A Home Office case worker allegedly tried to sell UK residency for £2,000 to an asylum seeker living in Northern Ireland.
The employee was arrested after being suspended by the Home Office.
It is alleged that the worker contacted a vulnerable man and asked for £2,000 in return for approving his refugee application.
Officers are now investigating the claims after being called in by the Home Office, which said that it expected "the highest standards" from its staff.
A Home Office case worker allegedly tried to sell UK residency for £2,000 to an asylum seeker living in Northern Ireland
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The victim, identified as Renas, said that he was contacted by a staff member employed as an asylum "decision maker" in the north of England.
In early March, Renas said he received a call where the person claimed that "95 per cent of people like you" have their applications rejected.
The employee reportedly suggested a direct payment would warrant success.
“He said I could be sure he would refuse my application,” Renas told the BBC. But if I could help him, he could help me and he asked for some money. He asked for £2,000.
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"He basically offered me a positive decision."
The former journalist initially thought it was "a total scam", but soon realised that the man worked at the Home Office.
Video footage has also been passed onto police which appears to show a person using a laptop which features the official Home Office software.
The victim, identified as Renas, said that he was contacted by a staff member employed as an asylum "decision maker" in the north of England
PAIn a statement, Lancashire police said: "We can confirm we have arrested a man on suspicion of misconduct in public office, suspicion of money laundering, bribery, and computer misuse offences.
"Officers from Lancashire Constabulary alongside partners from the Home Office arrested the man, in his 30s, in the Ramsgreave area of Blackburn. An investigation remains in its early stages and enquiries are ongoing."
A Home Office spokesman said: "We expect the highest standards from our staff to ensure asylum claims are properly considered, decisions are sound and that protection is granted to those who genuinely need it.
"The member of staff was arrested and suspended. It would be inappropriate to comment further as the matter is subject to a live police investigation."