Lev Parnas, who has been charged with violating campaign finance laws, has denied hiding the payment. The Ukraine-born U.S. citizen has been living under house arrest in Florida since October.
Prosecutors say Parnas and another Florida businessman, Belarus-born Igor Fruman, illegally funneled money to a pro-Trump election committee and other politicians. Prosecutors said the illegal donations included money given by a Russian businessman to various state and federal candidates as part of an effort to promote a marijuana business.
Parnas and Fruman have pleaded not guilty.
Last week, prosecutors asked U.S. District Judge Paul Oetken to revoke Parnas' bail and have him jailed. They said he had concealed information about his finances, including a $1 million payment he had received from an account in Russia in September.
The account was in the name of his wife, Svetlana Parnas.
Prosecutors have said Parnas poses an "extreme" risk of fleeing the country, adding he had "considerable ties abroad and access to seemingly limitless sources of foreign funding."
Parnas' lawyer, Joseph Bondy, said in a court filing that the $1 million payment was, in fact, disclosed. Bondy denied that Parnas posed a risk of fleeing, noting Parnas was cooperating with the congressional impeachment proceeding against Trump and intended to continue to do so.
The case against Parnas is unfolding as prosecutors investigate payments made to Giuliani, who has not been charged with a crime and has denied any wrongdoing.
Giuliani has emerged as a key figure in the impeachment proceedings, in which Democrats have accused the Republican president of abusing his power to pressure Ukraine to investigate his political rival Joe Biden and Biden's son Hunter. Trump has called the impeachment a witch hunt.Giuliani has said Parnas and Fruman helped him investigate the Bidens in Ukraine.