An Iraqi judge says he has issued two arrest warrants for former Governing Council member Ahmed Chalabi and his nephew, Salem.
Ahmed Chalabi lost favour with the US over his links with Iran
Ahmed Chalabi is wanted on counterfeiting charges, Judge Zuhair al-Maliki said.
He said Salem Chalabi, the head of the tribunal trying Saddam Hussein, is sought on suspicion of murder.
Both men, who are out of the country, denied the charges and said they were politically motivated.
Ahmed Chalabi was once the Pentagon's favoured candidate to lead Iraq, but he fell from favour amid allegations of links to Iranian hardliners and concerns that he provided faulty intelligence in the run-up to the war.
He said he had not been informed directly, but had heard of the warrants through the media.
"I'm now mobilised on all fronts to rebuff all these
charges," he told CNN from the Iranian capital, Tehran.
Judge Maliki told Radio Sawa the warrant was issued against Ahmed
Chalabi in connection with counterfeiting money.
"He is the prime
suspect," he said.
"They should be arrested and then questioned and then we
will evaluate the evidence, and then if there is enough
evidence, they will be sent to trial," he added.
The Associated Press quoted the judge as saying that Ahmed Chalabi appeared to have been mixing the counterfeit
money with other old money and changing it into new dinars
in the street.
Police found the counterfeit money during a May raid on his house in Baghdad, the judge said.
He named Salem Chalabi as a suspect in the June murder of Haithem Fadhil, director
general of the finance ministry, the agency reported.
"It's a ridiculous charge,
that I threatened somebody... there's no proof there," Salem
Chalabi told CNN from London.
On Sunday, the interim Iraqi government restored the death penalty for crimes including murder.
Fall from grace
Analysts say the warrant is a new sign of Ahmed Chalabi's fall from the centre of power.
After decades in exile, Mr Chalabi was one of the first Iraqis to be flown by the Pentagon to Iraq during the 2003 invasion, supposedly to allow him to consolidate his political base in the country.
But the relationship soured during the occupation and jockeying for power that followed the US overthrow of Saddam Hussein.
In May, US troops and Iraqi police raided Mr Chalabi's home and the headquarters of his party, the Iraqi National Congress, in Baghdad.
American officials announced then that the monthly payment of more than $300,000 to the Iraqi National Congress was to be stopped.