The former federal politician faced Sydney's Downing Centre Local Court on Monday after previously being granted permission to leave the country while awaiting trial for a separate case in the district court.
But magistrate Te'res Sia rejected an application to vary Thomson's bail conditions ahead of his local court sentencing for fraud offences, stymieing his ability to travel.
The former Health Services Union national secretary has pleaded guilty to two counts of dishonestly obtaining a financial advantage by deception.
Thomson applied for and received $25,000 in COVID-19 support grant money for a cafe owned by his wife, from whom he has since separated.
Agreed facts filed with the court noted the 59-year-old ex-MP did not want things in his own name.
Leaving court after his application to vary bail was refused, Thomson said he was not done trying. (Bianca De Marchi/AAP PHOTOS)
"Any house, asset or business associated with (Thomson) was purposely put in his wife's name until (their) separation," the document said.
When ServiceNSW conducted a review a year after paying the grants, Thomson's former wife informed them she did not make the application.
That sparked an audit, which revealed Thomson as the applicant.
The money was used to pay credit card debt, private school fees, a leased car, rented property and a mortgage.
The magistrate said there was a high likelihood Thomson could fail to return to court if he was allowed to leave the jurisdiction and extraditing him from India might prove difficult.
His criminal history also showed a propensity to commit fraud offences and engage in deceitful behaviour, Ms Sia said.
The court heard Thomson's consultancy work required him to travel to India to oversee a garlic shipment from January 13.
Thomson rose from his seat in the gallery to instruct his lawyer that the shipment had been booked, however no evidence was tendered in court.
Prosecutor Tom Sands said letting Thomson go presented too big a risk.
"The court can simply not trust Mr Thomson, based upon his own conduct, his own behaviour, his own record … that he can go to another jurisdiction and return when he has the proverbial sword of Damocles hanging over his head," he said.
A pre-sentencing report is being prepared after Thomson pleaded guilty to what the prosecution described as an overwhelming case that demonstrated the 59-year-old was dishonest and deceitful.
But Thomson's ties to Australia would ensure he returned, his lawyer told the court.
"He's not simply going to just fly to India and not come back," he said.
Thomson was suspended by the Labor Party in 2012 and moved to the cross bench after accusations he misused members' funds while at the Health Services Union.
A Victorian court later convicted the former member for the NSW Central Coast seat of Dobell over the theft.
Leaving court after his application to vary bail was refused, Thomson said he was not done trying.
"We'll make another application before I go," he said on Monday.
Thomson is due to be sentenced in the local court in February before facing other charges in the district court.
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