecutor Carl Asterius to the newspaper.
Police suspect the ringleader is a 29-year-old resident of the Stockholm suburb of Huddinge.
According to Asterius, charges could be filed just after the new year.