Police have charged Sebastian 'Seb' Monsour, the brother-in-law of former Queensland premier Campbell Newman, as part of a long-running investigation into a $5 million investment fraud.

Police raided his business in Spring Hill earlier today and arrested him at the Brisbane City watch house.

He is being held in custody overnight and is due to appear in the Brisbane Magistrate's Court tomorrow, charged with fraud.

The 44-year-old is the chief executive of real estate development company Majella Group.

It is alleged he accepted three significant payments from Fusheng Li, a Chinese entrepreneur, who sought to invest the money under a visa program for wealthy migrants.

Police alleged Mr Li was told his money would go into property and business funds, but these did not exist at the time.

Instead, Mr Monsour allegedly channelled themoney into other investments, including a US ski resort and an inner-Brisbane hotel redevelopment, as well as Majella Group expenses, such as debts and wages.

It also alleged he had no authority, appropriate licence or credentials to manage investments.

Mr Newman told the ABC he had never had a business relationship with Mr Monsour.

"He [Mr Mansour] is entitled to his day in court, but if he has done something wrong I urge him to search his conscience and face up fully to his responsibilities," Mr Newman said.

Mr Monsour is the brother of Campbell Newman's wife Lisa. ( ABC: Tim Leslie )

Detective Senior Constable Douglas Henderson said the money allegedly went into business accounts instead of the promised investments.

"So we're still confirming the exact details of where the money's gone, but