LOS ANGELES (Reuters) - Stevie Wonder's nephew has been arrested and charged with an extortion scheme against the singer, Los Angeles prosecutors said on Friday.

Alpha Lorenzo Walker, 38, was arrested on May 2, along with another alleged conspirator, Tamara Eileen Diaz. The pair had threatened to reveal information they claimed would be embarrassing to the "Superstition" singer unless he met their demands, the Los Angeles District Attorney's office said.

Celebrity website TMZ.com, citing law enforcement sources, said the pair demanded $5 million from Wonder and threatened to go to the media with a tale of incest. They later lowered the sum to $10,000 and were arrested by undercover police posing as representatives of the musician.

The District Attorney's spokeswoman declined to comment on the nature or details of the alleged extortion plot.

Walker and Diaz have pleaded not guilty to extortion but are being held in jail awaiting a preliminary hearing next week that will determine whether there is enough evidence for a full trial.

(Reporting By Jill Serjeant; Editing by Bob Tourtellotte)