Judges grill Strauss-Kahn over prostitution case

LILLE, France (Reuters) - Former IMF chief Dominique Strauss-Kahn was questioned by three judges on Monday over his role in a prostitution case in the northern French city of Lille that could see him placed under formal investigation.

The Socialist ex-finance minister, a strong contender to be France's next president until he was hit with sex assault charges in New York last May, appeared at the Lille court two days earlier than scheduled, although no official reason was given for the date change.

The Lille prosecutor's office said the closed hearing began on Monday afternoon and would likely run late into the evening.

Despite the change in date, a group of about 30 reporters and photographers waited outside the court, while scantily-clad women who appeared to be sex workers tried to drum up business nearby.

Using prostitutes is not illegal in France, but Strauss-Kahn risks a legal probe if investigators decide he knowingly had sex with prostitutes paid for out of company funds.

Strauss-Kahn went from being a highly respected politician to being hounded in the world's media after a New York hotel maid accused him of trying to rape her. The charges were dropped after prosecutors decided the maid's testimony was unreliable.

But Strauss-Kahn, 62, was hit with a separate sexual assault accusation in France and on Wednesday his lawyers will be in a Bronx courtroom fighting a civil lawsuit brought against him by the hotel maid.

The Lille case centers on allegations that a prostitution ring organized by Strauss-Kahn's business associates supplied clients at the city's Carlton Hotel.

Strauss-Kahn - who is now jobless and lives a life behind closed doors in Paris, mainly out of the public eye -- has denied the allegations, arguing that he was unaware women he met at parties organized by business associates in Lille, Paris and Washington were prostitutes.

PROTESTS UNDERMINE COMEBACK

Strauss-Kahn has been seeking to restore his reputation as a top global economist by speaking at conferences, but cancelled an appearance at an event in Brussels on Tuesday following protests from European members of parliament (MEPs).

He was due to speak at a debate of young MEPs alongside Jean-Claude Juncker, who chairs the Eurogroup of euro zone finance ministers, and former European Central Bank head Jean-Claude Trichet. But the plan upset female MEPs, prompting European Parliament President Martin Schulz to pressure organizers to drop him.

French MEP Sandrine Belier said that given the circumstances it would have been "uncomfortable" to have Strauss-Kahn appear.

Earlier in March he had to be bundled into the back of a police car after addressing an event at Britain's Cambridge University to escape a protest by women's' rights activists.

Investigators could drop all pursuit of Strauss-Kahn or place him under formal investigation on suspicion of complicity in a pimping operation, or having benefited from misappropriated company funds, if he knowingly attended prostitute sessions paid for by his executive friends using expense accounts.

In February, Strauss-Kahn was held in police custody in Lille for two days for initial questioning, but he is unlikely to be detained in prison if placed under investigation due to the non-dangerous nature of the allegations.

His lawyer has said he had no reason to think women at the parties in question were prostitutes, noting it was not always easy to spot one when they are undressed.

On Wednesday, lawyers for Strauss-Kahn and the hotel maid accuser, Nafissatou Diallo, will wrangle over whether his former IMF position grants him diplomatic immunity from the civil suit.

Neither Strauss-Kahn nor Diallo are due to appear in court.

(Additional reporting by Robin Emmott in Brussels; Writing by Alexandria Sage and Catherine Bremer; Editing by Karolina Tagaris)

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