Arrested ... Terrence Reddy.

Arrested ... Terrence Reddy. Photo: Jon Reid

ONE of the last people to see Michael McGurk alive has been arrested for his alleged role in a large-scale mortgage fraud.

Terrence Reddy, 48, was charged with nine forgery offences linked to the creation of fraudulent finance applications. He was also charged with perverting the course of justice and hindering a police investigation.

Born in South Africa to Indian parents, the man nicknamed the Black Prince spent Wednesday night at one of his favourite haunts, the Ivy nightclub, in the city. Shortly before 11am yesterday, Mr Reddy was arrested for his part in a multi-million-dollar fraud. Detectives from the fraud squad will allege Mr Reddy was involved in the fraudulent financing of Harley-Davidson motorcycles, luxury cars, heavy earth moving equipment and real estate, totalling $3.9 million.

In March this year, Justice Michael Adams referred Mr Reddy's actions to police and the Director of Public Prosecutions after the court heard evidence that Mr Reddy and his business associate, the Hells Angels bike boss, Felix Lyle, were part of a syndicate involved in sophisticated mortgage frauds. In many instances fake title deeds were used to rip off banks.

The charge of perverting the course of justice relates to the evidence Mr Reddy is alleged to have given before Justice Adams.

On the afternoon of September 3, 2009, Mr McGurk and Mr Reddy, a close associate, had a business meeting at an upmarket hotel in the city. Only two hours later, McGurk lay dead outside his Cremorne house, having been fatally shot in the head. The property developer, Ron Medich, and four others have been charged over the murder. Mr McGurk had come to the notice of fraud squad investigators attached to Strike Force Apia, which was established in September 2007 to investigate incidents of alleged complex, large-scale mortgage fraud.

To date, 14 people have been arrested in relation to $15 million of fraudulent loans.

Police estimate that their investigations have saved financial institutions from being stung for a further $55 million. Police anticipate more arrests will follow. Mr Reddy, who was refused bail, appears in Central Local Court this morning.