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Former MP guilty of defrauding mother-in-law
Peter Shack leaving court today. Picture: Ben Crabtree/The West Australian

A former federal politician faces jail after this afternoon being convicted of fraud for fleecing his mother-in-law's estate of $100,000, sparking scenes of relief outside court from his estranged wife and her family.

A District Court jury took just over five hours to find Peter Donald Shack, who served as the Liberal MP for Tangney for 15 years, guilty of one count of fraud. The ex-politician was emotionless in the dock as the verdict was revealed following a four-day trial.

Shack, 59, defrauded his mother-in-law Mary Stasinowsky of $100,000 in July 2004, with his wife Pauline telling the jury he confessed to her that her mother had refused him a loan, but he claimed he deserved the money and took it anyway.

On the witness stand, Shack denied anything fraudulent, saying Mrs Stasinowsky agreed to loan him the money but wanted to keep it secret to avoid her children finding out. He said in hindsight it was foolish to have covered-up the transaction by faking an invoice and putting wrong information on the cheque stub. He denied the prosecution claim he got his mother-in-law to sign a blank cheque.

Shack, who was a director of the family trust for two years before being removed after his actions were exposed at a family meeting in 2010 but helped manage his mother-in-law's finances for the previous decade, was granted bail ahead of his sentencing in April.

He did not comment as he left court surrounded by supporters.

During the trial, evidence was heard of a bitter family feud and how the family fortune, once valued at $6 million, had been decimated by the global financial crisis.

Outside court, Pauline Shack said the past three years had been "horrendous" but the family was pleased it had justice for her late father and her mother, who now suffered from dementia. Mrs Stasinowsky did not have the condition in 2004.

"Mum and dad worked so hard for us ... and for Peter to have stripped it all away plus break our family down as he has done has just been so destructive and shocking," she said.

Her sister Karen Jones, who reported the fraud to police, said the family could now start to move on and rebuild after Shack not only affected them financially but strained relationships and at times "pitted us against each other."

Det-Sgt Shane Giblett, from the Major Fraud Squad, said outside court this case highlighted the need for family trusts to be scrutinised, to have co-signatories on cheques and all members listened to.

He said police would be suggesting to the prosecution that an immediate jail term was appropriate for Shack.