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Paul Manafort and his former business associate were indicted on Monday on money laundering, tax and foreign lobbying charges, a significant escalation in a special counsel investigation that has cast a shadow over President Trump’s first year in office, APA reported citing The New York Times.

Mr. Manafort, the president’s former campaign chairman, and his longtime associate Rick Gates, surrendered to the FBI on Monday. The special counsel, Robert S. Mueller III, said Mr. Manafort laundered more than $18 million to buy properties and services.

“Manafort used his hidden overseas wealth to enjoy a lavish lifestyle in the United States without paying taxes on that income,” the indictment reads.

Mr. Gates is accused of transferring more than $3 million from offshore accounts. The two are also charged with making false statements.

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Paul Manafort has been indicted by federal prosecutors as the first allegation of a crime in the Russia investigation targeted a top figure in the President's campaign, according to Daily News.

Manafort, a longtime Republican operative who helmed the Trump campaign last summer, was charged of constructing an elaborate fraud scheme along with his business associate Rick Gates, according to the indictment unsealed Monday morning.

News of the charges from special prosecutor Robert Mueller late last week had prompted speculation that Manafort, who was reportedly told he would be indicted after a raid on his home this summer, was the target.

Charges in the indictment include conspiracy against the United States, conspiracy to launder money, failing to register as a foreign agent and failing to report foreign assets.

Local news captured a picture of Manafort leaving his home in Alexandria, Va., on Monday morning with his lawyer, later entering the FBI field office in Washington.

Prosecutors accused him and Gates, who also reportedly surrendered Monday, of making tens of millions of dollars from pro-Kremlin politicians in Ukraine and laundering it through a web of corporations and accounts in places such as Cyprus and the Seychelles.

Manafort was said to have used the money to fund a "lavish lifestyle" in the U.S. and buy homes that he put up as collateral for loans.

Mueller's indictment includes a long list of wire transfers made to American businesses from shady overseas ventures, including $5 million to a Hamptons home improvement company, more than $900,000 to a Virginia rug company and more than $800,000 to a men's clothing store in New York.

The alleged scheme stretched from 2008 to 2017, a time that includes Manafort's work for Trump in spring and summer 2016.

He and Gates were also accused of faiing to report their work for the Party of the Regions, whose leader Viktor Yanukovych fled amid violent protests in 2014 and plunged the Eastern European country into chaos.

Part of that alleged scheme included hiring companies to lobby American lawmakers on behalf of Yanukovych, but listing the work as for a Brussels-based non-profit called the European Center for a Modern Ukraine.

Manafort left the Trump campaign last August after reports about his time in Kiev, and belatedly registered as a foreign agent earlier this summer.

When contacted about the work by investigators last year, Manafort and Gates allegedly made false statements about his work with the Center.

Manafort has continuously denied wrongdoing as reports of his activities have surfaced. His spokesman Jason Maloni did not immediately respond to a request for comment from the Daily News.

Trump, for his part, has dismissed the entire Russia investigation as a "witch hunt" based on "fake news."

The indictment comes as a dramatic escalation in the probe, which Mueller has been spearheading alongside separate inquiries in Congress and the FBI.

Some have speculated that aggressive tactics against Manafort, whose Virginia home was raided in July, are part of an effort to "flip" the former campaign official and have him cooperate with prosectuors.

Ty Cobb, a lawyer for Trump, said that he is "not concerned" with information that Manafort can provide to the investigation.

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