Police allege that Fabrice Derozie, 48, used a Thai massage shop in Viset Road in the Rawai-Chalong area as a front for selling illegal drugs.
Mr Derozie was allegedly trapped in a police ''sting'' when a plain-clothes officer sought to buy cocaine vaued at 20,000 baht.
He was arrested in his room at Ira Mansion in Chalong and a search of the massage shop turned up a combined total of 26 grams of cocaine, one pack of marijuana and 104,000 baht in cash.
The arrest took place on Friday. It is understood that Mr Derozie's Thai wife left him earlier this year, with their five-year-old child.