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Conservative leadership candidate Kevin O'Leary speaks at Queen's University, in Kingston, Ont., on March 16, 2017.Lars Hagberg/The Canadian Press

The Conservative Party is investigating allegations of what leadership candidate Kevin O'Leary is calling massive voter fraud by at least one of his leadership challengers.

Mr. O'Leary says his team has uncovered a large number of cases in the Toronto area where supporters of one of the challengers are using prepaid credit cards to sign up members based on an Ontario provincial party list, people who are unaware they are becoming members of the federal party.

"It has been brought to my campaign's attention that there are back-room organizers who are committing widespread vote rigging and potentially breaking our electoral and financial laws to buy a leadership victory," Mr. O'Leary said in a statement.

Party rules require memberships to be purchased with either personal cheques or personal credit cards.

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"However, we have been informed that to get around these rules, campaign activists are using untraceable prepaid credit cards to sign up fake members, possibly without these individuals even knowing about it," Mr. O'Leary said.

Neither Mr. O'Leary nor the Conservative Party would identify the leadership candidate's team accused of voter fraud, but sources say it allegedly involved Tamil Canadians from Toronto connected to the campaign of Maxime Bernier.

Late Thursday night, Conservative MP Tony Clement, who is a senior adviser to Mr. Bernier, said the campaign team was unaware of any such vote-rigging taking place.

"We made it clear that everybody in our campaign has to follow the rules. If something has gone amiss, if somebody is signed up without their knowledge they shouldn't be able to vote," Mr. Clement said. "It's a rule we all have to live with."

Mr. Clement also accused Mr. O'Leary of trying to smear Mr. Bernier, saying the reality TV star realizes that the Quebec MP has raised more money, sold more memberships and has a strong base of support in the leadership race.

"Mr. O'Leary has decided it's time to start throwing some mud. They are obviously trying to save their campaign," he said.

The Conservative Party released a statement to The Globe saying it was aware of the allegations and is investigating.

"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," party spokesman Cory Hann said. "Any membership obtained contrary to the rules will be struck from our membership list and ineligible to vote."

The allegations centre on membership lists that the Ontario Progressive Conservative Party gathered during its leadership race. Approximately 14,500 PC Tamils were signed up in Ontario.

It is alleged that several of Mr. Bernier's field organizers submitted mass lists of member names from the Ontario PC list without their knowledge. The organizers then buy prepaid credit cards and use them to submit one family for every credit card.

The Globe contacted one of the organizers accused of the activity but he hung up the phone.

"They are going to send their organizers out to these peoples' homes, collect the ballots, fill out the ballots on their behalf and then send them back to the party," O'Leary campaign spokesman Ari Laskin told The Globe.