A central figure in the development of the Victorian Department of Education's ill-fated Ultranet project had previously pleaded guilty to fraud, an anti-corruption hearing has been told.

Greg Tolefe was the managing director of CingleVue, a company key to developing the winning tender for the Ultranet computer system contract.

Investigators from the Independent Broad-based Anti-Corruption Commission (IBAC) revealed Mr Tolefe had pleaded guilty to fraud for submitting false claims for expenses.

The hearing was also told Mr Tolefe ripped off his fellow directors of CingleVue when he negotiated the sale of the company.

Mr Tolefe pocketed $10 million from CingleVue's $11 million sale price, despite owning owned 35 per cent of the company.

Greg Martin, another CingleVue shareholder, also owned 35 per cent of CingleVue yet was paid just $800,000.

Ian Hill QC asked Mr Tolefe: "How was it worked out that Mr Martin's 35 per cent shareholding was worth $800k?"

"I paid what I was legally and commercially obliged to pay," replied Mr Tolefe.

Asked how he worked the amount out, Mr Tolefe said: "Through negotiation."

IBAC is examining how the contracts for the failed Ultranet computer system project were tendered and awarded, and the connections between department employees and the businesses involved.

The winning bid came from a company called CSG, in partnership with Oracle.

True price of CingleVue sale not disclosed, court hears

Mr Hill asked if CSG had agreed to pay $5 million for CingleVue.

"It was actually more. It was $11 million," Mr Tolefe said.

"It was $5 million and then there was a $6 million to be paid out based on an earn out."

The hearing was told another CingleVue shareholder, Frank Aloisio, had a 20 per cent stake in the company yet he was only paid $200,000.

"Do you think you might have told him you sold the business for less than $5 million?" Mr Hill asked.

Mr Tolefe said he had not disclosed the true purchase price of CingleVue to his fellow directors and shareholders.

"It's not as though you are an honest man, is it Mr Tolefe?" Mr Hill asked.

"I don't know what you mean by that," Mr Tolefe said.

"Well you pleaded guilty to fraud in WA," Mr Hill said.

Court documents were then tendered to the investigation detailing fraudulent travel claims against Mr Tolefe.

Mr Tolefe pleaded guilty to the charges and repaid $9,000 to his former employer ASG.

No conviction was recorded against Mr Tolefe but the hearing was told character references presented to the West Australian Magistrates Court were false.

Mr Martin has previously testified he was coerced by Mr Tolefe to sign a false character reference for him.