Neither Obama nor his campaign team have been accused wrongdoing or of being aware of any of the alleged illegal activity.
In total, Michel is being charged with one count conspiracy, two counts of falsifying records and one count of making a false statement.
Low, also known as Jho Low, is a key figure in what is known as the 1MDB scandal, which has rocked Malaysian political and financial circles.
The indictment did not reveal the identity of the presidential candidate. According to the Justice Department, the money came in the country within a six-month window between June 2012 and November 2012.
Court documents claim that they aimed to "gain access" to one of the presidential candidates, named as "Candidate A". They say Michel then paid about 20 straw donors and conduits so they could make the donations in their names and hide where the money actually came from, according to the indictment.
CNN has reported that Pras Michel pleaded not guilty to the charges and planned to fight them in court.
It was instead treated like a massive slush fund by Jho Low, an adviser to Malaysia's then-prime minister, Najib Razak, U.S. prosecutors have said.
Michel and Low were each charged with one count of conspiracy to defraud the United States government and for making foreign and conduit campaign contributions.
Low, 37, was also charged in the case, adding to the existing indictments against the Malaysian businessman already wanted for conspiring to launder billions of dollars and violating the Foreign Corrupt Practices Act. A lawyer for Michel, Barry Pollack, says his client is innocent and looks forward to having the case heard by a jury.
According to the indictment, Michel and Low concealed their scheme from Obama and his campaign.
The charges against fugitive businessman Jho Taek Low and onetime Fugees member Prakazrel "Pras" Michel stem from a broad federal effort to track billions of dollars Low has already been accused of stealing from a Malaysian sovereign wealth fund - a portion of which has allegedly been used to attempt to influence USA government officials.