Police have raided the Bateau Bay home of embattled Federal MP Craig Thomson.
Just after 7am the NSW police executed a search warrant at the central coast home of Mr Thomson and his wife, Zoe.
Mr Thomson later emerged to tell reporters he had fully co-operated with police and was "very confident that at the end of this investigation I will be vindicated".
NSW police obtained the warrant on behalf of the Victorian police, who are investigating allegations that Mr Thomson improperly used Health Services Union funds to spend on prostitutes, air travel, entertainment and cash withdrawals in excess of $100,000.
Shortly after 10am about eight officers walked out of Mr Thomson's house with a five large sealed boxes of material.
Police are now executing a search warrant on Mr Thomson's electoral office in nearby Tuggerah.
Detective Sergeant John Tyquin from the Victorian police fraud and extortion squad was one of half a dozen officers who searched Mr Thomson's house.
Mr Thomson said he had done ''nothing wrong" and that today's raid was merely part of a broader investigation into the union's national office. He said he had volunteered documents to the police and that they were professional and courteous as they went about executing the search warrant.
Mr Thomson's lawyer, Chris McArdle, said: "It's very distressing that every journalist in the country knew about this but my client didn't."
In May this year, Mr Thomson declined a request from Victorian police to nominate the people he claimed had tried to frame him by setting him up with prostitutes.
Last week Fair Work Australia announced it had launched a civil prosecution of Mr Thomson in relation to the misuse of union funds.
FWA's statement of claim alleges 25 breaches of union rules, which carry no penalty, and 37 further breaches which are punishable by fines of up to $6600 each.
FWA is also seeking to pursue Mr Thomson for more than $200,000 of union funds which it is claimed he spent getting himself elected to the seat of Dobell, on prostitutes, cash advances and air travel for his former wife.
Mr Thomson was national secretary of the HSU from 2002 until 2007 when he was elected to Parliament. Earlier this year he was suspended from the ALP.
Mr Thomson has denied any wrongdoing.
From Adelaide, Opposition Leader Tony Abbott said that it was "very important" that Mr Thomson fully co-operated with the police.
Mr Abbott said the police had shown a lot of diligence in pursuing the matter.
"I just wish the same diligence had been shown by the federal government," he said. ''Lets not forget it was the Prime Minister who was saying for months and years that she had full confidence in Craig Thomson."
Labor senator Chris Evans told Sky News that things had to "run their course".
"Obviously these are matters of huge public controversy," he said.
Coalition workplace relations spokesman Eric Abetz said the raid was a "significant development in this ongoing saga".
"It is now clear that despite Mr Thomson's repeated claims to the contrary, he is a person of interest in both the Victorian and New South Wales Police Fraud Squad investigations," Senator Abetz said in a statement.