SAO PAULO (Reuters) - Brazilian police have arrested a man designated by the U.S. Treasury Department as a high-ranking Hezbollah financier after neighbouring Paraguay sought his detention on identity theft charges, authorities in Brazil said on Friday.

In 2004, U.S. authorities designated Assad Ahmad Barakat as one of Hezbollah's "most prominent and influential members." They said he had long served as a treasurer for the group and was an associate of the then-financial director of Hezbollah, a militant group based in Lebanon.

It was not immediately known if Barakat had a lawyer.

Brazilian federal police said in a Friday written statement that the country's Supreme Court authorized his arrest after Paraguayan authorities issued a warrant late in August.

Police also said Argentine authorities accused him of laundering $10 million through a casino in the border city of Puerto Iguazu.

Barakat was previously imprisoned in Paraguay from 2002 to 2008 on charges of tax evasion. After his release, Brazilian police said, Barakat lived in Brazil, and carried out business activities in Paraguay, Argentina, and Chile.

(Reporting by Gram Slattery; Editing by Brad Brooks and Bernadette Baum)