The shotgun used to kill one man and wound three police officers during the Brighton terror siege two weeks ago cost $2000 and was sold in a suburban car park, a court has heard.
And the man accused of selling the gun told police he was concerned it was being bought by a member of the Apex gang.
George Matte-Hado, 36, faced the Melbourne Magistrates Court charged with six offences relating to the supply of a weapon allegedly used by Yacqub Khayre during the Brighton terror siege on June 5.
He was arrested last Friday and applied for bail on Monday.
Police allege Khayre contacted another man, Burak Diler, on May 18 about acquiring the shotgun, and they discussed the purchase using coded language.
The next day, Mr Diler contacted Mr Matte-Hado, a family friend and former co-worker, about buying the gun: a Nikko 12-gauge shotgun.
Police allege Mr Diler told Mr Matte-Hado that the man who wanted to buy the gun was named "Yacqub", was African, and lived in Roxburgh Park.
Mr Matte-Hado told police he then asked around to see whether the man buying the gun was a member of the Apex gang. He could not find out any further information about the man, and agreed to continue with the sale, he told police.
The deal was made in a car park in the Greenvale Gardens housing estate, in Melbourne's outer-north.
Khayre allegedly drove Mr Diler to the meeting.
Mr Matte-Hado sold the gun, which he had wrapped in a mechanic's rag, for $2000, and then gave $300 back to Mr Diler for drugs.
On the evening of Monday, June 5, Khayre killed hotel clerk Kai Hao and took a female escort hostage at the Buckingham Serviced Apartments on Bay Street before opening fire at police, injuring three special operations group officers.
Khayre died in a hail of police bullets, putting an end to the siege. Another shotgun, found after Khayre died, had not been fired during the incident.
Mr Diler is one of three other men charged in relation to supplying Khayre with guns.
Mr Matte-Hado, a married father-of-two from Greenvale, who allegedly had no knowledge of Khayre's plot, was "disturbed" when he learnt the gun had later been used in the siege.
He told police the gun had been registered when he bought it.
Mr Matte-Hado had never been licensed to own a firearm, and the gun was not registered when he sold it to Khayre, the court heard.
The accused decided to sell the gun because he needed the money to pay his mortgage, but had also spent $300 on drugs. He told police he used speed and marijuana monthly.
His lawyer, Joseph Burke, said that he had been persecuted as a child in Iraq, which he left in 1992, as his family were Christian.
"This was a shock to his family," Mr Burke said.
"My client is disturbed by what's happened. His whole family is disturbed."
Mr Burke argued that because the charges related to the supply of a category A firearm – the least serious category – that it was possible his client would be sentenced to a community corrections order, rather than a jail term.
But Chief Magistrate Peter Lauritsen rejected this, saying the maximum penalty for the most serious offence was two years' jail, and denied bail.
He said Mr Diler knew to contact Mr Matte-Hado to supply a gun, and that the gun was then used in "the most serious crime" which can be committed.
"That tells me the accused himself is part of a world of criminals," Mr Lauritsen said.
Mr Matte-Hado and three other men charged in relation to firearms dealt to Khayre will reappear in court on July 25.