Former MEP Nikki Sinclaire has been charged with money laundering and misconduct in public office.
Ms Sinclaire, 45, who represented the West Midlands for UKIP, then as an independent, will appear at Birmingham Magistrates' Court on 17 September.
She is accused of making false and dishonest submissions for travelling expenses and transferring the proceeds of fraud through a bank account.
She said she "strongly refuted" the charges and would be defending herself.
The offences allegedly occurred between 1 October 2009 and 31 July 2010.
Ms Sinclaire was elected as a UKIP MEP in 2009 but was expelled from the party the following year in a row over its membership of the Europe of Freedom and Democracy grouping.
She remained in the European Parliament as an independent before forming the We Demand A Referendum Now Party in 2012, but lost her seat in elections held last May.
She was originally arrested on 22 February 2012 and has since been on police bail.
Three other people were also arrested but will face no further action.
Ms Sinclaire said: "I am disappointed that the police have chosen to charge me with the above offences without questioning me on them, after a two-and-a-half-year investigation.
"The charges relate to my time as a UKIP MEP when I was under the guidance and oversight by the party in the Parliament. This will prove pivotal in resolving the matter.
"During my time as an MEP I put in more than £120,000 of my salary into the cost of my work activities.
"It was also me, who in 2010, drew the attention of the West Midlands Police, to irregularities I discovered had taken place, without my knowledge, in my UKIP office.
"I am certain I shall be found innocent of these ludicrous and unfounded accusations."