The Conservative party is investigating allegations from leadership hopeful Kevin O'Leary that one of his rivals is engaging in fraud and vote-rigging.

The celebrity businessman issued a statement Thursday accusing an unnamed campaign of trying to buy its way to the top by using untraceable prepaid credit cards to sign up fake members, which he said runs afoul of party rules and potentially the law.

"Beyond the legalities of this, it is completely immoral, and extremely unfair to the tens of thousands of real party members that will have the impact of their votes weakened," O'Leary said in a statement.

Two sources not connected to O'Leary told The Canadian Press it appeared the campaign of his main rival in the race, Maxime Bernier, is the one under scrutiny.

The alleged scheme involves people on the Ontario PC party membership list being signed up as members of the federal Conservative party, possibly without their knowledge.

Several people who are part of Bernier's campaign team were also involved in Patrick Brown's winning campaign for the Ontario PC leadership in 2015.

A source inside Bernier's campaign shot back at the rumours they were involved in the alleged fraud.

"If Kevin spent more time in Canada campaigning he would be winning instead of whining," the source said, speaking anonymously because they had not been authorized to provide an official response.

O'Leary has faced criticism for continuing to do events and interviews in the U.S. long after he launched his leadership bid officially in January.

He is currently on a cross-Canada tour, telling Conservative MPs earlier this month he planned to spend 24 days on the road in March, according to a leaked copy of a letter he circulated to the Conservative caucus and obtained by The Canadian Press.

He also told MPs he is signing up 700 new members a day.

The Conservative party reached out to the campaigns on Thursday to request their credit card logs and party spokesman Cory Hann said an investigation is underway.

Any memberships obtained contrary to party rules will be eliminated and those people will be ineligible to vote, Hann said in an email.

"Our rules are clear, any person looking to join our party must do so by paying the membership fee out of their own pocket, and we will ensure that principle is followed," he said.

Memberships cost $15 and party rules state they can only be purchased by credit card or cheque, a provision implemented specifically to avoid campaigns being able to use their own funds to sign up thousands of members, as had been the practice in the past.

The new system drew grumbling when it was unveiled, with some saying the fee — originally set at $25 — was still too high and the credit card process too cumbersome.

A couple of hours after the allegations surfaced Thursday, Bernier made a point of telling a would-be supporter on Twitter that his mother's credit card wasn't good enough to pay for a membership.

"You need to pay with your own card," Bernier told the man via Twitter.

Brad Trost, one of the 14 candidates in the race, called on O'Leary to provide proof of his allegations.

"If Mr. O'Leary has evidence to substantiate this hack he should make it public immediately," Trost said in a statement.

"If this is nothing but a publicity stunt, and Mr. O'Leary has no evidence then he should be sanctioned to the greatest extent possible by the party."

There are believed to currently be about 100,000 party members, with more to come as candidates have until Mar. 28 to sign up new ones for the leadership vote. That's scheduled to take place in May.

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