Russia Formally Arrests American Businessman

Case threatens to exacerbate already strained relations between Washington and Moscow

MOSCOW—The American founder of a private-equity firm detained this week in Moscow on fraud charges was formally arrested Saturday and is set to remain in custody for at least about two months.

Michael Calvey, founder and senior partner at Baring Vostok Capital Partners, was detained on Thursday along with three other employees, the investment company said in a statement.

Mr....