The president’s ex-lawyer, Michael Cohen, pleads guilty to several charges as he admits trying to influence the US election.
Donald Trump’s former lawyer says he and the president arranged hush money payments to influence the election.
Michael Cohen, who was fired in May this year, agreed to plead guilty to one count of wilfully causing an unlawful corporate campaign contribution and one count of making an excessive campaign contribution.
These stem from payments made to porn actress Stormy Daniels and ex-Playboy model Karen McDougal, who both claim to have had affairs with Mr Trump.
Cohen said that he made the payments “at the direction” of a candidate for federal office. Mr Trump was not named in court but the dates and amounts detailed align with payments made to Daniels and McDougal in the months leading up to the presidential election.
Cohen said one payment was made “in co-ordination and at the direction of the candidate for federal office” and another was made “under the direction of the same candidate”.
He added that the money was paid “for the principal purpose of influencing the election”.
Deputy US attorney Robert Khuzami said invoices for the payments were made to Mr Trump’s company.
A top Democrat on the house intelligence committee has said Cohen’s guilty plea potentially implicates Mr Trump in illegal campaign finances.
Lanny Davis, a lawyer for Cohen, tweeted on Tuesday that “Donald Trump directed him (Cohen) to commit a crime by making payments to two women for the principal purpose of influencing the election”.
He added: “If those payments were a crime for Michael Cohen, then why wouldn’t they be a crime for Donald Trump?”
Cohen admitted other charges of tax fraud and making false statements to a financial institution.
The plea agreement raises the possibility that he will be required to provide information to special counsel Robert Mueller’s Russia probe.
CNN has reported that the plea deal includes prison time for the president’s long-time fixer, with Fox News suggesting he will be handed a three- to five-year jail term.
Cohen was part of Mr Trump’s inner circle for more than a decade, working as his personal lawyer at the Trump Organization and continuing to advise the president after the 2016 election.
His guilty plea has avoided a high-profile trial, but the deal could require him to co-operate with the probe into whether the Trump campaign colluded with Russia in its efforts to sway the 2016 US presidential election.
Cohen was seen leaving his apartment on Tuesday before travelling to the Manhattan offices of one of his lawyers, former federal prosecutor Guy Petrillo, and going into a building where the FBI has its New York offices.
The case has been a distraction for the White House with the mid-term elections approaching.
Prosecutors had been investigating Cohen for possible fraud related to his businesses for months.
The FBI raided his hotel room, home and office on 9 April, seizing more than four million items.
The April FBI raids provoked an immediate reaction from Mr Trump, who asked a judge to block prosecutors from reviewing the materials they had seized, citing attorney-client privilege.
The effort was unsuccessful.
Cohen first attracted national attention when Daniels, whose real name is Stephanie Clifford, said he paid her $130,000 shortly before the November 2016 election to keep quiet about an alleged 2006 sexual encounter with Mr Trump.
Under US election law, campaign contributions, defined as things of value given to a campaign in order to influence an election, must be disclosed.
A payment intended to silence allegations of an affair just before an election could constitute a campaign contribution, some experts have said.
A number of Cohen’s financial dealings since Mr Trump’s January 2017 inauguration have become public.
Swiss drugmaker Novartis AG has said it had paid Cohen nearly $1.2m (£930,000) in a consulting deal.