Police threat

Sir, During 2010-11, one person deposited some money in our bank account, he was known to me he has come in contact with me to sell our property in Mumbai. He deposited money in my mumbai account and my mothers kerala acccount. The money deposited is for his co brokers expenses. We had given him an authorization letter(on printed white paper) to find a suitable purchaser , to show the property (mumbai) and give us the periodical reports. Now he has filed a CMP in kerala u/s 420,406&34. He has lot of influence in police and asking them to arrest us. He has the record of trapping persons in police cases. he mortgaged his house thereafter he sold this property and after one and half year he purchased the same property and mortgaged in another bank.therafter he sold a portion of the said land.Now the police has filed FIR, we went to file anticipatory bail in session court. Can police arrest us before deciding anticipatory bail application? His aim is with the help of police, forcing us to sign the power of attorney and other documents.He says he has given us 14 lacs in cash and on our instruction he paid five lacs to other two persons to buy our property. Actually he paid these amounts to get forged documents to get bank loan . Now the police says other side is not interested in case and forcing us for settlement otherwise they will arrest us. our advocate says stay away from house otherwise poloce will arrest us. please help us