Fraud Allegations Could Kill The Comeback of France's Former President 'Bling Bling' Sarkozy

Nicolas Sarkozy left the French presidency four years ago, defeated by Socialist François Hollande after one term. He's been trying to come back since, angling for the 2017 nomination from the center-right Republican party, or Les Républicains, and banking on Hollande's relative unpopularity to get back into the Elysee palace. But now, Sarkozy is being investigated over allegations of illegal campaign financing, a development that has the potential to sink his hopes of becoming president again.

According to Paris prosecutor François Molins, Sarkozy "exceeded the legal cap on campaign spending" during his 2012 presidential bid, the election he eventually lost to Hollande.

French law says that presidential candidates can spend no more than 22.509 million euros ($25 million) to cover the costs of rallies, meetings and advertising during a campaign. But according to some estimates, the Sarkozy campaign is believed to have spent close to 50 million euros, twice as much as allowed. Sarkozy, who is the current leader of the conservative Republicans, has denied knowledge of any financial scheme that may have been used to dodge the cap.

Known popularly as "Président Bling Bling" during his tenure for his flashy lifestyle, Sarkozy is still embroiled in a potential scandal tied to allegations that the Libyan regime of Muammar Ghadafi financed his 2007 campaign. He was cleared of charges in another corruption affair stemming from that campaign.

Speaking to French news channel iTélé on Wednesday, Sarkozy's attorney Thierry Herzog remained confident his client would be cleared of any wrongdoing. Herzog reminded reporters that the Constitutional Council, France's supreme court, had "already ruled on this overrun of the campaign account by imposing a [financial] penalty," which Sarkozy paid in July 2013.

What Herzog failed to say is that the Constitutional Council punished Sarkozy for exceeding the cap by a few hundred thousand euros — not for blowing it it by tens of millions.

The criminal case is known as "the Bygmalion affair," from the name of a communications firm charged with organizing various campaign events. To finance Sarkozy's lavish 2012 campaign, party aides allegedly used a system of "false invoices." Instead of invoicing the organization set up to manage campaign spending, Bygmalion sent its invoices directly to the UMP party, as the Republican party was known then. Campaign accounts remained within the legal limit, because expensive events were paid for using party funds.

Jérôme Lavrilleux, deputy director of Sarkozy's 2012 campaign, has admitted that some campaign events had been charged directly to the party, including a rally in Paris that, according to investigative news site Mediapart, cost more than 2 million euros despite campaign records showing a 180,000-euro price tag.

Sarkozy's attorney said that his client had been given the status of "assisted witness" for the other charges in the affair, related to forgery, fraud and breach of trust. According to Herzog, the ex-president's witness status implies that "the Bygmalion affair was deemed not to implicate Nicolas Sarkozy" —  who has denied that he was aware of the scheme.

When questioned in September by officers from France's anti-corruption unit, Sarkozy said he was too busy trying to win an election to notice what was going on. "As for managing expenditures, that was my team's responsibility," he said, adding that he had never been informed of any budget overruns.

And yet on April 28, 2012, a few days before the second round of voting, Sarkozy's campaign director Guillaume Lambert sent a text message to Lavrilleux saying, "We have no more money. JFC [party chairman Jean-François Copé] spoke to the PR [the President of the Republic] about it."

In an interview with French weekly L'Obs in October, Lavrilleux implicated Sarkozy in the scheme. "We should stop calling this the Bygmalion affair, and instead [call it] the Nicolas Sarkozy's Campaign Account [affair]," he said.

According to French criminal law, Sarkozy could face a 3,750-euro ($4,175) fine and/or up to a year in jail. "When choosing a sentence, the courts can take several things into account, including how high the overrun is or the general context of the case," said Alexandre Labetoule, a Paris attorney with the CLL Avocats firm, who has worked extensively on electoral affairs.

The attorney also noted it was "unlikely" the former president would be sentenced to a jail term. But "it's hardly an asset to have a sword of Damocles hanging over your head during an election campaign," he said.

Sarkozy is already trailing behind his Republican rival Alain Juppé in opinion polls, and Copé himself, another heavyweight, has just entered the race. The primary will take place in the fall.

This is just the latest legal headache for Sarkozy, who was already investigated in July 2014 after authorities secretly wiretapped conversations between him and his attorney.

The former president was accused of "active corruption," "insider influence" and "concealment of a breach of the professional secrecy" for having allegedly relied on a network of informers within the courts system and the police to stay abreast of developments in legal proceedings brought against him.

Related: Libyan Oil, Gold, and Qaddafi: The Strange Email Sidney Blumenthal Sent Hillary Clinton In 2011

A high magistrate, Gilbert Azibert, supposedly kept Sarkozy informed via Herzog of the developments in a case in which he was accused of taking advantage of the ailing, super-rich heiress Liliane Bettencourt during his 2007 campaign. The case against him was eventually dismissed.

In exchange for the confidential information, Sarkozy is believed to have promised Azibert a prestigious post in tax-haven Monaco.

That case came on the heels of Sarkozy being investigated in relation to allegations that Libyan authorities had helped finance his victorious 2007 campaign. Sarkozy is still awaiting a verdict on those charges.

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This article originally appeared in VICE News' French edition.