Federal agents have raided the home of Baltimore Mayor Catherine Pugh amid uproar over lucrative business deals for her self-published children’s book.
FBI and tax agents also searched city hall and a training centre associated with Ms Pugh on Thursday.
The Democrat earned hundreds of thousands of dollars through sales of Healthy Holly books to city entities.
She has been on a leave of absence since 1 April. Baltimore City Council this month called on her to resign.
The FBI confirmed to CBS News, the BBC’s US affiliate, that it is working with the Internal Revenue Service (IRS), America’s tax-collection agency, on the inquiry into Ms Pugh’s book sales.
Official sources say the mayor’s deals for Healthy Holly books – which promote healthy eating and exercise – are part of the inquiry, but there is “more to the picture”.
Ms Pugh received $500,000 (£388,000) from the University of Maryland Medical System (UMMS) for 100,000 copies of the books that would go to schools while she was on the hospital system’s board, the Baltimore Sun reported.
Kaiser Permanente, another health provider, later revealed it paid over $100,000 for 20,000 copies of the books while it was negotiating a contract to become the medical insurance provider for Baltimore city employees.
Ms Pugh has called the book deal with the university medical system “a regrettable mistake”. She has since resigned from the board and the university has hired an independent auditor to review the case, local media say.
“I apologize that I have done something to upset the people of Baltimore,” she told reporters at City Hall in March.
The mayor added that she had returned a $100,000 payment from the UMMS for Healthy Holly books that had not yet been delivered.
Maryland’s Republican Governor Larry Hogan requested the state prosecutor’s office to begin the investigation the same day Ms Pugh took her leave, citing a bout of pneumonia.
Mr Hogan called the book sales “deeply disturbing allegations” in his letter to state prosecutor Emmet Davitt.
“I am particularly concerned about the UMMS sale because it has significant continuing ties with the State and receives very substantial public funding.”
The Baltimore Ethics Board and Inspector General are also conducting inquiries into Ms Pugh.
Ms Pugh became the city’s mayor in 2016. She has held public office since 1999, staring her political career with the Baltimore City Council, then moving to the state General Assembly, and the state Senate in 2005.
Her staff have insisted to local media that she will be returning to her role after recovering from her illness.
Currently, a Baltimore council member, Bernard Young, is serving as acting mayor during Ms Pugh’s leave of absence.