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Australian lawyer arrested in PNG

An Australian lawyer has been arrested in PNG over community funds paid by Ok Tedi mine operators. (AAP)

Australian lawyer Greg Sheppard has been arrested in Papua New Guinea and charged with two counts of conspiracy to defraud and two counts of false pretences related to withdrawals from a community trust fund.

The former Queensland crown prosecutor, who has worked in PNG for years, was detained by police investigators on Wednesday at a Port Moresby restaurant and charged after questioning, PNG's The Post-Courier reports.

He was released on 3000 kina ($A1070) bail.

It's understood the charges relate to more than $A90 million allegedly withdrawn illegally from the Western Province People's Dividends Trust Account, a development fund set up to aid communities affected by the Ok Tedi copper and gold mine.

The funds allegedly went to Sheppard's law firm, Young and Williams Lawyers, and its client Ok Tedi Fly River Development Foundation in breach of the trust fund's rules.

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