Published: 07:00, 20 March 2015
Ukip candidate Janice Atkinson will face a disciplinary hearing on Monday following allegations of a "serious financial nature".
It comes as further details emerged after she was suspended from the party - and police launched a fraud investigation.
Nigel Farage told KentOnline the allegations relate to an incident at the Ukip Spring Conference in Margate earlier this year.
But the Sun newspaper today claimed it secretly filmed a member of Atkinson’s staff “apparently plotting to make a substantial bogus expenses claim”.
The claim is alleged to relate to a lunch costing £950 at The Hoy bar and restaurant attended by a number of senior Ukip figures during the party’s spring conference in Margate.
The Sun claims it filmed a staff member of Atkinson’s asking for an invoice for £3,150 at the restaurant the next day.
It said it had passed on details of the incident to Kent Police.
Police today confirmed the Kent and Essex Serious Crime Directorate had received a report of fraud.
A statement said the allegation was being reviewed and the investigation was ongoing.
Manager of The Hoy David Goulding said: "It was a pre-arranged fringe meeting for ladies attending the Ukip conference at the Winter Gardens.
"They booked in January and Christina Hewitt, secretary for Janice Atkinson met me here and we arranged the function.
"We talked about prices and exchanged regular emails asking for confirmations.
"But while I was away in the second week of February I got an email asking me to increase the prices and the address of whom they would like me to invoice.
"We treat these things very seriously so we have acted quickly - some may harshly - so we will have to wait and see" - Nigel Farage
"It seemed strange because the invoice was made out to a European Parliament address - the IDDE Group.
"This fictitious invoice for expenses was at the taxpayers cost and so I didn't agree with it and told The Sun newspaper.
"I'll be very surprised if Janice Atkinson as an MEP had no knowledge of her expenditure - it is very difficult to think she wouldn't have known.
"This is another example of disappointment in government and in this case at a local level.
"Just 40-odd days from the election it's quite likely that a number of MPs may make up Parliament from Ukip and therefore some of them will be looking after the finances within this country."
Nigel Farage told KentOnline: "There is quite a serious allegation that a receipt that was submitted was not all it should have been.
"We treat these things very seriously so we have acted quickly - some may say harshly - so we will have to wait and see."
Ms Atkinson had been due to appear at the Folkestone and Hythe Ukip branch's AGM at The Grand in Folkestone last night.
But she sent a text saying she would be unable to attend earlier in the afternoon.
Mr Farage added: "I've had so many difficulties over the years with people but one thing I've learnt is no party has a monopoly on people who do things wrong - not that I'm pre-judging this case.
"It's as much about how you deal with it and we have shown we deal with this kind of thing very quickly."
Mr Farage called into doubt Mrs Atkinson's position as the party's candidate for Folkestone and Hythe in light of her suspension, but said the party "would have to wait and see."
Mrs Atkinson has had the party whip removed while investigations continue.
A Ukip party spokesman said the party was "incredibly disappointed with Ms Atkinson, who appears to have exercised extremely poor judgment".
He added: "The party has acted swiftly and immediately and, just as we showed when we suspended another MEP for financial irregularities, we always maintain a zero-tolerance attitude towards acts of this nature.”
Stig Abell, managing editor of The Sun, tweeted that the suspension followed an investigation by the newspaper.
The Sun reported that it had secretly filmed a member of her staff plotting to make a 'substantial bogus expenses claim.'
Atkinson has courted controversy in the past, most recently when she referred to a Thai constituent as "a ting tong from somewhere."
The offensive comments about Fa Munday, a mobile food seller from Ramsgate, were picked up by a BBC South East microphone.
Mrs Munday's husband Vince, who had been a Ukip member, described the insult as 'outrageous, rude and offensive.'
In December it was reported that she owed her ex-husband more than £2,000 in child support.