Jesus Angel Bergantinos Diaz was allegedly involved in the sale of fake masterpieces purporting to be by artists like Mark Rothko and Jackson Pollock - works that were actually done by a Chinese painter he met on a Manhattan street corner.
US investigators say the Spaniard, his brother Jose Carlos - deemed a leading figure in the scam - and others sold the fake works of art to galleries in New York over two decades, grossing some $33 million (€29.6 million) in the process.
They then laundered the money and hid it overseas.
Spain's National Court said Bergantinos, 67, was wanted by US authorities for money-laundering and fraud.
He was arrested in April 2014 in the northwestern Spanish city of Lugo, while his brother Jose Carlos was detained that same month at a luxury hotel in the southern city of Seville.
Both refused voluntary extradition and were ordered to surrender their passports and remain in Spain pending extradition hearings.
US prosecutors said Jose Carlos would buy up canvases of old paintings at flea markets and stain newer canvases with tea bags, which he gave to Pei-Shen Qian, the Chinese painter, to create what have been dubbed "the Fake Works."
Among the bogus paintings were some purportedly by Rothko, Pollock, Willem de Kooning, Richard Diebenkorn and Robert Motherwell.
In September 2013, Jose Carlos' girlfriend, Mexican-US art dealer Glafira Rosales, pleaded guilty before a US federal judge to selling counterfeit paintings to two of New York's top galleries.
Qian, meanwhile, is suspected of having fled to China.
The National Court will now have to decide whether or not to extradite Jose Carlos.