Former federal MP Craig Thomson is facing a longer stint behind bars if he fails to overturn his conviction for blowing union funds on personal expenses including trips to brothels, a judge has warned.
Thomson is appealing his conviction and 12 month jail term, with nine months suspended, for misusing $24,538 while national secretary of the Health Services Union.
Victorian County Court Judge Carolyn Douglas on Monday said she had the power to re-sentence Thomson to a more significant prison term.
Prosecutor Lesley Taylor SC told the hearing that Thomson spent the HSU's money, which came exclusively from membership fees, like it was his own.
"On the evidence there is absolutely no doubt Mr Thomson was not authorised to treat the funds of the Health Services Union as his own," she said.
"They were at all times union funds and as such they were to be expended for the benefit of the members of the union and the objectives of the union and nothing else."
Among Thomson's illegal spending spree were trips to brothels and evenings with escorts, Ms Taylor said.
She said he would then create a false entry into the HSU accounts to account for the expenditure.
On one occasion, Thomson paid around $800 to an escort named Misty to visit his hotel and later described it as "meeting national office" in the HSU database, Ms Taylor said.
She told the court Thomson's use of HSU funds on personal expenses breached the union's code of conduct, which was formalised at his behest.
"It is utterly inconceivable that as national secretary and a member of the national executive and council that he would've been ignorant," she said.
But Thomson's barrister Greg James QC said his client was not guilty of theft or obtaining a financial advantage by deception as alleged by the prosecution.
He said any cash withdrawn from the bank belonged to the bank and not the union at the time Thomson withdrew it.
That debt with the bank would then be settled by the HSU at a later date, he said.
"It's charged as cash of the HSU, and it isn't," Mr James said.
Magistrate Charles Rozencwajg in March found Thomson guilty of 65 dishonesty charges over the misuse of the HSU funds between 2002 and 2007.
Judge Douglas said she was treating the matter as a fresh hearing of the allegations.
The former federal member for Dobell has pleaded not guilty to the charges.
The hearing continues on Tuesday.
