The Best in Show actor was caught touching his genitals by police in the Tiki adult movie theatre on Wednesday (July 18) during a routine check, reports TMZ.
Willard was apparently transferred to a local precinct, booked for lewd conduct and released shortly afterwards.
His spokesperson has not issued any comment on the matter.
Willard is perhaps best known for his work in the Christopher Guest mockumentaries Waiting for Guffman, Best in Show and A Mighty Wind.
He got his first mainstream success in the popular 1970s series Fernwood 2 Night and has also appeared in Roxanne, Austin Powers: The Spy Who Shagged Me and Anchorman.