The former IGP stands accused of using the fund for personal gain.
According to a report by Premium Times, the former IGP was arrraigned alongside a former police commissioner, John Obaniyi, for diverting N557,995,065, donated by the Bayelsa state government for the purchase of arms, for their own private use.
The two allegedly diverted the fund into separate privately-owned bank accounts where it generated an interest of N16,412,315 that was used for personal gain.
According to the court papers, the defendants also lied to officials of the Independent Corrupt Practices and other related offences Commission (ICPC) that the generated interest was used for official purposes.
During the court hearing on Thursday, Ehindero and Obaniyi pleaded not guilty to the charges and were admitted on bail by the court before the case was adjourned till June 19.
Both defendants were initially arraigned for the same offence in 2012 but challeneged it through a preliminary objection and asked the court to suspend the trial pending the determination of an appeal application.
In December 2017, the Supreme Court ruled that the trial should recommence with the two defendants facing the charges.
Ehindero was appointed IGP in 2005 to replace Tafa Balogun, who was forced out because of widespread charges of corruption, and remained in the position till 2007.