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Michael was arrested shortly before 5 p.m. Tuesday outside Will Rogers Park after an undercover officer on a crime suppression detail allegedly saw him engaging in a lewd act, Lieut. Edward Kreins told a news conference.
"I can't go into details of the lewd act," Kreins said. The singer was alone at the time, he added.
The British-born Michael gave police his real name, Georgios Kyriacos Panayiotou, and then supplied his stage name when asked if he used any other names, Kreins said.
The arresting officer did not recognize the pop star, who identified himself as a singer when asked his occupation at the station, Kreins said.
Michael, 34, was booked for investigation of misdemeanor lewd conduct and released after posting $500 bail. He was scheduled for arraignment in Municipal Court on May 5.
The area of the park had been the subject of other complaints of lewd conduct in the past, police said without elaborating.
A call left for Andy Stevens, Michael's manager in London, was not immediately returned. His publicity agency, Connie Filippello Publicity in London, declined comment.
Michael was one of the Princess of Wales's favorite singers and attended her funeral in September.
In the 1980s, Michael shot to stardom with Andrew Ridgeley as the duo Wham!, whose hits included Wake Me Up Before You Go-Go and Careless Whisper.
Wham! split up in 1986 and Michael went solo with his first album, Faith, which sold more than 10 million copies. The single, I Want Your Sex, was banned by many radio stations.