Former junior government minister Ivor Callely has been released from custody after questioning by fraud squad detectives.
A garda spokesman said a report would be sent to the Director of Public Prosecutions.
The ex-Fianna Fail TD was detained at Irishtown Garda Station, where he was quizzed about his mobile phone expenses in the Seanad.
Outside, solicitor Noel O'Hanrahan read a short statement: "Mr Callely has been detained under section four of the Criminal Justice Act, which gives the Garda Siochana the power to investigate complaints.
"Mr Callely has now been released. Mr Callely is completely and totally innocent of any wrongdoing."
Mr Callely, who resigned from politics over a previous expenses scandal, was arrested at his home on St Lawrence's Road, Clontarf, north Dublin, at lunchtime on Wednesday. The Edwardian terrace house was searched by detectives.
The former politician was accused of falsely claiming around 3,000 euro for mobile expenses while a senator between 2002 and 2006 for a company that had gone out of business in the 1990s.
It is believed he supplied invoices from the company - Business Communications - even though it was not trading. At the time, Mr Callely claimed he had submitted the invoices in good faith and was not aware the company was defunct.
Mr Callely was first embroiled in an expenses scandal two years ago after claiming 81,000 euro of allowances for a holiday home in Kilcrohane, west Cork. He was based in Clontarf and a parliamentary investigation found he had deliberately misrepresented his normal place of residence over a three-year period.
Mr Callely was handed a 20-day suspension from the Seanad, but the High Court subsequently overturned the order, ruling that he had not been given a chance to defend himself.