Investigators found Northe gave his auditor false receipts and bank statements, claiming he paid for administrative assistants through a labour hire firm, bought a new printer and paid $3100 per month in office rent. 

The auditor signed off on his claims, believing they were legitimate. 

In the end, Northe claimed $192,863.40 in expenses across the two years, with $175,813.40 being falsely made. 

IBAC charged Northe in September last year, a couple of months before he confirmed he would not recontest his seat at the state election.

The 57-year-old on Wednesday pleaded guilty to two counts of misconduct in public office in the Victorian County Court.

His lawyer Christin Tom said Northe had falsified documents and made illegitimate claims to fund his gambling addiction.

Northe spent about $170,000 he received from the electoral commission on betting, the court was told.

Between July 2018 and October 2019, Northe lost more than $223,000 through gambling.

The 57-year-old felt extreme shame and remorse for crimes, and his gambling addiction cost him his house and career, Mr Tom said.

"He's had a spectacular fall from grace," he told the court.

Northe stopped drinking and betting in early 2021 after he was admitted to a psychiatric facility for a suicide attempt.

He still regularly sees his psychologist for his diagnosed depression and bipolar disorder, and his mental health would deteriorate further if he was jailed, Mr Tom said.

He urged Judge Michael McInerney to sentence Northe to a community corrections order, saying it would be a sufficient punishment without impacting his health or chances of rehabilitation.

But prosecutor David Hancock argued a short term of imprisonment with a corrections order was the only available sentence and measures could be put in place to protect Northe in prison. 

Judge McInerney will hand down his sentence next month.

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