Michael Flynn, the former National Security Advisor to US President Donald Trump, has pleaded guilty to a charge of making false statements to the FBI brought by the special counsel investigating possible Russian ties with Trump's presidential campaign.
Flynn pleaded guilty in a hearing before US District Judge Rudolph Contreras. Court documents filed by the special counsel said that Flynn "willfully and knowingly" made "materially false, fictitious, and fraudulent statements and representations".
Flynn is now reportedly prepared to testify against his former boss as part of the FBI investigation into Russian attempts to influence the outcome of the 2016 presidential race.
The news sent shock waves through US financial markets with the stock market diving by more than 1% and the dollar also falling dramatically.
As part of the plea deal, Flynn is understood to have said that his actions were directed by a senior member of Trump's transition team - that member has not been publically identified but could mean other administration officials misled authorities.
The documents said that Flynn lied about conversations with the Russian ambassador at the time, Sergei Kislyak. Revelations about the phone calls ended with Flynn's unceremonious resignation in February, less than a month after taking his post as National Security Advisor.
Flynn's new cooperation with the special counsel investigation is somewhat expected after he cut ties with the White House's lawyers last week. The split from the White House suggested to many that Flynn was about to start coorperating with the independent investigation headed by Robert Mueller.
The US continues to reel as further information comes out about apparent attempts by Russia to influence the recent presidential election and sow discord within America though fake social media accounts. At a time when tensions were hightened between the US and Russia, Flynn was asked about whether he discussed sanctions against the country with the ambassador before he took office.
Flynn repeatedly denied that his conversations had included discussion of the sanctions and reportedly made the denials to other senior members of the administration - who then publically defended him.
A report from the Washington Post then said that Flynn has indeed discussed sanctions, reportedly causing rifts with senior colleagues who had defended him. In his resignation letter on 13 February, Flynn wrote that "because of the fast pace of events, I inadvertently briefed the Vice President Elect and others with incomplete information regarding my phone calls with the Russian ambassador."