WASHINGTON, D.C. – Rapper Prakazrel Michel one of the founding members of the hip-hop group the Fugees and a fugitive Malaysian financier have been charged with conspiring to violate federal campaign finance law by funneling millions of dollars worth of foreign money into Obama’s 2012 presidential election campaign, the Justice Department said Friday.
A four-count indictment accuses the financier, Low Taek Jho, of transferring more than $21 million from overseas to the rapper Prakazrel Michel, known as Pras, from June 2012 through that November. Prosecutors contend that Mr. Michel then gave $865,000 of that money to a network of straw donors who used it to make campaign contributions to a candidate identified as Candidate “A” former President Barack Obama.
While the indictment unsealed on Friday does not specifically name the candidate in question — who is accused of no wrongdoing — it clearly refers to former President Barack Obama. The indictment includes allusions to Candidate “A” having a presidential administration and hosting an event at the White House that Mr. Low either “attended or arranged for his associates to attend.”
A spokesman for Mr. Obama did not respond to a message seeking comment on Friday.
The indictment adds to a list of legal troubles for Mr. Low, also known as Jho Low. He has been wanted by law enforcement in the United States and Malaysia for his alleged role in the theft of $4.5 billion from a Malaysian sovereign wealth fund. That case contributed to the electoral defeat and eventual indictment of the country’s former prime minister, Najib Razak.
Mr. Michel and Mr. Low have both been charged with violations of campaign finance law and conspiracy to defraud the United States government. Mr. Michel has additionally been charged with concealing material facts and lying in connection with the conspiracy.
Mr. Michel pleaded not guilty on Friday before Magistrate Judge G. Michael Harvey of United States District Court for the District of Columbia, said Barry J. Pollack, his lawyer. He was not detained.
“Mr. Michel is extremely disappointed that so many years after the fact the government would bring charges related to 2012 campaign contributions,” Mr. Pollack said. “Mr. Michel is innocent of these charges and looks forward to having the case heard by a jury.”
The Justice Department said on Friday that Mr. Low remained at large. A spokeswoman for Mr. Low, who declined to provide his whereabouts, denied the charges filed on Friday.
“The allegations against Mr. Low have no basis in fact,” the spokeswoman said in a statement. “Mr. Low has never made any campaign contributions directly or indirectly in the U.S. and he unequivocally denies any involvement in or knowledge of the alleged activities.”
Prosecutors allege that Mr. Michel used checks, direct deposits and cash payments to send Mr. Low’s money to the network of roughly 20 straw donors that he recruited to make the donations.
Mr. Michel tried to cover his tracks by falsely claiming that the payments were remuneration for business deals or gifts, prosecutors said. They said he also used more than $1 million of Mr. Low’s money to make a large donation to an independent expenditure committee in his name and in the name of a company owned by Mr. Michel.
The indictment accuses Mr. Michel and Mr. Low of concealing the scheme from the candidate, his campaign and administration, and federal regulators. But prosecutors also said the two hoped their largess would buy them political influence, in part by making Mr. Michel look important.
The indictment alleges that Mr. Michel attended at least two events with the candidate in June and September 2012. In September, Mr. Michel took two of the straw donors and Mr. Low’s father to a fund-raiser at a private home in Washington, where they met the candidate and took pictures with him.
The indictment alleges that Mr. Michel made false statements to the Federal Election Commission that claimed that he was the source of the money used in the $1 million donation. Prosecutors said his alleged deception also caused others to make false statements to the F.E.C., including a presidential joint fund-raising committee and the committee that received the $1 million donation.
Law enforcement officials in Malaysia and the United States have described Mr. Low as an important player in the alleged theft of approximately $4.5 billion from 1Malaysia Development Berhad, a state-owned development company.
The scandal contributed to the electoral defeat of the former prime minister, Mr. Najib, last May. Mr. Najib was discovered to have $731 million of the pilfered funds in his own bank accounts and now faces dozens of charges in connection with the alleged theft. He went on trial last month in the first of several corruption cases.
Last November, Mr. Low and two former Goldman Sachs bankers, Roger Ng and Tim Leissner, were indicted in the Eastern District of New York on charges of conspiring to launder billions of dollars and to violate the Foreign Corrupt Practices Act, the Justice Department said.
Mr. Ng, who had been in custody in Malaysia, was extradited to the United States and pleaded not guilty last week. Mr. Leissner, his former boss, pleaded guilty to money laundering and foreign bribery charges last August. Mr. Low has denied the allegations made in that case.
By Sarah N. Lynch, Nathan Layne