Police in Naples said Wednesday that the suspects were picked up in cities including Rome, Genoa, Bologna, Naples and Palermo at the end of a two-year investigation. Two more were being sought in Naples.
Police believe the suspects, all Sri Lankan citizens, extorted money from their fellow nationals in the various cities and sent it home to finance the rebel group.
Luigi Bonacura of the Naples police said the operation effectively dismantles the Tamil Tiger network in Italy.
The Tamil Tiger rebels have fought since 1983 to create an independent homeland for Sri Lanka's ethnic minority Tamils.