“The FBI, from the defense perspective, engaged in a series of actions, which if true, constitute outrageous governmental misconduct,” stated defense attorney David McLane in a court filing.

“The agents’ conduct went over the top by taking the defendants to clubs and supplying paid prostitutes, and inviting them to participate and paying for nightclub activities, and threatening them if they did not continue to engage with them.”

Grassley, the ranking member of the Senate Judiciary Committee, is concerned that the federal agents may have not only paid for the defendants to engage with prostitutes but engaged in sexual transactions themselves.

“A motion filed in the United States District Court for the Central District of California last week alleges that the undercover FBI agent spent thousands of taxpayer dollars on prostitutes in the Philippines for himself and three other individuals cooperating with the FBI,” stated Grassley in his letter to Mueller on Thursday.

“If true, this story raises serious questions about the behavior of this agent and the FBI’s knowledge of this matter.”

The FBI did not respond to a request for comment.

The government, however, vehemently denies that the undercover agent intentionally paid for prostitutes, while acknowledging that perhaps it might have footed a bill that unknowingly included prostitution charges, according to court documents.

“The undercover agent did not engage in prostitution, nor did he solicit prostitutes for himself or your clients,” stated trial attorney Margaret Vierbuchen with the Justice Department’s Organized Crime and Gang section, in a June discovery letter.

“If your clients elected to engage in prostitution at these clubs, it is possible that they shifted the cost of their acts to the undercover when he paid the bar bill, which did not list ‘prostitute’ as a line item.”

“The government has reason to believe that defendants ... may have done so. Additionally, the government does not have any bills or receipts from the clubs. However, the government is attempting to ascertain whether any purchases by the undercovers at such clubs when defendants were present were nonetheless recorded in a different form.”

But in light of the recent prostitution scandal in Colombia involving Secret Service agents, Grassley has asked Mueller to provide him with a full briefing that details the amount of money the undercover agent was reimbursed for the nightclub outings involved in the operation, and what the department has done to investigate the allegations that prostitutes may have been involved.

In an August letter, Assistant Attorney General Lanny Breuer provided the defense attorney representing the three suspects with an accounting of eight separate requests for reimbursements the agent made totaling $14,500 for “Entertainment & Cocktail (tips included)” covering costs incurred by 6-18 people at a time.

Grassley has requested a response by Oct. 15, 2012.