There is a question on travel.SE asking what to do if some culprit planted contraband in your luggage. There are some links provided to cases where this is suspected to have happened.
Being able to wrap your luggage at many airports suggests that there is some risk that this could indeed happen.
Are there documented cases where it has been proven that innocent people were arrested for possessing contraband that was planted in their luggage?
A Slovak citizen (without his knowledge) had a detonation device planted in his luggage by security personnel as part of airport security test. The device was not found at the airport and the person was arrested later in Dublin after the Irish police were informed about the device.
Source: IDnes news article Jan 5 2010:
Irská policie zatkla Slováka, který nevědomky dopravil do Irska 90 gramů výbušniny, krátce poté ho ale propustila. Výbušninu mu totiž v rámci nepodařeného bezpečnostního experimentu do zavazadla dali slovenští bezpečnostní agenti.
My translation:
Irish police has arrested a Slovak citizen who unknowingly transported 90 grams of explosives into the Ireland, but released him shortly after. It showed up the explosives were given into the luggage by a Slovak security agents in an experiment which went awry.
The person was released shortly, there was no offence brought against him, but as the question is about arrest, it seems to qualify.
Together with DJClayworth's answer it seems that the risk of being planted a contraband from police / security personel might be comparable or higher to that from a smuggler.
This is explosives rather than contraband and assuming you take a court verdict as proof, then the Hindawi Affair is certainly one incident - in that case, a man planted explosives in his fiancee's luggage. Might not be exactly what you are looking for, since the planter was known to the victim.
In this story from Narita International Airport in Tokyo, drugs were planted and then removed by customs officials to check their sniffer dogs' effectiveness - it became a story when they missed removing one. It is another case that isn't quite what you are looking for, as the planting was for 'training purposes'.
Roger Levans of Queens, NY was arrested when two bricks of cocaine were found in his bag on a return trip from Guyana.
Levans said he was strip searched, and jailed until his family could put up $100,000 bail.
Three months later, the feds dismissed the charges.
“It was determined the luggage was broken into and drugs planted by a third party into his suitcase,” said Michael Borrelli, Levans’ attorney.
He filed a lawsuit as well Levans v. Delta Airlines.
A case has just been reported in the Guardian: Australian holiday winners duped into smuggling crystal meth
An Australian couple were unwittingly conned into becoming multi-million dollar drug mules after winning a dream trip to Canada with new luggage thrown in.
The elaborate con duped the couple by taking them to Canada as the winners of an all-expenses paid trip, which included accommodation and new suitcases.
But after a dream week in North America, the couple became suspicious about their bags on their return to Western Australia and reported themselves to customs.
There's a story of it happening here: 'Blind mules' unknowingly ferry drugs across the U.S.-Mexico border
The victim was arrested and convicted; and then the case was dismissed when a judge noticed the same thing happening elsewhere:
Senior U.S. District Judge David Briones, a 17-year judicial veteran, had noticed the pattern in the cases.
"I got information about [District Judge Philip R.] Martinez's trial this week with almost the exact same facts: Two bags in the trunk, each with about 50 pounds tied together, and the individual was again inspected at the [commuter] lane," Briones told Andres' attorneys and the prosecutors at the status hearing that afternoon in May.
"I, quite frankly, think that an injustice has been done," he said. The judge dismissed the case against Andres, and he was released that day.
In this case, though, the drugs were planted in the victim's car (not in their luggage).
