Newshub can confirm the Serious Fraud Office (SFO) is opening a formal investigation into the New Zealand First Foundation donations scandal.
Last Monday, the Electoral Commission referred to police allegations the New Zealand First Party was hiding donations through the foundation. Police referred the case to the Serious Fraud Office.
The Electoral Commission found the Foundation received donations which should have been treated as party donations and they weren't properly declared.
The SFO acknowledged receipt of the referral last week, and on Tuesday confirmed to Newshub it is now opening an investigation.
It follows reports last year from Stuff that the New Zealand First Foundation was a slush fund which received more than half-a-million-dollars in donations.
Money was allegedly spent on party expenses like the party HQ, hiring boxer Joseph Parker for a party conference and legal advice for an MP.
Peters has repeatedly denied the claims labelling them "fake news" and "filthy allegations without any proof".
The Serious Fraud Office is a law enforcement agency which investigates fraud and corruption.
It's the second political scandal to be brought before the SFO this year. It laid charges against four people in relation to two $100,000 donations to the National Party.
Neither Simon Bridges nor National Party MPs or board members are among those charged.