More than $500,000 meant for Victorian community groups was allegedly used to pay the private legal fees of controversial Aboriginal leader Geoff Clark.

Some of the transactions were labelled "community activities" in financial documents.

Another $100,000 from a government-funded house painting contract was allegedly taken from one community organisation controlled by Mr Clark and paid back into the account of another group, also controlled by him.

Geoff Clark leaves Warrnambool Magistrates Court earlier this year. Credit:Warrnambool Standard

Mr Clark, 67, the former head of the disbanded Aboriginal and Torres Strait Islander Commission, was once one of Australia's most senior Aboriginal leaders.