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The man whose evidence led to the jailing of a police chief has been arrested on suspicion of fraud days before the crown will try to convince judges that he is still a reliable witness, the Guardian has learned.

Waad al-Baghdadi's evidence was instrumental in convicting the former Scotland Yard commander Ali Dizaei, who was jailed for trying to frame him after a clash outside a restaurant. On Tuesday the court of appeal will begin hearing Dizaei's appeal against his conviction, which will focus on Baghdadi's reliability.

The Guardian has learned that Baghdadi was arrested in London on 6 March over allegations of fraud. He was released on police bail until May and has not been charged. It is understood the allegations concern fraud running into thousands of pounds, which Baghdadi denies.

Baghdadi, the Guardian has learned, gave allegedly incorrect details about himself when he testified under oath before the jury hearing the case against Dizaei in February last year. It is alleged that Baghdadi:

• Did not use his real name in court, which is Maleki, or give his real age.

• Wrongly said he was born and lived in Iraq when he was born in Iran. This was one of the few questions the trial judge asked him directly.

• Said his parents were Iraqi and not Iranian as he told officials.

• Failed to tell investigators when he really entered the UK and the circumstances.

Dizaei's supporters say these statements show Baghd... >>>