Investigators are hoping that Heftsiba CEO Boaz Yona, nabbed Thursday night in Italy, will not resist extradition and will be returned to Israel in the coming weeks.
Yona's remand was extended on Friday by 10 days, and when he is brought back to court in Milan he will have to decide if he plans to oppose return to Israel.
On the run in Europe since the collapse of major housing company Heftsiba Construction, Yona was caught Thursday night following a monthlong international manhunt that took police to Romania and Italy.
Police officials in Milan said the suspect was arrested in a hotel in Castelnuovo del Garda, a lakeside town near Verona, northern Italy.
Israel Police spokesman Micky Rosenfeld said Yona went to Italy after staying briefly in Romania, and would likely be brought to Israel within several days. The arrest, he said, was the result of cooperation between Israeli police, Italian authorities and Interpol.
Yona is believed to have fled to escape revenge from criminals with whom he had conducted business.
Channel 2 reported Friday night that Yona left Israel with upward of $95 million unaccounted for.
Police found him by tracking his wife's cellphone after she gave interviews to Israeli media outlets, police officials said.
Israeli police then tracked him down in Italy, and when they confirmed that it was him they called their Italian counterparts, who conducted extensive surveillance and then made the arrest.
In her earlier interviews, Yona's wife, Tamar, said she did not know her husband's whereabouts and feared he would take his own life. She was found with him when he was arrested.
She and the couple's children have since been released.
Representatives of the Israel Police's National Fraud Squad were in Italy, working in cooperation with Italian security forces. The Israel Police's Turkey representative was also present.
The CEO is alleged to have embezzled money paid by dozens of buyers of apartments built by Heftsiba, and depositing it in private accounts owned by himself and others in the company.
Several members of Heftsiba's top management are also suspected of making false statements in the company's corporate register.