Richard Steele, described by police as a key witness in the Boxing Day shootout that killed 15-year-old Jane Creba, is back in custody after a loaded handgun was allegedly found inside a car he was riding in.

The 20-year-old Seneca College student was arrested in Hamilton on Sunday and charged with several gun offences and breaching his probation, his lawyer confirmed.

Selwyn Pieters told CTV News the gun did not belong to his client, and he will fight the charges.

"His family is in a state of shock, he is in a state of shock and bewilderment, and I am, as his lawyer," Pieters said.

Steele served several months in jail for drug and gun charges from evidence that came out of phone taps during the Creba murder investigation.

Crown prosecutors allege Steele was standing next to Creba when she was shot on Yonge Street on Dec. 26, 2005, and he may have been the intended target.

Steele had just been released from jail on gun and drug charges when the 2005 daytime shooting claimed Creba's life and wounded six others.

Police affidavits filed in court say Steele was robbed by a group of men at the Eaton Centre only 30 minutes before the shooting.

The Boxing Day scuffle erupted into a full-blown street shootout outside the Foot Locker store.

Steele can be heard on cellphone wiretaps, recorded directly after the shooting, telling someone that he saw Creba fall beside him.

Earlier this year, Steele told reporters his life is in danger because he is being forced to testify in the murder trial, which is expected to take place next summer. He claims he was shot at recently, but not injured.

Numerous suspects face charges of second-degree murder and manslaughter in connection with the Creba slaying.

Steele will appear for a bail hearing next month. He has never been accused in Creba's death.

With a report from CTV's Chris Eby