Former IMF head Dominique Strauss-Kahn has been detained for questioning by French police investigating a prostitution ring.
Mr Strauss-Kahn, once a front-runner for the French presidency, could be held for 48 hours at a police station in Lille, northern France.
Investigators have already questioned a number of prostitutes who have admitted having sex with Mr Strauss-Kahn.
The 62-year-old insists he did not know that the women were prostitutes.
"I challenge you to distinguish a naked prostitute from any other naked woman," his lawyer Henri Leclerc has told French television.
Mr Strauss-Kahn resigned as head of the International Monetary Fund (IMF) in May 2011 after he was charged in New York with the attempted rape of a hotel maid. The case was later dropped.
In this separate inquiry, French police have already arrested eight men on suspicion of organising a prostitution ring and misusing corporate funds to pay for sex in a scandal known as the "Carlton affair" because of a Lille hotel where clients were allegedly supplied with call-girls.
Three of the suspects were said to have been close to Mr Strauss-Kahn, who is said to have taken part in sex parties in Paris and Washington in late 2010 and early 2011.
Consorting with prostitutes is legal in France but supplying prostitutes to others is illegal.
It is also illegal for an official to accept gifts of any kind from a company.
Dominique Strauss-Kahn had been tipped as a potential Socialist candidate in the April presidential elections until his arrest in New York in May last year.
One of the sex parties, allegedly organised by two of the eight suspects, Fabrice Paszkowski and David Roquet, is believed to have taken place in the US shortly before he was detained.
Mr Strauss-Kahn returned to France in September 2011 although the hotel maid involved in the case is pursuing a civil action.
The former IMF head said nothing as he arrived at a Lille police station in a car shortly before 0900 (0800 GMT) on Tuesday.
On Tuesday night, a judge extended Mr Strauss-Kahn's detention for another 24 hours, an unidentified official told AFP news agency.
The judge will decide whether the evidence supports charges against Mr Strauss-Kahn. He could be cleared, charged and released on bail or remanded in custody until his trial.