Darryl Kelvin Stretton, 42, of Croobyar Road, Milton, was extradited after appearing in Nowra Local Court yesterday.

The court was told Stretton had befriended a Perth businessman in 2007 and they spent time together looking at investment opportunities, but that turned sour during a meeting in October last year.

The alleged victim turned up at the meeting in suburban Perth to be confronted by Stretton and a heavily tattooed man identified only as Ox, who was holding a baseball bat and hitting it into his hand while asking where the money was, according to documents presented to the court.

During the ensuing conversation Stretton allegedly told the man he was involved in the underworld, and his associates had invested $150,000 in mining shares that had since dropped in value.

They blamed the man for the loss, even though information presented to the court stated he had never recommended investing in the mining shares.

Stretton and Ox demanded the man pay $20,000 that day, with another $90,000 each of the following two weeks.

Bolt cutters would be used to cut off one of the man's fingers for each week a payment was late, the court was told.

The man responded by having his bank draw up a cheque for $200,000 to Stretton's brother.

Then in October this year the man was confronted by one of Stretton's associates, the court was told.

During a meeting with Stretton the man was told he would be killed by members of a bikie gang, unless he paid $500,000, according to papers presented to the court.

Stretton even pointed to a man standing outside the cafe{aac}, describing him as "a murderer and a psycho" who would carry out the killing.

The latest demand resulted in the man contacting police, and Stretton being arrested at a Batemans Bay motel on Sunday.

He was extradited to appear in Perth Magistrates Court on Friday, charged with two counts of demanding money with threats.