Fredericks, a member of the International Olympic Committee (IOC) who won four silver medals at the 1992 and 1996 Games, is suspected of receiving bribes and laundering the money through Paris, the source said.
He appeared before a French magistrate late on Thursday.
Fredericks is already being investigated by the global Athletics Integrity Unit over payments he received from Papa Massata Diack, the son of former world athletics chief Lamine Diack, on the day Rio won the vote to host the 2016 Olympics.
"We have just been informed of the decision by the French judge," an IOC spokesperson said. "The CECO (Chief Ethics and Compliance Officer) will look into the file, which is not yet available, and report to the Ethics Commission, which is meeting on Monday."
"Like with any procedure, the right to be heard has to be respected."
Fredericks also sat on the IAAF Council, world athletics' governing body, until he was suspended in July pending the outcome of the Integrity Unit probe.
The athlete has previously rejected allegations of corruption, saying that a payment of $300,000 to his company was recompense for legitimate work.
The Integrity Unit on Friday confirmed that it was still investigating Fredericks and that he remained suspended.
Fredericks stepped down in March as head of the IOC team evaluating bids to host the 2024 Olympics, and from an IAAF task force investigating doping allegations in Russia.
Rio was awarded the games in 2009, beating Chicago, Tokyo and Madrid.
Last month, the IOC suspended the head of Brazil's national Olympic committee, Carlos Nuzman, after he was charged in Brazil with racketeering in connection with alleged vote buying to win the Games for Rio.
Nuzman is accused of arranging more than $2 million in bribes to get the IOC to pick Rio. He has denied any wrongdoing.
(Reporting by Emmanuel Jarry, Additional reporting by Kasrolos Grohmann; Writing by Richard Lough; Editing by Kevin Liffey)
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