Family members pressured the younger brother of former Kings Cross nightclub owner John Ibrahim to lend them money, including hundreds of thousands allegedly used in a trafficking scheme, a court has been told.
Fadi Ibrahim is due to be sentenced in the Sydney District Court after admitting to lending $800,000 to his other older brother, Moustafa "Michael" Ibrahim, which was allegedly used in an illegal tobacco smuggling plot.
The younger Ibrahim pleaded guilty to dealing with property reasonably suspected of being proceeds of crime after receiving $600,000 back from his brother.
A court was earlier told Fadi Ibrahim claimed he simply gave his brother a loan but police alleged he was an "active investor".
Michael Ibrahim was jailed for 25 years for his role in tobacco smuggling and conspiring to import almost two tonnes of illegal drugs.
Crown prosecutor David Jordan told a sentencing hearing on Thursday, that an affidavit by Fadi Ibrahim's wife Shayda suggested he was pressured by his older brothers into lending them money.
"When Fadi initially refused the loan, they would pressure him by calling him names and this made Fadi feel really bad," Ms Ibrahim was quoted as saying.
"Fadi felt he had no choice but to lend them money.
"He felt he had no reason to say no to Michael or John."
Mr Jordan told the court this suggested John Ibrahim was also involved in procuring the loan for the illegal tobacco import.
Judge Christopher O'Brien called the suggestion the high-profile Sydney figure and former nightclub owner was involved a "very bold submission".
"I've lived in Sydney all my life; I know who his brother is," Judge O'Brien said.
"You only have to be able to read the newspaper to know that."
John Ibrahim has never been charged in relation to the scheme and there is no suggestion he was involved.
Judge O'Brien said Ms Ibrahim's affidavit did not necessarily implicate John Ibrahim in the scheme and that both the brothers may have been seeking a loan for different purposes.
"They both may have been trying to get money out of him for a purpose," he said.
"It's not necessarily the same one."
Fadi Ibrahim's defence team previously told the court his judgment at the time of his offending was clouded by his struggles with the use of the opioid OxyContin.
Mr Jordan submitted that the court take into account in sentencing that Fadi Ibrahim remained susceptible to pressure from his brothers in relation to lending them money.
"(He has) 800,000 reasons to smarten up a bit when it comes to his ... lending habits to his brothers," Judge O'Brien replied.
"Hopefully he's learned his lesson this time."
The matter has been listed for sentence on June 28.
