Cagliari President Massimo Cellino has been arrested as part of an investigation into the Is Arenas stadium where the Serie A club has been staging their home matches this season, the ANSA news agency said Thursday.
Mauro Contini the mayor of Quartu Sant'Elena, the Cagliari district where the stadium is located, was also arrested along with another local official by the Forestry corps, an agency of the Italian police, the source said.
They were charged with embezzelement and false representation in the rebuilding of the stadium.
The sports daily Gazzetta dello Sport showed a photograph of Cellino standing in front of a blue gate which it said was the Buoncammino prison in Cagliari.
Cagliari moved to the small Is Arenas stadium, which had previously hosted third tier matches in the 1980s, at the start of this season but, with only one permanent stand, they have had trouble from the outset.
Three temporary stands were built on the other sides of the pitch but their opening match against Atalanta was staged behind closed doors after local authorities ruled that it was not ready.
Their following match against AS Roma was cancelled by the Cagliari city government after the club defied its orders to play without supporters.
On that occasion, Cellino told supporters the ground was safe, invited them to turn up for the match and slammed the city government for placing bureaucratic obstacles in the club's way. Roma were awarded a 3-0 win.
Cagliari were also banned from hosting a match against Juventus in the stadium and had to switch that fixture to Parma.
Last Sunday's game against Milan was initially set to be moved to Turin amid security worries but eventually went ahead at the stadium after a regional tribunal ruled it was safe.
Cagliari had played at the Stade Sant'Elia from 1970 until around halfway through last season but abandoned the arena due to disagreements with the local authorities and over growing safety worries.
They played their remaining matches in Trieste, near the border with Slovenia and nearly 1,000 kms.