NEW YORK—A week after Shepard Fairey was revealed to be the last artist scheduled to show in dealer-turned-museum director Jeffrey Deitch's Wooster Street gallery, the news headlines about him have returned to the realm of court battles and copyright infringement.

"Hope" poster artist Shepard Fairey's legal battle with the Associated Press over his use of its Obama photo has higher stakes than previously known, according to new reports that the street artist is also the target of a criminal inquiry. Court records from yesterday's hearing of the copyright infringement suit show that Fairey is under investigation by the U.S. Attorney's Office, and the AP has acknowledged in a statement that it had received a grand jury subpoena relating to the artist's "alleged misconduct" at the heart of the probe.

The likely cause of the criminal investigation arose last October, when Fairey confessed to the court that he had erased some evidence central to the copyright case and fabricated other evidence to make it appear he had used a different Obama photo than the AP's as the basis of his famous poster. In revealing his wrongdoing last fall, Fairey said: “I sincerely apologize for my lapse in judgment, and I take full responsibility for my actions, which were mine alone."

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