Chemnitz's CEO Thomas Uhlig resigned on Sunday over the scandal — and on Monday the club sacked a member of the communications department and the stadium announcer.
A political storm was whipped up in Saxony state before Saturday's 4-4 draw at home to Altglienicke when Chemnitz fans paid tribute before kick-off to Thomas Haller, a leading figure in eastern Germany's far-right scene.
Haller reportedly took part in racist riots that rocked the city last year following the fatal stabbing of a German man, allegedly by immigrant men.
Haller had for years provided security for the club and co-founded the “HooNaRa” (Hooligans-Nazis-Racists) group in the 1990s that was disbanded in 2007, local broadcaster MDR reported.
Before Saturday's match, a picture of Haller was displayed on a video screen at the stadium, there was a minute's silence and banners — one saying “Rest in peace Tommy — were rolled out, while Haller was praised in a speech.
Klaus Siemon, the club's administrator, said: “It must be clarified how this could have happened.”
Siemon claims some of the club's staff were threatened with violence, reportedly by supporters, unless the tribute took place.
“According to the relevant employees, there were threats of rioting,” said Siemon.
“This circumstance justifies at least the initial suspicion of a serious coercion and we have informed the authorities.”
The club has since learned “that relevant well-known figures from the right-wing extremist scene travelled from other cities to Chemnitz” to pay tribute to Haller before Saturday's match.
Chemnitz has also fined striker Daniel Frahn, who held up a T-shirt with a logo that is popular amongst neo-Nazis during the match but later apologized.
“I was not aware that this T-shirt was so widely used in the Nazi scene,” said Frahn in a statement.
Germany's North-East Football Union have said they are investigating Chemnitzer FC and also third division side Energie Cottbus, whose fans waved a flag which also bore the text “Rest in Peace, Tommy” during Saturday's home match.