A 12-count indictment by Justice Department special counsel Robert Mueller alleges that former Trump campaign manager Paul Manafort laundered tens of millions of dollars in foreign payments to hide his "overseas wealth to enjoy a lavish lifestyle in the United States, without paying taxes on that income," according to the indictment.
The indictment, which also named Manafort's former deputy, Richard Gates, was brought as part of Mueller's ongoing probe into alleged Russian meddling in last year's campaign to try to help Trump win the election.
The charges may be intended to convince Manafort to provide additional information about the inner workings of the Trump campaign, according to Thomas Dupree Jr., a former deputy assistant attorney general.
"This is a classic situation where Mueller is now going to say to the defendants, 'Look, you need to cooperate because if you do we can get you a very favorable deal as far as sentencing goes and if you don't cooperate you'll be facing very serious prison time,'" he told MSNBC.
On Monday, both Manafort and Gates pleaded not guilty to the charges. A federal judge ordered home confinement for both defendants and set a $10 million unsecured bond for Manafort and a $5 million unsecured bond for Gates.
Prosecutors said Mueller's team has had a "difficult time" determining the value of Manafort's and Gates' assets.
The next status hearing in the cases was set for Thursday.
In detailing the alleged scheme, Mueller's office listed more than 200 transactions involving payments from shell companies and offshore accounts in Cyprus and the Grenadines to unnamed vendors in New York, Virginia, South Carolina, California and Florida.