Arbaje-Diaz pleaded not guilty Friday at his arraignment.
The arrest "brings dishonor to the proud reputation of the thousands of law enforcement officers in New York who put their lives on the line every day to protect their residents and communities," U.S. Attorney Benton Campbell said in a statement.
Police Commissioner Raymond Kelly called the allegations "despicable." He added there was no evidence that other officers were involved.
Arbaje-Diaz, 30, was arrested and suspended from the force shortly after midnight Friday following a tour as a transit officer in the Bronx. In court, the officer's lawyer asked prosecutors for details of his client's statements and results of a search of his home but didn't comment on the case.
The officer was among three men arrested Friday in an ongoing investigation by the NYPD, the Drug Enforcement Administration and New York State Police. Ten other suspects were charged earlier this year in what officials described as one of the more brazen and lucrative robbery operations in recent memory. All 13 are from the Dominican Republic.
The spree netted more than 1,650 pounds of cocaine, worth $20 million, and $4 million in cash, starting in 2003. At least 100 people were injured.
Investigators say the gang paid informants to provide the names and whereabouts of traffickers around New York City, Massachusetts, Pennsylvania, North Carolina and Florida. After that, it conducted surveillance for days or even weeks, sometimes using satellite tracking devices.
Once the crew had a fix on its targets' daily routines, it would use fake squad cars equipped with lights and sirens to trick their victims into stopping. They would invade homes the same way, then handcuff the inhabitants and haul them away at gunpoint.
Arbaje-Diaz - "a vital and active member" of the gang - once "left patrol still wearing his NYPD uniform and carrying his official firearm, badge and handcuffs to meet members of the crew and carry out a robbery," court papers said. "He used his status as a police officer ... to illegally demand access to the homes of his victims."
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