Federal independent MP Craig Thomson is vowing to "vigorously defend" himself against 150 fraud charges after being arrested on the New South Wales Central Coast today.
NSW police executed an arrest warrant at the request of Victorian police as part of their investigation into the Health Services Union (HSU).
"He was taken to the Wyong Police Station where he has been charged by virtue of one arrest warrant that was issued in Victoria," Detective Superintendent Col Dyson told reporters outside the station.
"I understand that he's also been served with papers in respect of 149 further fraud-related charges."
Mr Thomson appeared in Wyong Local Court this afternoon where he was granted bail to appear in the Melbourne Magistrates Court next week.
One of the bail conditions is that he not contact any person he is alleged to have engaged for sexual services.
He must also notify authorities 24 hours before travelling overseas or interstate, except in the course of his duties as a federal MP.
Speaking briefly to reporters outside court, Mr Thomson said: "Every fibre of my being is screaming out to say how wrong this is.
"I'll be going to Melbourne next week. I'll be vigorously defending these charges.
"As I have said from the start, I have done no wrongdoing and that's what will be found in these matters."
Det Supt Dyson earlier claimed that Mr Thomson had been invited to voluntarily travel to Victoria prior to Christmas to "surrender himself".
"He didn't do that - he refused - and the result was the issue of that warrant," he said.
But Mr Thomson's lawyer, Chris McArdle, says that is not true.
"We were invited on December 21 to go to Victoria to be interviewed by the police. It is untrue to say that we were invited to go and surrender our client for arrest."
Mr McArdle says his client contacted him just after 1pm (AEDT) in a "distressed state" to inform him that he was being arrested and charged.
He says Mr Thomson will plead not guilty when given the opportunity.
"He isn't guilty, so it's a pretty good clue that he's going to plead not guilty," he told ABC News Online.
HSU national president Chris Brown says the union will try to recover money from Mr Thomson if he is found guilty of fraud, but warns the court processes will take a while to run.
"This is obviously going to drag on for some time," Mr Brown told reporters in Melbourne.
"Obviously the matter will go to trial and those processes aren't quick processes. I'm not expecting that to be finalised before the end of this year.
"I think the fact that people are being brought before the courts is evidence that this is coming to an end."
The HSU's former national president, Michael Williamson, was last year charged with 48 offences relating to allegations he misused more than $500,000 during his time at the union.
Det Supt Dyson says Mr Thomson remains a "person of interest" in the New South Wales Police investigation into the HSU.
He is also facing civil charges in the Federal Court relating to allegations he used HSU funds on prostitutes and lavish hospitality.
He strenuously denies the allegations.
Asked whether today's charges related to his client's alleged use of escorts, Mr McArdle replied: "Some people should get off and develop their own sex life."
"That allegation in the Fair Work matter is $7,000 - false as it is - out of a case that's $300,000.
"There's something very sad about the fourth estate in Australia that they are absolutely beside themselves with fascination about that particular false charge."
Television crews and journalists were at Mr Thomson's office as he was led away by police, prompting a furious response from his lawyer.
"We repeat our outrage that this has turned into some sort of reality TV show for the benefit of Channel Seven," Mr McArdle said.
"It's absolutely disgusting. This is not reality television - this is someone's life."
News of Mr Thomson's arrest came through as Opposition Leader Tony Abbott was addressing the National Press Club in Canberra.
"We have certainly respected, or tried to respect, the rule that you do not comment on the specifics of cases which are currently before the courts," Mr Abbott said.
"And we will respect that rule.
"But the Thomson matter isn't just about what Craig Thomson may or may not have done, what he did or didn't do.
"It's always been about the judgement of the Prime Minister... who was running a protection racket for Craig Thomson for months and years."
Prime Minister Julia Gillard today and says she only knows about the arrest through the media.
"I've been focused here on what's happening in these communities, and I've just been quickly told about things that are in the media and I don't know anything more about it than that," she told reporters.
Mr Thomson's membership of the Labor Party was suspended last April following a request from Ms Gillard.