A former employee of the Tepaki Group in the Cook Islands and his partner are seeking a retraction of false statements made to local media by Tim Tepaki.
Mr Tepaki alleged that the former employee, William Framhein, was fingerprinted by police and was forced to hand in his passport on last December.
The couple has already filed a 300,000 US dollar defamation suit against the Tepaki Group over earlier comments made in the Cook Islands News.
But Mr Framhein's lawyer, Charles Little, says the latest allegation made by Tim Tepaki has been refuted by police in a signed letter.
"If anything the usual course of action from Tepaki seems to be more mud slinging in the newspapers. But when it comes down to actually getting an apology or a retraction of statements it doesn't seem to be forthcoming. So I will be proceeding under the instructions of my client, and that is to continue with defamation proceedings."
Charles Little says a fraud complaint has been lodged by the Tepaki group against Mr Framhein, but no arrests have been made as investigations are continuing.