Usman Khawaja's Brother Arrested Over Alleged 'Terror Hit List'

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Australian cricket star Usman Khawaja hung his head in his hands as tears welled in his eyes during training on Tuesday - just hours after he learned his brother had been arrested for allegedly faking a terror plot to frame his love rival.

Australian media, quoting police sources, said Arsalan Khawaja was being questioned about forgery and an attempt to pervert justice.

The Australian Broadcasting Corp. reported police were not alleging Arsalan meant to carry out terrorist attacks but that he tampered with the laptop to frame a colleague, 25-year-old PhD student Mohamed Nizamdeen.

He was released only weeks later, when police figured out the script did not match his handwriting.

Khawaja, 39, was arrested in Parramatta at 8.30am today following a three-month investigation by the NSW Joint Counter Terrorism Team.

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"We will be alleging that he was set up in a planned and calculated manner", he said.

He appeared before Parramatta Local Court on Tuesday afternoon. "Motivated, in part, by a personal grievance", New South Wales assistant commissioner Mick Willing told reporters.

"Out of respect for the process, it would be inappropriate for me to make any further comment".

Willing confirmed there is no ongoing threat to the community.

Usman Khawaja, who is preparing with the Australia squad in Adelaide ahead of Thursday's first test against India, made a brief statement asking for privacy while the case ran its course.

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Tuesday's police operation stemmed from the discovery in an office at the University of New South Wales of a laptop which contained an alleged hit-list naming former prime minister Malcolm Turnbull and his deputy Julie Bishop.

According to the Herald, Mr Nizamdeen is now suing police over his arrest, claiming the authorities were "immature" and "unprofessional" in the way they treated him.

Speaking hours after the arrest, he asked for his family's privacy to be respected.

Police will allege Khawaja attempted to set up Nizamdeen because of a dispute over a girl.

Following "definitive advice", NSW Police formally withdrew the charges on November 16. "But as you can appreciate, the matter is before the court, so we can't go into much detail", said Willing.

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