UPDATE: 4.30pm: Opposition Leader Tony Abbott says the Coalition will continue to ask questions about Prime Minister Julia Gillard's judgment after former Labor backbencher Craig Thomson was arrested and charged with 150 fraud charges on Thursday.
NSW detectives, acting on an arrest warrant issued in Victoria, swooped on the Member for Dobell's Central Coast electorate office at 1pm.
He was arrested and later charged with 150 fraud offences and will appear in a Victorian court early next week.
Outside Wyong Court House, Mr Thomson, who was released on bail, said he had been advised not to make a comment even though "every fibre of my being is screaming out to say how wrong this is".
He said he would "vigorously defend" the charges in Melbourne next week.
The charges relate to Mr Thomson's time as national secretary of the Health Services from 2002-2007.
Mr Thomson has consistently denied misusing union members' funds , with his lawyer Chris McArdle confirming his client would plead not guilty to all charges.
But Mr Abbott said the latest development would not stop the opposition attacking Ms Gillard over the matter.
"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 and we will respect that rule," Mr Abbott said during the question-and-answer session of his National Press Club address.
"But the Thomson matter isn't just about what Craig Thomson may or may not have done ... it's always been about the judgment of the Prime Minister, ... who was running a protection racket for Craig Thomson for months and years long after it was obvious that there were issues is something, that remains very much in question.
"You certainly can't expect that there won't be questions raised about prime ministerial judgment by the Coalition."
Mr Thomson, during an almost hour-long address to the Parliament in May last year, accused Mr Abbott of "unleashing the lynch mob" in relation to the allegations.
Just days earlier Mr Thomson had quit the Labor Party as media speculation intensified.
An angry Mr McArdle described Mr Thomson's treatment as a "nightmare", not just for his client but for "anyone who believes in the rule of law".
Mr McArdle claimed the media, not for the first time, had been tipped off about the arrest.
He was also furious five police officers - three from NSW and two from Victoria - were sent to arrest Mr Thomson.
He said his client continued to maintain his innocence.
"Any money he spent in the service of the union he did so lawfully and in accordance with the rules of the union," Mr McArdle said on Sky News.
"That's what he's said all along and that's true."
Mr McArdle said his client was "distressed" by the latest developments.
"He's been falsely charged with 150 criminal offences. You don't actually shrug your shoulders at that."
Ms Gillard, who was visiting flood-ravaged Bundaberg, would not been drawn on the matter.
She said she was given no prior warning of the arrest.
With the matter expected to take some time to resolve through the courts, Mr Thomson's place in the Parliament is safe.
Under the Constitution an MP cannot hold their seat in the House of Representatives if he or she has "been convicted and is under sentence, or subject to be sentenced, for any offence punishable under the law of the Commonwealth or of a State by imprisonment for one year or longer".
Fair Work Australia is also pursuing Mr Thomson through the Federal Court, with a directions hearing set down for Friday morning in Melbourne.
FWA alleges Mr Thomson used union credit cards to spend money on personal expenses, including prostitutes.
EARLIER: Former Labor MP Craig Thomson is expected to be charged with 149 fraud offences after he was arrested at his Tuggerah electorate office on Thursday.
New South Wales detectives attached to Strike Force Carnarvon arrested Mr Thomson, who is wanted in Victoria on fraud offences, at 1pm.
He was taken to Wyong Police Station where he was expected to be charged him with a fraud offence by virtue of an arrest warrant issued in Victoria.
It was expected he would then appear before Wyong Local Court where a further 149 fraud charges will be laid, NSW police said in a statement.
Victorian detectives are likely to apply for Mr Thomson's extradition to Victoria.
The alleged offences relate to Mr Thomson's time as national secretary of the Health Services Union between 2002 and 2007.
The Member for Dobell, who has consistently denied any wrongdoing, quit the Labor Party in May last year over the scandal.
Prime Minister Julia Gillard told reporters in Bundaberg, where she is inspecting flood damage, she did not know any details surrounding the arrest apart from what she had seen in the media.
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