French presidential candidate Francois Fillon has been placed under formal investigation for misuse of public funds, the country's prosecutor has confirmed.
The prosecutors allege that Mr. Fillon misappropriated public funds by paying his family without requiring them to do work.
He is also suspected of giving two of his children fake jobs as parliamentary assistants when he was a senator and they were still students. He has denied any wrongdoing and has said he will cooperate with the judiciary.
Fillon was the clear frontrunner at the beginning of the year but polls now indicate he would be eliminated in the first round of the election on April 23.
The former prime minister had said he would quit the race if a formal investigation against him was opened.
It is a step towards a trial, but many investigations have been dropped without going to court.
Despite these warning signs - not to mention the rising popularity of the far-right National Front, led by the outspoken Marine Le Pen - Fillon has refused to quit the race, insisting that the scandal is an attempted "political assassination" with little basis in reality.
Another development on Sunday was a report in the French weekly newspaper Journal du Dimanche saying an anonymous person had given Fillon two suits costing 13,000 euros at a chic Paris boutique.
The newspaper said Charles Fillon similarly transferred back to his parents about 30 percent of the monthly wage of 4,846 euros he was paid by his father. Of that sum, 35,500 euros was paid in cash, with the remainder paid by cheque, the report said.
Nevertheless, the charges mark a significant escalation in a scandal that first broke in late January. Francois Fillon's lawyer told Le Parisien there was nothing unusual about the transfer.
It is legal in France for politicians to hire family members, on condition that the work that they are paid for is in fact real.
The payments appear to jar with a campaign in which Fillon, who customarily sports clean-cut, dark suits and striped shirts, has pitched himself as ethically irreproachable.