Federal prosecutors on Thursday said they had indicted former US House speaker Dennis Hastert on bank-related charges, allegedly related to paying an unnamed person “to conceal his past misconduct”.

A statement from the US attorney’s office in Chicago said the 73-year-old Illinois Republican was accused of evading the requirements of federal law through the careful and systematic withdrawal of $952,000 from his banks.

He was also accused of lying to the FBI.

Hastert was speaker of the House of Representatives from 1999 to 2007, when he resigned from Congress after Democrats gained control of the congressional chamber. He joined the law firm Dickstein Shapiro in 2008, as a senior advisor.

The indictment, in US district court in Illinois, notes that between 1965 and 1981, Hastert worked as a high school teacher and coach in Yorkville, Illinois. The indictment then notes that “Individual A”, whom he is alleged to have paid, has known Hastert “most of Individual A’s life”.

“In or about 2010”, the indictment says, Hastert met with this person and “discussed past misconduct by [Hastert] that had occurred years earlier”. The indictment alleges that Hastert then agreed to “provide” this person $3.5m “in order to compensate for and conceal his prior misconduct” against them.

According to the prosecution, Hastert systematically withdrew about $1.7m from banks, and then periodically delivered payments to Individual A for four years. His banks, required to report transactions of more than $10,000, questioned Hastert, who then decreased the size of his withdrawals but continued to pay the unnamed person amounts of $50,000 to $100,000.

At this point, the indictment says, the FBI began its investigation into whether Hastert’s withdrawals were intended to evade reporting requirements. Questioned by agents about whether he made the withdrawals out of mistrust in the banks, he answered: “Yeah … I kept the cash. That’s what I’m doing.”

Each count of the indictment carries a maximum penalty of five years in prison and $250,000 in fines.

The Chicago Mercantile Exchange said on Thursday that Hastert had resigned from its board.

