According to The National, the police investigations unit apprehended Nape as he was leaving the Kundiawa Court House on Friday.
Nape was there to address a 30,000 kina bribery charge relating to the recent election.
The new charges reportedly follow investigations that Nape misused K5 million ($A2.24 million) of government funds which were earmarked for education projects.
Nape was held by Goroka police for the night and flown to Port Moresby the next day.
Nape became a magnet for criticism during some of the bizarre political events of the previous O'Neill-Namah government. He even briefly became a Parliament-appointed acting governor-general at one stage.
He was also one of the high profile scalps of the recent election. Nape lost his Sinasina-Yongomugl open seat by a wide margin to the National Alliance Party's Kerenga Kua.