The international sting operation involved Spanish police and their counterparts in France and Luxembourg, Spanish police reported on Monday.
Sixteen people were arrested, including eight in Spain.
Among the items seized by police were six pistols, various luxury watches and €124,000 in cash.
The gang operated by taking people hostage and threatening them until they handed over vast quantities of cash and valuables.
In one incident, six businessmen were 'recruited' in Morocco by a high class prostitute who lured the men with the promise of a highly profitable software business.
To complete the deal, the men were required to bring a substantial amount of cash to Paris. Those men were then locked in a Paris hotel until they handed over nearly €1 million in ransom money.
On another occasion, the bandits took 15 people hostage in a Luxembourg jewellers before eventually walking away with €2,300,000 in cash, jewellery and watches.
The hostages were made to wear fake explosive jackets which they were told would be detonated if they tried to run.
After these incidents, the leader of the gang fled to the southern Spanish resort town of Torremolinos to lay low.
The trail heated up, however, after the man was pulled over for a routine traffic stop near Malaga.
While police were checking the gang leader's false papers, he sped off in his car, Spanish police said in their statement.
Spanish investigators then began to chase down the criminal and the other members of his gang.
Several weeks later, police spotted the gang leader on the street and carried out a routine control.
He was immediately arrested. Police also identified the watch he was wearing as one taken from the Luxembourg hijacking incident.