‘Aggravated Pimping’ Probe for Strauss-Kahn

French magistrates charged Dominique Strauss-Kahn with “aggravated pimping,” placing the former International Monetary Fund chief under preliminary investigation for his alleged involvement in a French prostitution ring, prosecutors said.

The magistrates on Monday ordered Mr. Strauss-Kahn to refrain from communicating with plaintiffs as well as with anyone else being prosecuted in the investigation, prosecutors from the northern French city of Lille said in a statement. Mr. Strauss-Kahn, who wasn’t detained or arrested, was also ordered to pay a €100,000 bail ($133,500).

A lawyer for Mr. Strauss-Kahn said that his client “strongly and firmly” rejected the preliminary charges.

Prostitution is legal in France, but pimping isn’t. To indict him, prosecutors would have to prove that he played an organizational role in the alleged prostitution ring.

The decision was a severe setback for Mr. Strauss-Kahn, whose sexual behavior has been in the international spotlight over the past year. The French ruling come two days before a New York court takes up a civil case in which a hotel maid accuses Mr. Strauss-Kahn of sexually assaulting her.

New York prosecutors have dismissed criminal charges against Mr. Strauss-Kahn in that case, saying they couldn’t prove beyond a reasonable doubt he had attacked the maid, Nafissatou Diallo, in May. Mr. Strauss-Kahn has denied he raped or assaulted Ms. Diallo.

Monday’s decision was announced after Mr. Strauss-Kahn was questioned for eight hours by the Lille magistrates, who are conducting an investigation into an alleged prostitution ring. Mr. Strauss-Kahn was detained and questioned by police for a day-and-a-half in the same case last month, prosecutors said.

Investigators allege that Mr. Strauss-Kahn, while he was head of the IMF, took part in parties organized by an alleged prostitution ring, people familiar with the matter said. Through lawyers, Mr. Strauss-Kahn has acknowledged publicly to participating in parties, notably in Washington and in Paris, but has said he didn’t know that women present may have been prostitutes.

“He never had the slightest knowledge that the women he met could be prostitutes,” Mr. Strauss-Kahn’s lawyer Richard Malka told French radio on Monday.

Investigators had considered investigating Mr. Strauss-Kahn for allegedly illegally benefiting from prostitutes paid through corporate accounts. At least one company has filed a complaint to prosecutors that corporate funds had been diverted for that purpose by the alleged prostitution ring, the people familiar with the matter said.

But on Monday, the Lille magistrates opted not to probe that allegation, the people familiar with the probe said.

Through lawyers, Mr. Strauss-Kahn has said that he had no knowledge that company funds may have been misappropriated by the alleged ring.

Preliminary charges have been brought against nine people in connection with the alleged prostitution network, including Mr. Strauss-Kahn, a police commissioner and a former regional head of a French company, who prosecutors say was allegedly filing expense reports to cover its costs.

Mr. Strauss-Kahn is expected to learn Wednesday if the civil case filed by Ms. Diallo against him will proceed in New York. A judge is expected to rule whether the lawsuit filed by the former hotel housekeeper can be brought to trial or if it lacks merit.

Mr. Strauss-Kahn, who harbored presidential ambitions before his May 2011 arrest in New York, eventually announced that he would not run for president in 2012. That opened the way for French Socialist Francois Hollande to become the candidate who will challenge President Nicolas Sarkozy