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 the money 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 not to the investments it's supposed to have," he said.

Detective Senior Constable Henderson said the money was supposed to go to three investments.

"One was like a future-start-up-type investments fund and the other was a diversified property fund and the other was a balanced property fund," he said.

"None of the money went to any of those investments."

Seb Monsour has been denied bail. ( www.majellagroup.com )

He said the money was unlikely to be recovered.

"It's gone," he said.

Police also described the case as a "long and protracted investigation".

Acting Detective Superintendent Peter Brewer said people need to be diligent when investing.

"Seek independent financial advice, talk to trusted friends and relatives, and just be sure of the investment you are making," he said.

He said in this case the person "invested in good faith".