The Tax Authority's representative to the United States was arrested Monday evening at Ben Gurion International Airport, as the investigation into the authority's corruption scandal continued.

The representative, Yigal Sa'ar, was arrested upon landing in Israel from the United States. Police suspect that two businessman, Kobi Ben Gur and Yoram Karshi, had a hand in Sa'ar's appointment due to connections they had cultivated with the heads of the authority.

According to police, it is not clear whether Sa'ar was asked to exchange something in return for his appointment. He will be questioned by the National Fraud Investigation Unit in Bat Yam on Monday, and police believe he will be brought for an extension of his remand at the Tel Aviv Magistrate's Court on Tuesday.

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The police fraud unit on Monday called in two state officials to testify on the sequence of events that led to the alleged scandal.

Senior prime minister aide Oved Yehezkel was asked to testify on the conduct of Shula Zaken, the prime minister's bureau chief, in the office, as well as on the proceedings that led to her appointment.

The sister of the Tax Authority's director general, Edna Alfasi, who also serves as vice president of human resources in the state service, was asked to testify on the proceedings which led to her brother's appointment.

Meanwhile, police are to investigate fresh suspicions of obstruction of justice against Tax Authority Director Jacky Matza, after he sent a letter Sunday to Finance Minister Avraham Hirschson, in which he denied corruption allegations and disclosed details of the investigation into his activities.

Matza was released to 16-day house arrest Monday.

In the letter, which was widely published in the national press, Matza said that he "was amazed to hear the allegations that outsiders have leveled against me."

He said that his appointment to the post of Tax Authority chief was finalized after Attorney General Menachem Mazuz disqualified all candidates for the position who did not come from within the Authority.

Suspects undergoing police investigation are forbidden to discuss the details with anyone other than their attorney. The release of the letter, therefore, constitutes a failure on the part of the authorities overseeing Matza's arrest and investigation.

According to legal sources interviewed by Haaretz, the contents and dispatch of the letter are surprising, and it is likely that authorities will move to take punitive actions against Matza for sending it.

In the letter, Matza maintains that he received widespread recommendations for his appointment, including from his predecessor, Eitan Rub, as well as from a number of other former high-ranking tax officials.

He states that all appointments he made while serving as head of the Tax Authority were based on merit, and only after much consideration of the candidates' qualifications. Matza also expresses his support for Hirschson's decision to appoint Yossi Bachar as interim head of the Tax Authority, adding that he hopes the Authority will soon return to normal.

He also pledged to focus on the fight to clear his name and prove his innocence.

Matza was slated for release Sunday, but agreed to another day of detention in a deal made between his attorney and the police, in which he agreed to 16 days of house arrest and a restraining order barring him from setting foot on Tax Authority property for another 30 days.

The police Sunday held a confrontation between Matza and Shula Zaken, Prime Minister Ehud Olmert's bureau chief, in order to examine contradictions in their accounts of conversations between them.