The brother of Australia Test cricketer Usman Khawaja was charged by police Tuesday with framing a love rival for a "hit list" that sparked a major counterterrorism investigation.
Arsalan Khawaja, 39, was released on bail after appearing in a Sydney court on charges of forgery and attempting to pervert justice.
For months he appears to have convinced Australian police that his 26-year-old university colleague Mohamed Kamer Nizamdeen was embroiled in a plot to kill then prime minister Malcolm Turnbull.
Sri Lankan-born PhD student Nizamdeen spent a month in solitary confinement at a remote high-security prison, where he was questioned about targets including not just Turnbull, but reportedly also the Sydney Harbour Bridge and Opera House.
He was eventually released in September, when police realised the script did not match his handwriting. The charges were later dropped.
"What we will be alleging is that he (Nizamdeen) was set up in a planned and calculated manner. Motivated, in part, by a personal grievance," New South Wales assistant commissioner Mick Willing told reporters.
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Willing said police believe Khawaja orchestrated the set-up and may have been motivated by a dispute over a woman.
"We will allege that that is part of the process. But as you can appreciate, the matter is before the court, so we can't go into much detail," said Willing.
Australian police now say they "regret" arresting and holding Nizamdeen, and have paid his court costs. Willing confirmed there is no ongoing threat to the community.
Nizamdeen is seeking further damages from authorities and has since returned to Sri Lanka.
"What authorities have done to this young man is absolutely unforgivable," his lawyer Moustafa Kheir said after the charges were dropped in October.
"It's a terrible experience. He is a young man that has done everything right in life. And he has gone through supermax jail -- unforgivable circumstances."