The suspect, a Romanian national in his 20s, was detained by officers from the Gangmasters and Labour Abuse Authority (GLAA) in East London on Wednesday, 21 February.
GLAA investigators, supported by Met Police, carried out raids on on five residential addresses in Barking, Walthamstow, Forest Gate, Ilford and Newham as part of the investigation.
The action follows intelligence relating to allegations of labour abuse on construction sites across the capital, threats of violence and false identities being used.
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More than 50 people, all believed to be Romanian or Moldovan nationals, were discovered to be living at the five addresses which were raided. In one terraced house, 23 people were found to be living in cramped conditions, including six women and two young children.
The GLAA said 10 of the people have been taken to a reception centre, including two 15 year old boys, where they are being given the opportunity to speak to specially trained officers about their circumstances.
The suspect is being held for questioning at Gate Police Station.
GLAA Senior Investigating Officer Tony Byrne said: "Our capability to investigate and take action to disrupt alleged criminality and labour abuse is increasing. Our priority is to protect vulnerable workers from exploitation and today's action demonstrates we will act when our intelligence suspects labour offences are being committed."
(LM)
