Former Auburn deputy mayor Salim Mehajer has spent the night in custody over charges relating to what police allege was a staged car crash.

Key points: Salim Mehajer will find out on Tuesday whether he is granted bail

Salim Mehajer will find out on Tuesday whether he is granted bail He has been charged with perverting the course of justice and conspiracy to defraud

He has been charged with perverting the course of justice and conspiracy to defraud Police allege he staged a car crash to avoid court

The 31-year-old was arrested at his new home in Vaucluse on Tuesday morning and was charged with perverting the course of justice and conspiracy to defraud, after a police investigation into a car crash in October last year.

A magistrate deferred the decision on granting bail after a marathon hearing at Waverley local court.

Mr Mehajer was on his way to court at the time of the crash last year to face charges over the alleged assault of a taxi driver.

The October 16 car crash took place at the intersection of Nicholas and Delhi Streets, Lidcombe, between Mr Mehajer's Mercedes AMG and a Mitsubishi Outlander.

Police allege the crash was staged to prevent Mr Mehajer from attending the first day of his trial and to commit insurance fraud.

After the collision, Mr Mehajer was treated by paramedics in full view of television cameras and was taken by ambulance to Westmead Hospital.

Salim Mehajer became famous after an elaborate and public wedding in 2015. ( AAP: Dan Himbrechts )

When asked if it was an extreme method for a person to use to avoid court, Detective Superintendent Philip Rogerson said: "It is … but the evidence we've gleaned is … sufficient to put before the court."

"It's not acceptable to the police, and in particular, the emergency services that freed them on that particular day, out of that car, and obviously, the insurance companies and people like yourselves who have to pay your premiums."

Five others were also arrested over the incident on Tuesday, including Mr Mehajer's business associate, 28-year-old Ahmed Jaghbir.

Police will allege in court the group conspired before and after the incident and provided fraudulent versions of events to investigators and insurance companies.

Lawyer for the accused, Tom Hughes, argued the crown had a "weak and circumstantial case" and claimed his client was the victim of an extortion attempt after police revealed they had intercepted texts between Mr Mehajer and Mr Jaghbir, who was not in the car at the time of the crash.

Police contended the text messages, which included a request from Mr Mehajer to borrow a car for the trial and another which contained Mr Jaghbir's bank account details, were evidence of collusion.

Mejaher needs bail to manage other legal matters: defence

Salim Mehajer (L) was arrested this morning in Vaucluse. ( Supplied: NSW Police Force )

Mr Hughes told the court his client was not a flight risk and he should be granted bail to better manage his other matters before court.

"He's not just waiting for one trial to commence — he has a series of matters," he said.

Mr Hughes said while that may cast his client in a negative light, it has a positive to it because Mr Mehajer is familiar with court processes and has never breached bail.

"It's a double edged sword or a cloud with a silver lining.

"He's got strict conditions and he's on a very tight leash."

Prosecutor Sergeant Tom Sands opposed bail, and told the magistrate the fact Mr Mehajer has so many court cases at the moment is the reason he should be in custody, not an argument to let him walk free.

"He's currently on four sets of bail for separate offences," he said.

"His offences are escalating in seriousness and he has a conviction of dishonesty."

The matter will return to court on Wednesday morning.

More charges likely

Mr Jaghbir has been charged with the same offences as Mr Mehajer, and was refused bail to appear at Bankstown Local Court on Tuesday.

A married couple have been charged with conspiracy to cheat and defraud in relation to an insurance claim for the crash.

The 31-year-old woman was the driver of the Mitsubishi involved in the crash with Mehajer's Mercedes.

The woman was driving with a female friend in the passenger seat.

A 28-year-old Lidcombe man and a 30-year-old Lidcombe woman have also been arrested at Auburn Police Station.

They are also expected to be charged with conspiracy to cheat and defraud.