IO DE JANEIRO, March 11 - After a manhunt that lasted nearly a decade, the Chilean and Argentine police on Friday announced the arrest of the fugitive leader of Colonia Dignidad, a bizarre paramilitary religious sect of German émigrés established in southern Chile in the early 1960's that later allied itself with the dictatorship of Gen. Augusto Pinochet.

The Argentine authorities said Paul Schafer, 83, a former Luftwaffe medic, was apprehended Thursday afternoon in a gated community outside Buenos Aires. He was convicted in absentia by a Chilean court late last year of committing sodomy and pedophilia with 26 children, and also faces accusations of human rights abuses and numerous charges of kidnapping, forced labor, fraud and tax evasion in Chile.

Mr. Schafer, a lay minister who preaches a fiery brand of apocalyptic fundamentalism that is strongly anti-Communist and anti-Semitic, was known to the approximately 300 residents of the Colonia Dignidad commune as "the Permanent Uncle." He controlled every detail of their lives, deciding whom and when they could marry and often ordering that babies be taken from their parents at birth and raised collectively under his charge.

According to human rights groups, Colonia Dignidad served as a clandestine torture and detention center during the Pinochet dictatorship. Not only did the group supply Chilean military intelligence with a house that was used as a regional headquarters, but political prisoners the government wanted to stash out of sight were also transferred to secret cells in Colonia Dignidad, according to survivors and a Chilean government human rights report.

Among the group's other victims may be Boris Weisfeiler, an American mathematics professor who disappeared while hiking near Colonia Dignidad early in 1985. A Chilean military informant later provided an account, which the American Embassy deemed "plausible," saying Dr. Weisfeiler, a Russian Jewish immigrant, had been executed there on Mr. Schafer's orders.

Because of its ties to the Pinochet dictatorship, Colonia Dignidad was allowed to function as "a state within a state," in the words of a Chilean congressional investigating committee. Barricades, barbed wire, roadblocks and searchlights were used to keep the outside world at bay.

With the return of democracy to Chile in 1990, Colonia Dignidad fell into disfavor with the new government and soon lost its charity status. But powerful allies within the military and intelligence apparatus continued to protect the group until 1996, when a student at the sect's boarding school smuggled out a letter to his mother complaining that Mr. Schafer was sexually molesting him.

Since then, Mr. Schafer has been on the run, with sightings of him reported in various parts of Chile and Argentina. Chilean authorities said Friday that they would like to see him expelled from Argentina, which would avoid a long, drawn-out extradition battle, but Germany and France have also filed charges against him.