The principal of Papua New Guinea's largest law firm has been charged with 18 counts of allegedly receiving $AU30 million in fraudulent payments by the PNG government.
Lawyer Paul Paraka was arrested in the early hours of Wednesday morning and taken to the fraud squad office in Port Moresby.
He has been charged with five counts of conspiracy to defraud the state, nine counts of stealing by false pretence, two counts of money laundering and two counts of misappropriation.
Mr Paraka appeared briefly for his first mention on Thursday morning, with the matter adjourned to December 13.
The anti-corruption Investigation Task Force Sweep alleges the law firm Paraka Lawyers submitted fraudulent bills for legal work performed for the state, then received payments from PNG's finance department.
The taskforce's chairman, Sam Koim, says the investigation has uncovered a racket involving lawyers, government ministers, judicial officials and financial institutions.
In an interview with Radio Australia the PNG finance minister, James Marape, says the office of the attorney-general did not give any legal clearance, nor does there exist an agreement or arrangement of any kind with the law firm in relation to the payments.
The Investigation Task Force Sweep team also says he did not have any retainer agreement with the state to render legal services for which he could be paid.
Mr Paraka told reporters on Wednesday he will fight any charges in court, and that he was simply being paid for government work.
"What we allege since May is this political stupidity upon the floor of parliament," he said.
Opposition leader Beldan Namah tabled in parliament a letter allegedly signed by Prime Minister Peter O'Neill authorising payments to Mr Paraka.
Mr Namah says there is no agreement from the Office of the Attorney-General which gives legal advice to the government on any government contract or legal matter, a charge Mr Paraka denied.
"The payments that have been received are for work that we have done," he said.
"This the biggest law firm in the country, hundreds of lawyers sit up in their offices right through the nation and do a lot of work and clock in-time, so when you have so much manpower doing the work then obviously you make more money than a one man law firm."
Prime Minister O'Neill claims any signature on paperwork tabled by Mr Namah is a forgery.
He told the media this week that the government will not stop, suppress or intimidate the work of Task Force Sweep and the police.
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