A Taiwanese man was taken into custody for allegedly swindling millions of Taiwan dollars by selling Sesame Street dolls and other items which he claimed had "magic powers," according to police.

The suspect, identified by his surname Lin, was accused of conning some Tw$3 million ($100,000) from a businessman with products including an Elmo doll, a Sesame Street muppet, which he said was "holy" and could bring luck, they said.

The man, who claimed Lin also asked him to "buy property in the underworld," later contacted the police after he realised he had been scammed.

Lin was also suspected of selling the dolls to other victims for up to Tw$1 million apiece, as well as touting a variety of products for their alleged healing effects.

Police said they will continue to investigate Lin, a temple keeper in northern Taoyuan county, after they found documents with information on a large number of "followers" from the past several years at his home and temple.