The Chief Constable of Cleveland and his deputy have been arrested by detectives investigating allegations of misconduct, abuse of position and corrupt practice.
Sean Price and deputy Derek Bonnard are being questioned at a police station in North Yorkshire. A woman was also arrested.
The inquiry is being conducted by Warwickshire Police Chief Constable Keith Bristow. He is being assisted by senior detectives from North Yorkshire Police.
In May, the Warwickshire force was brought in to oversee a wide-ranging corruption investigation after allegations were made against present and former members of Cleveland Police Authority.
A statement from Warwickshire Police said: “Police officers conducting a criminal investigation into a number of people with current or past associations with Cleveland Police Authority and the manner in which the authority may have conducted some of its business have arrested three people on suspicion of misconduct in a public office, fraud by abuse of position and corrupt practice.
“Two men and a woman were arrested and have been taken to a police station in North Yorkshire where they will be interviewed.
“A number of premises are being searched in connection with these arrests.”
A spokesman for the Independent Police Complaints Commission said the IPCC is not involved in the investigation but has been informed of the arrests.
The Home Office has also been informed of the arrests. A spokesman said a statement will be made later on Wednesday (3/8/2011).