(CNN) -- A representative for Natalee Holloway's mother who paid $25,000 for information on the whereabouts of her remains last month was an undercover FBI agent, a federal law enforcement official told CNN. 
 
 However, the FBI and the U.S. attorney's office in Birmingham, Alabama, said Wednesday that the FBI did not supply the money. 
 
 "Some news accounts have suggested that the FBI provided $25,000 in funds that were transmitted to van der Sloot. This is incorrect. The funds involved were private funds," the FBI and U.S. attorney's office said in a statement. 
 
 An Interpol document says van der Sloot faces criminal charges in Alabama because he allegedly tried to extort money from Holloway's mother. U.S. authorities filed extortion and wire fraud charges against van der Sloot this week. 
 
 The FBI and U.S. attorney's office in Birmingham arranged for a meeting where van der Sloot was paid $10,000 in cash and another $15,000 in a wire transfer for information van der Sloot allegedly promised would lead to Holloway's body in Aruba, a source familiar with the case said. The meeting took place in May, according to the U.S. attorney's office in Birmingham. 
 
 Interpol documents show that the $15,000 was transferred to a personal bank account in the Netherlands. The information van der Sloot provided to the FBI was not true, according to the documents. 
 
 It's unclear if that money funded van der Sloot's trip to Colombia and into Peru, where authorities said he confessed this week to killing 21-year-old Stephany Flores Ramirez. 
 
 Members of Flores' family told CNN they knew days ago that the FBI had paid van der Sloot. 
 
 "We really don't have anything to say about it or what could have happened if we knew this information," said brother Enrique Flores, speaking by phone from Peru. 
 
 "It won't make any change today. Her mom is praying every day. We are not having contact with a lot of people. We want to be left alone." 
 
 Although the investigation involving alleged extortion had been in motion for several weeks at the time of Flores' death, "it was not sufficiently developed to bring charges prior to the time van der Sloot left Aruba," the FBI statement said. 
 
 "This is not due to any fault on the part of the FBI or the U.S. attorney's office, where agents and prosecutors were working as hard as possible to bring the case to fruition when they learned of the murder. A case based on events outside of the United States is a complex matter, and work was proceeding with all deliberate speed to prepare the evidence, the charges and the necessary procedures to obtain custody of van der Sloot," the statement said. 
 
 Van der Sloot, a Dutch citizen, was twice arrested in connection with the 2005 disappearance of Holloway but was released for lack of evidence. 
 
 This week Alabama authorities filed extortion and wire fraud charges against van der Sloot. 
 
 On or about March 29, van der Sloot contacted a representative of Holloway's mother, Beth Holloway, say Intepol documents. 
 
 That came as a shock to Natalee Holloway's father Dave Holloway. 
 
 CNN spoke with his attorney Vinda de Sousa in Aruba Wednesday. 
 
 "He didn't know about it ... and he just didn't have very much to say about it because he was not involved," the attorney said. 
 
 In exchange for payment, van der Sloot showed a person -- described in Interpol documents as Beth Holloway's representative -- a house in Aruba where supposedly Holloway's remains were located. 
 
 When records showed that the house wasn't even built at the time of her disappearance, van der Sloot admitted he lied, Interpol said. 
 
 Aruban authorities were involved in the FBI's undercover investigation, Aruban government spokesman Taco Stein said. 
 
 "We did some technical work" and "worked together," Stein said. 
 
 CNN's Terry Frieden, Kim Segal and Ashley Fantz contributed to this report. ||||| The FBI denied today suggestions that it moved too slowly after monitoring alleged extortion payments to murder suspect Joran van der Sloot, allowing him to travel to Peru where he admits he killed a woman he met in a casino. 
 
 The Dutch playboy has confessed to the May 30 murder of Stephany Flores Ramirez. 
 
 The attack on Flores came nearly three weeks after the FBI admits that it monitored payments to van der Sloot in what it says was an attempt to extort $250,000 from someone in Mountain Brook, Ala., the hometown of missing high school girl Natalee Holloway. 
 
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 Family members have told ABC News that the target of the alleged extortion plot was Holloway's mother, Beth Twitty. 
 
 The FBI's Birmingham office has said that it was leading an investigation on May 10 when $15,000 was wired to a Dutch bank for van der Sloot. The money, the FBI said, was supposed to be in exchange for information about what happened to Holloway and the location of her body. 
 
 News reports state that van der Sloot was also given $10,000 in cash, and that he was caught on tape counting the cash. 
 
 Fox News correspondent Greta Van Susteren said today on "Good Morning America" that the FBI's failure to arrest van der Sloot was "a blunder." 
 
 Van Susteren called the chain of events a "huge embarrassment" for U.S. authorities. "I don't know why they didn't arrest him and I'm sure the FBI feels horrible about what happened," she said. 
 
 The FBI issued a statement today rejecting any suggestion that it allowed van der Sloot to slip away and kill Flores several weeks later. 
 
 "News accounts have also questioned why charges were not brought earlier, so that the tragic death of Stephany Flores could have been avoided," the statement said. "The Birmingham investigation was not related in any way to the murder in Peru. Despite having been in motion for several weeks at the time of Miss Flores' death, it was not sufficiently developed to bring charges prior to the time van der Sloot left Aruba." 
 
 The lack of an arrest in the extortion case, it said, "is not due to any fault on the part of the FBI or the U.S. Attorney's Office." 
 
 "A case based on events outside of the United States is a complex matter, and work was proceeding with all deliberate speed to prepare the evidence, the charges and the necessary procedures to obtain custody of van der Sloot," the statement said. 
 
 Peru Cops Looking for Links to Natalee Holloway 
 
 The FBI also said that reports that the feds provided the money to van der Sloot were inaccurate, saying, "The funds involved were private funds." 
 
 The statement today was similar to comments made to ABCNews.com last week when Peggy Sanford, spokeswoman for the U.S. Attorney's Office in Birmingham, said they didn't have sufficient evidence at the time to issue a warrant for van der Sloot's arrest. 
 
 "It was a complete coincidence and tragedy that the other woman was murdered," Sanford said. 
 
 Van der Sloot is being held in a Lima jail for the alleged murder of Flores Ramirez, 21. The two met while gambling and drinking at a Lima casino, officials said. Police believe she was killed May 30, the five-year anniversary of Holloway's disappearance in Aruba. 
 
 Flores' battered body was found three days later, her neck broken. Van der Sloot, who had crossed the border into Chile, was nabbed there and extradited back to Peru. 
 
 In Peru, investigators are leaning on van der Sloot to give them information about Holloway's 2005 disappearance in Aruba during a school trip. He has been arrested twice in Aruba and remains the prime suspect, but has never been charged. 
 
 Master hackers hired by Peruvian authorities to examine his laptop have reportedly found pictures and other information relating to Holloway. 
 
 Investigators in Lima are also pressuring van der Sloot to take them to the hotel where Flores was killed to retrace his steps. 
 
 Police investigators told Lima's La Republica newspaper that van der Sloot's bombshell confession came late Monday night when he tearfully admitted that he grabbed Flores by the neck when she began reading articles about him on the Internet. 
 
 "I did not want to do it. The girl intruded into my private life," he told investigators, according to La Republica. "She had no right." 
 
 "I confronted her," he continued. "She was frightened, we argued and she wanted to get away. I grabbed her by the neck and I hit her." 
 
 Van der Sloot to Take Investigators to Scene of the Crime 
 
 Dave Holloway, Natalee Holloway's father, told "Good Morning America" Tuesday that search teams had been assembled in Aruba in case Peruvian investigators are able to glean any more information about the teenager's disappearance. 
 
 "He's confessed to this one," Holloway said of Flores' death, "and I'd like for him to tell everyone what happened." 
 
 Holloway said he's been closely following the Flores case, calling it "deja vu." 
 
 "I would just like to say that you know all the pain and suffering that we've gone through, hopefully justice is served this time," he said. 
 
 Peruvian authorities have been careful to document every step of their investigation, videotaping every move including a search of his belongings. 
 
 Flores' father, Peruvian politician and race car driver Ricardo Flores, told ABC News that van der Sloot's laptop "contains valuable information that may lead to more of Joran's victims." 
 
 "I think he killed many others," he said. 
 
 Prior to van der Sloot's reported confession, Peruvian authorities released videos of his interrogation and from the hotel where he brought Flores after a night of drinking and gambling. 
 
 In the video of his interrogation, van der Sloot can be seen calmly explaining where he's been and what he's carrying, including a laptop, cash from different countries and photos. He even seemed friendly with the officers on his long drive back from Chile to Lima. 
 
 When investigators asked him where his credit cards were, van der Sloot answered in broken Spanish. 
 
 "I have those back in my hotel in Santiago," he said on the video. "I went up to my hotel room and I saw these things on the Internet and I had to leave quickly." 
 
 The calm demeanor van der Sloot showed on the video was a stark contrast to the stunned, even frightened look on his face as he was paraded in front of a media frenzy upon his return to Lima. 
 
 On the hotel surveillance video, released this week, van der Sloot can be seen getting his room key from the front desk. Police said they believe Flores was walking behind him, her back to the camera. 
 
 Moments later another camera upstairs captured the two walking into van der Sloot's room. 
 
 Van der Sloot was captured on camera leaving the hotel alone four hours later, wearing a different shirt and carrying a bag and a backpack. 
 
 Though the hotel management declined to comment on why it took three days to discover Flores, sources told ABC News that van der Sloot had pre-paid for a two-week stay and demanded that no one enter his room.
– FBI officials yesterday denied they bungled a case against Joran Van der Sloot after paying him up to $25,000, which he apparently used to travel to Peru where he murdered a young woman. Investigators set up an extortion sting for Van der Sloot last month after he reportedly demanded cash from Natalee Holloway's mom in exchange for information about her daughter's remains in Aruba, where he remains a prime suspect in the teen's disappearance. Officials issued an arrest warrant on extortion charges against him shortly after Van der Sloot admitted killing Stephany Flores Ramirez, 21, in his hotel room, notes ABC News. "The Birmingham investigation was not related to the murder in Peru," said an FBI statement. "Despite having been in motion for several weeks at the time of Miss Flores' death, it was not sufficiently developed to bring charges prior to the time van der Sloot left Aruba." Officials also said cash paid to Van der Sloot came from "private funds," contradicting reports that the fee came from the FBI. CNN reported earlier yesterday that the money—$10,00 in cash and $15,000 paid to Van der Sloot's Dutch bank account—was provided by Natalee's mom, Beth Twitty Holloway.