Umberto Bossi
Umberto Bossi, leader of Italy's separatist Northern League, resigned on Thursday. Reuters

Italian prosecutors have launched an investigation into Umberto Bossi, founder of the Northern League political party, after accusations he and his two sons diverted public funds for personal use.

Prosecutors in Milan said in a statement on Wednesday that Bossi was being investigated for suspected fraud, while his sons Renzo and Riccardo were being investigated for alleged embezzlement.

Bossi, a key ally of former Prime Minister Silvio Berlusconi, resigned from the party he founded last month after allegations emerged that he used party funds given by the state for electoral campaigns to renovate his house and pay for his sons' holidays and cars, according to Reuters.

In Italy, taxpayers fund political parties.

According to the Wall Street Journal, Bossi allegedly signed off on Northern League expense statements that hid the use of party funds by his two sons for gasoline and private meals.

The Bossi probe is part of a wide-ranging investigation into the Northern League's finances, which has been in progress for several months.

The League had risen to prominence with a reputation built on attacking government corruption.

But in April police issued a warrant stating that party treasurer Francesco Belsito used public money to support the expenses of the Bossi family -- and Northern League money was allegedly used to pay for Bossi's medical treatment in 2003, according to Agenzia Giornalistica Italia.

Although he no longer heads the party, the outspoken Bossi -- known for his salty language and disdain for Italy's political establishment -- has stayed on as party chairman.