Former Deputy Premier and Member for Oxley Andrew Stoner was targeted in a global extortion attempt before he left public office.
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The ex-Nationals leader cited personal reasons when he left the NSW ministry last October.
He later told police he fell victim to a blackmail attempt through social media site Linkedin.
It is understood Mr Stoner was targeted by a scam based in west Africa that has netted multiple high profile people.
The extortionist demanded money from Mr Stoner and he reported his experience to NSW Police.
It is understood to be one of several similar cases the Robbery and Serious Crime Squad is investigating.
The Nationals MP, who held several portfolios - including trade, investment and tourism, stepped down from the ministry last October and left politics at the March poll.
Stoner cited wanting to spend more time at home with his family as the reason for leaving politics.
"After talking with my family, I made this decision in order to allow me to spend more time at home in the immediate future whilst enabling the new Leader of the NSW Nationals to stamp his own personal brand on the party," he said at the time.
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One police source has told the Herald the scam was "quite an extensive fraud" attempt and involved a number of politicians, counsellors and teachers.
However the amount of money actually lost by victims remained unclear.
NSW police have carried out an investigation, but nobody has been charged.
Mr Stoner has been contacted for comment.
A NSW police spokesman said it would be "inappropriate to comment" about the investigation.
