Former Brazilian Aquatic Sports Confederation (CBDA) President Coaracy Nunes has been arrested as part of an inquiry into the alleged misuse of public funds.
The 78-year-old had already been removed from his post at the head of the governing body in October following an investigation by the Federal Police and Public Ministry.
Nunes, however, remains on the International Swimming Federation (FINA) ruling Bureau.
According to ESPN Brazil, Nunes was arrested along with CBDA financial director Sergio Ribeiro and water polo technical coordinator Ricardo Cabral.
Each are accused of “over-billing, diverting public funds and embezzlement”.
The arrests specifically relate to the alleged misuse of around BRL$40 million (Â£10 million/$12 million/â‚¬11.6 million).
According to UOL Esporte a kit contract with a company called Pro Swim is also being examined.
It is alleged equipment, including backpacks and medicine balls, were purchased through the contract at up to three times higher than the market price.
Lawyer Gustavo Licks has been appointed interim head of the CBDA until the investigation is resolved.
Read Inside the Games