Sarkozy allegedly took funds from L'Oreal heiress Liliane Bettencourt, France's richest woman, for his 2007 election campaign.
Lawyer Antoine Gillot told French TV i-Tele that Judge Jean-Michel Gentil in the southwestern city of Bordeaux had placed Sarkozy under investigation, after hours of questioning on Thursday.
Under French law, a formal investigation is the final step before a suspect is accused of a crime.
Sarkozy, who only this month hinted he could make a political comeback, repeatedly has denied taking campaign funds from Bettencourt.
The exact charge against Sarkozy is "abuse of weakness", since Bettencourt did not have all her "faculties", according to the newspaper Le Monde.
Last November, Sarkozy was named a key and potentially indictable witness in an investigation involving 90-year-old Bettencourt.
Sarkozy's lawyer represents Bettencourt's former butler, who was also questioned on Thursday along with the former president.
A Paris-based journalist Anne-Elisabeth Moutet told Al Jazeera Sarkozy, 57, could face a suspended jail sentence
'Politcal stench'
A poll published on March 18 showed Sarkozy was the overwhelming favourite among conservative voters to run for
president and for the first time since November 2011, a survey the same week said he also was now more popular than Hollande among the French.
The news of the investigation will provide some respite for President Francois Hollande who is being battered in the polls for his handling of the economy.
Hollande also suffered a setback this week when budget minister and cabinet heavyweight Jerome Cahuzac was forced to resign over a tax-fraud inquiry.
Sarkozy's former industry minister Christian Estrosi said there was a "political stench" to the decision.
"Everybody will notice that this happened 48 hours after a Socialist minister was called into question, probably to
compensate for that," he said in a statement.
More cases
Investigating judge Jean-Michel Gentil was looking into conflicting accounts about how many times Sarkozy visited the home of Bettencourt in the run-up to his winning 2007 campaign for president, according to one lawyer.
Bettencourt was declared in a state of dementia in 2006 and was placed under the guardianship of her family in 2011.
Earlier in the probe, Bettencourt's ex-accountant told police she gave $192,000 to the manager of Bettencourt's fortune that was to be passed on to Sarkozy's campaign treasurer.
"If Mr Gentil placed Mr Sarkozy under investigation this evening it's because he had a reason to do so,'' said Gillot on French TV i-Tele. "It was a semi surprise ... it means the judge has a certain number of facts.''
Bettencourt's family has long had close connections with the UMP party of Sarkozy, who lost presidential immunity when he left office.
Lawyers are also demanding that Sarkozy explain himself in two other cases. One is about the terms of a submarine sale to Pakistan and another concerns lavish spending on opinion polls by his office when he was president.
Original Article
Source: aljazeera.com
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