An indictment by a grand jury in New York accuses Montgomery, his former track coach, Steven Riddick, and 12 other people of being involved in a conspiracy that deposited $5 million US in stolen, altered or counterfeit cheques during a three-year period.
Montgomery is accused of depositing three bogus checks totalling $775,000. He allegedly received $20,000 for his participation in the scheme, prosecutors said.
The indictment alleges that a portion of the money was funnelled through a coffee businesses owned by a New York couple.
U.S. sprinter Tim Montgomery faces fraud charges. (Associated Press)
Montgomery surrendered to U.S. Immigration and Customs Enforcement agents in Norfolk, Va., on Friday morning.
The past five months have been a turbulent time for the former star sprinter.
Last December, the 31-year-old was slapped with a two-year ban on competing in track and field by the court of arbitration for sport. The CAS ruled that Montgomery was guilty of doping, based on evidence gathered in the criminal investigation of BALCO, the lab at the centre of a steroid scandal in sports.
After the ban was announced, Montgomery retired even though he never tested positive for drugs and maintained that he never knowingly took steroids or any other banned substances.
As a result of the ban, all of Montgomery's performances after March 31, 2001, were eliminated from the record books, including his world record mark of 9.78 seconds in the 100-metre dash, set in 2002.
He was also stripped of the gold medal in the 4x100-metre relay that he won at the 2000 Sydney Olympics.
With files from Associated Press
