The former boss of the International Monetary Fund (IMF) Dominique Strauss-Kahn was placed in custody on Tuesday over an alleged prostitution ring in Lille, northern France, local media reported.
BFMTV channel said the scandal-hit former French finance minister would be questioned for up to 48 hours over his alleged involvement in an illegal prostitution ring which supplied women to clients in the city's luxury Carlton hotel and for abuse of corporate funds, Xinhua reported.
Strauss-Kahn risks seven years in jail and a fine of 375,000 euros (496,490 U.S. dollars) if investigations would prove he knew women at orgies he attended were prostitutes, the report added.
The Socialist veteran was forced to quit his job in the IMF last year after police arrested him in New York on charges of attempting to rape a hotel maid. U.S. prosecutors decided later to drop the charges for concerns over the credibility of the hotel maid, Nafissatou Diallo.
In a separate case last October, French writer Tristane Banon accused the former IMF chief of attempted rape during a 2003 interview in his flat. The investigation was dropped as the incident happened too long ago, according to Paris prosecutor's office.