Updated

Shocking voter fraud allegations are rocking the mayor's race in San Francisco. District Attorney George Gascon has launched an investigation and demands are growing for federal authorities to move in.

One campaign official fears the election could be stolen if nothing is done.

Supporters of incumbent Mayor Ed Lee, who is running for a full four-year term next month, are accused of illegally handling vote-by-mail ballots.

Witnesses say workers for the group, SF Neighbor Alliance, set up a makeshift sidewalk voting site in the city's Chinatown and accuse it of illegally casting absentee ballots for elderly Chinese voters.

The witnesses claim cell-phone videos show workers telling voters to vote for Lee, filling out ballots for the voters and even using a stencil to hide the names of rival candidates so the voters could only chose one -- Lee.

They also say that the completed ballots were stuffed in plastic bags, which is prohibited by state election law.

"At first we thought they were just helping them understand what absentee ballots were," witness Malana Moberg told Fox News, saying that she saw a worker filling out a voter's ballot.

But she said, "It was pretty blatant."

"I noticed that someone who was working at that booth, who had an Ed Lee shirt on, fill in an absentee ballot on behalf of the voter, and I was immediately shocked and couldn't believe that someone would actually fill in the ballot. I thought it was probably illegal, and if not at the very least, unethical," Moberg said, adding that "someone filling out a ballot for somebody else seemed completely inappropriate."

One of videos was shot by Adam Keigwin, a campaign official for State Sen. Leland Yee, one of Lee's opponents.

"Individuals were marking ballots for elderly voters. They would literally mark the ballot, seal it, and put it in bags behind them. There are so many violations there, almost too numerous to mention," he said.

Keigwin told us the alleged ballot stuffing happened right out in the open, for anyone to see.

"It is about our democracy and whether we are going to protect the integrity of the vote. I saw hundreds of voters come and drop off their ballots and have them filled out or being filled out with a stencil," he told Fox News. "That was just in a 45-minute period and that's just one incident that's happening. What else is happening out there? It's certainly potentially, in a very close election like what we're expecting on November 8th, this could end up being an election that is stolen."

In an unprecedented move, seven of Lee's opponents -- from the president of the city's Board of Supervisors to the city attorney -- jointly signed a letter demanding a federal investigation and the deployment of election monitors.

"Given their (the allegations') gravity, the importance of protecting voting rights, and assuring voter confidence in our electoral process, we believe federal observers and election monitors are immediately warranted," they wrote.

Lee has responded to the furor by saying he agrees that an investigation is warranted. He strongly denies any wrongdoing by his election operation.

"It has nothing to do with my campaign," he said.

Lee says SF Neighbors Alliance is not in any way affiliated with his campaign, and he has called what happened, "moronic."

"They shouldn't handle other people's ballots," the mayor told reporters. "It should be the individual who is voting, who has that chance to vote for him or her as to who their choice is. That is a sacred, sacred right to do. They should never be intimidated to vote for anybody. It should be something that is cleanly done by the individual themselves, and if there is anyone out there who thinks they represent me, or any other candidate, they should cease and desist."

The U.S. Attorney's office in San Francisco is reviewing the case. But John Arntz, the director of the San Francisco City and County Department of Elections, has said that he doesn't think there is a clear cut case of voter fraud because, among other reasons, the site was not a sanctioned polling place involving election workers.

"There's nothing that I saw that is a clear violation of the election code. I mean, on its face, it doesn't look real good," Arntz said.

As for the SF Neighbor Alliance, its spokesman previously told the San Francisco Chronicle that the group was only doing voter outreach and education. The spokesman has not returned Fox News' calls for comment.

Moberg says she remains troubled by what she witnessed.

"I think it's one person one vote," she said. "I think it's a very critical part of our democracy. I think voting is where democracy comes together and that's where the rubber hits the road. And if you have any sign of impropriety in the voting process, I just think that makes the whole thing stink."

If you suspect voter fraud or voter and election problems where you live, e-mail us at: Voterfraud@FoxNews.com.