Célio Marcelo da Silva, known by his chosen alias of "Bin Laden", is thought to have been the brains behind at least 11 snatches, including that of the mother of the footballer Robinho, Marina da Silva Souza. She spent 41 days in captivity last year.
After receiving a tip-off that da Silva was about to leave the city, police tracked him down to Morumbi, an upper-class region in Sao Paulo's south zone.
Night was falling when security services surrounded the kidnapper's black VW Golf on Avenida Giovanni Gronchi. In the gun battle that followed da Silva's girlfriend, Taiane de Melo Batista, 24, was wounded.
Along with false documents, police said they found two .38 calibre revolvers in the car - the "tres-oitao", standard kit for the drug gangs that dominate Brazil's larger cities.
Friday's arrest punctuates a traumatic year for those caught up in this latest spate of "sequestros". Following a series of kidnappings, mostly in Sao Paulo, Brazilian football clubs have stepped up security around their players. Since December five players' mothers have been abducted.
Robinho, who uses only the one name, was negotiating a multi-million pound move to Real Madrid, sealed last month, when armed men snatched his mother from a barbecue on the Sao Paulo coast in December. She was dumped on the city's outskirts 41 days later after the payment of a ransom, thought to be about £50,000.
Mrs da Silva Souza's head had been shaved and police said "Bin Laden's" men had subjected her to psychological torture. On arrival at the police station, an exhausted looking Mrs da Silva Souza told reporters the only things she wanted were coffee and a cigarette.
In May the kidnappers struck again. The mother of the Corinthians defender Marinho was snatched from her home in the impoverished Aparecida housing project in Santos. On this occasion the kidnappers were disguised as florists.
The mothers of three other high-profile Brazilian players - Rogerio, Grafite and Luis Fabiano - have also been kidnapped this year by gangs seeking to cash in on the players' mammoth pay cheques.
Police say "Bin Laden" was the leader of Sao Paulo's biggest kidnapping gang. On the run since 2002, when he tunnelled out of the Carandiru prison with 28 fellow inmates, he worked alongside Ediraldo Oliveira Freitas, or "Galo", targeting wealthy families and businessmen in Sao Paulo and the neighbouring state of Minas Gerais.
Another member of the gang, Andre Luis Ramos, "Barba", is accused of kidnapping Ines Fidelis Regis, the mother of Rogerio, who plays for Sporting de Portugal.
The targeting of wealthy footballers is new, but kidnaps in general are old news in Brazil. Last year 83 cases were registered in Sao Paulo, where rich businessmen and their families, fearful of being taken hostage, routinely travel in bullet-proof cars with tracking devices and blacked-out windows.
This year has already seen a 27 per cent hike in the number of kidnappings compared to 2004.
In response to the 28 kidnappings already reported this year in the city, the Sao Paulo governor Geraldo Alckmin recently pledged to build a special prison for kidnappers.
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