Nationals MP Tim McCurdy is being investigated by police for alleged fraud after complaints that he forged documents to illegitimately profit from two land sales.
McCurdy, 54, lower house MP for Ovens Valley, is alleged to have falsified documents to secure sales commissions worth about $375,000 while working as a real estate agent in 2009.
The alleged offences were committed more than a year before he entered State Parliament in 2010 but have come back to haunt the MP some eight years later after police revived their investigation into the property deals.
The investigation into alleged criminal activity by an opposition MP is an awkward development for the Matthew Guy-led Coalition, which is campaigning aggressively on law and order.
Mr McCurdy is due to host a community forum on law and order in Wangaratta on July 31. There have been four shocking killings in the Wangaratta region in the past 20 months. Senior Liberal figures, shadow minister for community safety Edward O'Donohue and shadow attorney-general John Pesutto, are scheduled to speak at the forum.
Police confirmed to Fairfax Media that they interviewed Mr McCurdy regarding the alleged fraud several weeks ago and that the matter is still under investigation.
"Police executed two warrants in Cobram on 30 May," a Victoria Police spokeswoman said.
"The warrants relate to an investigation into an alleged fraud from 2009. A 54-year-old Cobram was also interviewed and was released pending further inquiries."
The investigation concerns Mr McCurdy's role in the sale of two farms in northern Victoria, Malmo and Pinegrove Park, to Chinese buyer Xing Long International.
Malmo was sold for $7.8 million with a $245,850 commission. Pinegrove Park was sold for $3.9 million with a $129,891 commission.
Mr McCurdy is alleged to have forged the letterhead of Cobram real estate agent Andrew Gilmour, without Mr Gilmour's knowledge, to obtain the commissions.
Mr McCurdy, who will fly to Papua New Guinea on Thursday with a number of his Nationals colleagues to walk the Kokoda Track, said he believed the matter had been resolved three years ago and did not know why police had reopened the investigation.
"In 2013 a complaint was lodged regarding a property sale that dated back to 2010," he said.
"After mediation in 2014, a confidential legal agreement was reached between my former employer and myself. As far as I was concerned, the matter was finalised."
Mr McCurdy said police contacted him two months ago "to say they had been told they needed to make further routine inquiries".
"Two officers visited my office and home that day, but took nothing. I have not heard anything further since," he said.
Mr McCurdy was an employee of real estate agency PGG Wrightson in 2009 when the company's Cobram branch was acquired by Andrew Gilmour, shortly before the two farms were sold.
Mr McCurdy was not employed by Mr Gilmour when he used his agency's letterhead to broker the two property sales.
PGG Wrightson, which later changed its name to PGW Agriservices, sued Mr McCurdy for $375,000 in 2014 and accused him of "engaging in misleading and deceptive conduct".
The lawsuit was confidentially settled out of court.
Gary Garvey, an internal investigator at PGW Agriservices, detected the alleged fraud and reported the matter to police.
Now based in New Zealand, Mr Garvey said he was interviewed by a Wangaratta detective last year.
"I believe there is clear evidence that documents were forged," Mr Garvey said on Wednesday.
Victorian Nationals leader Peter Walsh said he was unaware police had reopened the investigation until contacted by Fairfax Media.
"I was aware the issue was investigated four or five years ago and there was no action taken. I believed that the issue had been concluded," Mr Walsh said.
The alleged fraud by Mr McCurdy was previously referred to Consumer Affairs Victoria in 2014, however the authority declined to investigate because more than three years had elapsed between the events and the complaint.
The Estate Agents Act states that any complaint must be referred to Consumer Affairs Victoria within three years of the incident.
Mr Walsh said the Nationals would support Mr McCurdy during the investigation.
"In any investigation there is a presumption of innocence and that is how I believe it should be approached," he said.
Mr McCurdy is shadow minister for veterans, for sport and for gaming and liquor regulation.
He was elected member for the very safe Nationals seat of Murray Valley in 2010 and served as an MP in the Baillieu/Napthine governments.
The Wangaratta-based seat was renamed Ovens Valley in 2014 following a redistribution and Mr McCurdy was comfortably re-elected.