AARON Sabbah tried to extort money from a Sydney mechanic he blamed for losing his Mercedes-Benz by threatening him with a large black sex toy, a court has been told.

Sabbah was armed during an attempt to demand money from Michael Monajed, Sydney's Central Local Court was told during a bail application on Friday.



"What is the alleged arm?" Magistrate Eve Wynhausen asked.



"It's a black dildo, your honour," prosecutor Christian Hearn said.



According to court documents Sabbah arrived at Mr Monajed's workshop on April 22.



"Sabbah ... entered the workshop in an intimidating manner with a large black dildo in his right hand, which he was smacking into his left hand continually in an aggressive and threatening manner," the documents state.



The 39-year-old's $167,000 Mercedes-Benz had been repossessed in January after he defaulted on a loan.



A week later Sabbah drove the repossessed vehicle away from the car yard where it was being held and took it to Mr Monajed's Botany workshop to have the brakes replaced.



The next day police spotted Mr Monajed driving the stolen car.



They took back the car and released the mechanic without charge.



In the meantime, Sabbah, who was overseas, rang the mechanic and demanded $10,000 that he estimated was the outstanding loan amount, which turned out to be $112,000.



"You are responsible for losing my car," court documents allege Sabbah said.



Over the next few weeks Sabbah upped his demand to $30,000 and made threats of violence.



The mechanic bought Sabbah a used Honda for $800, but Sabbah demanded something better.



"Get me a better car, this is a piece of s***," Sabbah allegedly told Mr Monajed.



During February and March, Sabbah allegedly made more threats of violence and the mechanic paid him cash totalling $4500.



After being threatened with the dildo on April 22, Mr Monajed fled the premises and contacted police. Meanwhile, Sabbah allegedly stole $400 from his desk.



Sabbah was arrested that evening and charged with robbery in company, demanding money with menaces and stealing two vehicles from the mechanic.



He has not been charged with any offences relating to his Mercedes.



His lawyer Peter Givorshner and instructing solicitor Martin Ricci told the court that the police statement of facts indicated Mr Monajed had accepted responsibility for losing the Mercedes and agreed to pay Sabbah.



The magistrate denied Sabbah bail and adjourned the matter to July 18.