LATEST: Police have taken samples of Craig Thomson's handwriting, which his lawyer says will prove he did not use Health Services Union (HSU) funds to pay for prostitutes.
NSW detectives raided the embattled federal MP's home in Bateau Bay, on the state's central coast, about 7am (local time) on Wednesday.
They've also executed a search warrant at his nearby electorate office.
Victoria Police are reportedly in the final stages of their investigation into Mr Thomson, who is being investigated for allegedly improperly spending HSU funds on prostitutes, air travel, entertainment and cash withdrawals in excess of AUS$100,000 ($126, 825).
Victorian Police would not comment on Wednesday's operation, but Mr Thomson's lawyer Chris McArdle said his client has done nothing wrong.
Mr McArdle said police took samples of his handwriting and at least one computer from Mr Thomson's home.
"The samples of handwriting will prove that he did not sign these infamous dockets, these credit card receipts at houses of ill repute," he told AAP.
Mr McArdle also said the media had been contacted in advance of the raid but Mr Thomson was surprised when police knocked on his door.
"He's very upset and his wife and family are very distressed and his staff are anxious," he said.
Whatever actions police and other authorities took, his client would be vindicated, Mr McArdle said.
"He will not be charged," he said.
"If he is arrested, he shouldn't be, and he would be acquitted without delay."
"But as far as the matters already before the Federal Court, he'll win."
In a civil case in the Federal Court, Fair Work Australia (FWA) is accusing Mr Thomson of 37 breaches of workplace laws and 25 breaches of HSU rules when he was national secretary between 2002 and 2007.
Mr Thomson would launch civil suits in response to the actions already taken against him, Mr McArdle said.
"The day will come," Mr McArdle said.
"It will be our timetable and we're going to do it methodically, but we are coming.
"You cannot get away with this sort of behaviour against another human being."