The conservative candidate has been put under formal investigation on suspicion of diverting public funds, complicity in misappropriating funds, receiving the funds and not declaring assets fully, a judicial source said.
Fillon was called in for questioning over having employed his wife as a parliamentary assistant, a job for which she was paid, allegedly without doing the required work.
The center-right candidate is accused of using public funds to employ his wife and two children for fake tasks.
Fillon has denied breaking the law, and prior to the campaign said it would be inconceivable for a candidate to remain in a presidential campaign under his current circumstances.
Since 2012, Mr Fillon has received clothing worth almost $73,300 furnished by jet-set French tailor Arnys, the weekly Journal du Dimanche said in a report. It is a step toward a trial, although investigations can be dropped before continuing to court proceedings.
Both Mr and Mrs Fillon face more than a decade each in prison if found guilty, but still insist they are popular enough to become President and First Lady of France this May.
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Voter surveys show Fillon, seen as the frontrunner in the presidential race before the scandal broke, trailing in third behind centrist upstart Emmanuel Macron and far-right leader Marine Le Pen.
Le Parisien said Marie Fillon transferred 70 percent of some 46,000 euros she got back to her parents' joint bank account, a figure confirmed by her lawyer Kiril Bougartchev. The charges came a day before he was scheduled to be questioned in a probe into whether family members did real work while paid as parliamentary aides.
That image has been further dented by reports that he accepted an interest-free loan of 50,000 euros from a business magnate friend and a report this weekend that he has received gifts of clothing since 2012 worth nearly another 50,000 euros.
Of the total sum for the suits, €35,500 was paid in cash, the paper said, adding that a young woman generally delivered the money to the chic Parisian tailor.
"A friend gave me suits as a present in February".
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