Claude Guéant, whose career has included a stint as interior minister and running Sarkozy’s bid for the presidency in 2007, was charged with tax avoidance as part of an organised group and forgery after 30 hours of questioning on Saturday night.
The accusations arise from a raid in February 2013 when investigators found a 500,000-euro transfer into Guéant’s bank account.
He claimed the money was paid by a Malaysian businessman for the purchase of a 17th-ceuntry Flemish painting but experts say the highest price ever paid for a work by the artist, Andries van Eertvelt, is about 140,000 euros.
Guéant was arrested on Friday and taken to the offices of the anti-corruption bureau in Paris.
His lawyer, Philippe Bouchez el-Ghozi, said his client had faced "almost 300 questions that mainly focused on the so-called Libyan funding" and denied any wrongdoing.
Suspicions about Sarkozy’s 2007 campaign funding surfaced during the 2012 campaign when the Mediapart website published a 2006 document purporting to show arrangements for 50-million-euros-worth of Libyan money to be funnelled into the campaign.
El-Ghozi said his client had not been charged as part of the main probe and that his case boiled down to "justifying the acquisition of two paintings 22 years ago" and whether they had been properly declared for tax purposes.