The CNMI Lieutenant Governor, Timothy Villagomez, has appeared in court, along with two others, on charges of wire fraud, conspiracy and theft of federal funds.
The charges are the culmination of a five-month investigation by federal authorities.
The indictment charges Mr Villagomez, Commerce Secretary James Santos, his wife Joaquina Santos, who is Mr Villagomez's sister, and former Commonwealth Utilities Corporation executive director Anthony Guerrero with conspiring to defraud the CNMI government.
It allegedly involves thousands of dollars of business deals involving needless chemical purchases for the corporation.
First Assistant US Attorney, Jeffery Strand, says Mr Guerrero has struck an agreement with federal prosecutors, pleading guilty on Friday to one count of conspiracy, and could testify in the pending trial.
Mr Villagomez and the Santos couple surrendered themselves into federal custody early Monday morning.
All three pleaded not guilty to each of the charges against them.
David Lujan, Villagomez's attorney, declined to speak about the case.