Montreal's mayor resigned on Tuesday, a day after his arrest on 14 fraud charges.
As he did so, Michael Applebaum told reporters that the charges against him were "unfounded".
Mr Applebaum was arrested early on Monday. The charges against him include defrauding government, breach of trust and conspiracy.
He replaced Gerard Tremblay, who quit in November amid accusations related to illegal donations.
"Being mayor of Montreal is not something one can do while defending themselves against these accusations," Mr Applebaum said.
"This is why I am resigning as mayor of Montreal. It is a responsible thing to do.I have never taken a penny from anyone."