Steve Bannon was pardoned by Donald Trump before the former president left office, but the former Trump strategist may still face state charges, according to The New York Times.
Presidential pardons only cover federal crimes. State charges cannot be dismissed via pardon.
The Manhattan District Attorney's office began the investigation after reviewing the list of 143 pardons made by Mr Trump in the final hours of his presidency.
The investigation will also examine Ken Kurson, another Trump ally who was pardoned after being charged with cyberstalking a doctor and other related offenses.
New York District Attorney Cy Vance's investigation of Mr Bannon has already included records requests and identified a pair of witnesses.
Robert J Costello, Mr Bannon's lawyer, told The Times "We don't comment on speculation."
Mr Kurson's lawyer, Marc L. Mukasey, told The Times We have heard nothing from the D.A.’s office," and that “the facts and the law are on Ken’s side, and we believe that no reasonable prosecutor would go forward.”
Mr Bannon and three other men were indicted in August for defrauding donors to the We Build the Wall organisation, which claimed its purpose was to raise money for building Mr Trump's border wall.
According to the indictment, Mr Bannon and others diverted some of the money raised for their own personal use. Mr Bannon apparently received $1m from the organisation.
Mr Vance is no stranger to the world of Mr Trump and the alleged corruption plauging his organisation and allies.
The district attorney has been investigating Mr Trump's Trump Organisation for more than a year, seeking to uncover potential financial crimes committed by the organisation and those within.
While it appears Mr Trump will be acquitted by Senate Republicans in his upcoming impeachment trial, Mr Vance's investigation poses the most potent legal threat to the former president.
Mr Vance is currently waiting on a ruling from the US Supreme Court to determine whether or not he will gain access to Mr Trump's tax returns and other private records.
The district attorney has already seen one victory in the Supreme Court; the justices ruled that Mr Trump could not block Mr Vance from accessing the records.
Mr Vance's office has also appealed Mr Trump's pardon of ally Paul Manafort, who was convicted of federal crimes in 2018. The district attorney attempted to bring state charges against him as well, though those charges were eventually thrown out by the court.
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