The head of victims' group Families Acting for Innocent Relatives has been questioned by police as he stood outside a house.
O'Hare was once the Irish Republic's most wanted man
Willie Frazer claimed former INLA leader Dessie O'Hare was staying at the house near Newtownhamilton in south Armagh on Saturday.
However, the police said nobody at the address "was wanted for questioning".
O'Hare was released under the Good Friday Agreement after serving part of a 40-year sentence for kidnapping.
He was recently granted extended temporary release by the Irish Republic's prison service.
O'Hare, originally from County Armagh, was convicted for kidnapping and mutilating the Dublin dentist, John O'Grady, in 1988.
He chopped off bits of two of the dentist's fingers with a chisel, because a ransom demand had not been paid.
Irish police managed to free Mr O'Grady, but O'Hare escaped before eventually being recaptured after a shoot-out in County Kilkenny.
O'Hare was sent to the high security Portlaoise prison but was later moved to the more relaxed Castlerea jail.
He took a High Court action and was declared a qualifying prisoner under the terms of the Good Friday Agreement.
He has previously been released for short periods.