Today marks the biggest legal setback for United States President Donald Trump — two of his inner circle are now convicted felons and the hounds are getting closer to the gates.

Paul Manafort, Mr Trump's former campaign chairman, was found guilty on eight counts by a jury in Alexandria, Virginia.

Manafort's trial — the first stemming from special counsel Robert Mueller's Russia investigation — notably had nothing to do with Russia or that country's alleged interference with the 2016 presidential election.

Rather, the prosecution charged Manafort with 18 counts of bank/tax fraud, and conspiracy.

Following four days of deliberations, the jury was hung on 10 counts, raising the possibility that the prosecution would re-try him on those counts.

The trial was acrimonious, and the judge showed low tolerance for the prosecution's strategy trying to portray Manafort as a greedy operator who lied and fraudulently concealed his financial affairs for a number of years.

Ultimately, the 12-person jury found that Manafort was guilty on five counts of filing false income tax returns (relating to millions of dollars of income derived from consulting work in Ukraine), one count of non-disclosure of foreign bank accounts (relating to disclosures required in respect of accounts owned by citizens in foreign financial institutions under the Bank Secrecy Act), and two counts of banking fraud (relating to obtaining millions of dollars in loans by defrauding banks). The sentencing is awaited.

Will President Donald Trump pardon Paul Manafort? ( Reuters: Jonathan Ernst )

This raises intriguing questions:

1. Will Mr Mueller be able to persuade Manafort to flip in exchange for a light sentence? 2. Will the judge be lenient in his sentencing given his posture toward the prosecution? 3. And will the President pardon Mr Manafort?

In relation to number one, Mr Mueller's hand is unmistakably strengthened by the guilty verdict because Manafort finally faces the real prospect of spending the rest of his life in jail.

Manafort — reportedly a connoisseur of fine living — has a real incentive now to cooperate to reduce his time in prison.

With regard to number two, Judge Ellis, in his ruling against Manafort's challenge to Mr Mueller's authority, had stated: "… we have a prosecution of a campaign official, not a government official, for acts that occurred well before the presidential election."

"To be sure, it is plausible, indeed ultimately persuasive here, to argue that the investigation and prosecution has some relevance to the election which occurred months, if not years, after the alleged misconduct."

And during arguments the judge noted that Mr Mueller was only bringing this prosecution of Manafort over financial crimes committed decades ago — not because of any special interest in Manafort — but in an effort to get at Mr Trump.

He also wrote about Mr Mueller: "The appointment of special prosecutors has the potential to disrupt … checks and balances, and to inject a level of toxic partisanship into investigation of matters of public importance."

It remains to be seen whether these sentiments affect the sentence awarded to Manafort.

Thirdly, Manafort may not cooperate because of the prospect of a pardon from the President.

Robert Mueller might yet persuade Manafort to flip in exchange for a lighter sentence. ( AP: Andrew Harnik )

Just weeks ago, the President tweeted:

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Today, following the guilty verdict, Mr Trump told the media that Manafort "is a good man who was with Ronald Reagan … I feel very sad about that [guilty verdict] … it's a sad thing that happened … this is a witch hunt."

He also stressed that the verdict had nothing to do with Russia collusion and said: "I feel very badly for Paul Manafort."

Last weekend, Mr Trump again doubled down on condemnation of Mr Mueller in very harsh terms:

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Given his comments, Manafort might calculate that Mr Trump's professed sympathy for him might yield a pardon.

If a pardon does eventuate, that, in turn, would raise questions about Mr Trump obstructing justice and raise the prospect of impeachment.

Another consequence of the guilty verdict is the effect it might have on others being targeted by Mr Mueller.

They might calculate their odds of successfully fighting the US Government in court are low and decide to flip.

If Manafort, who is vastly better resourced, could not prevail, they will assume their chances are even lower.

Michael Cohen leaves court after pleading guilty. ( AP: Mary Altaffer )

This phenomenon may already be coming to fruition with the announcement today that the President's former personal lawyer, Michael Cohen, has pleaded guilty.

Cohen's guilty plea is massively significant — on the campaign finance violation count.

The Government alleged that in August 2015, a tabloid magazine chairman "in coordination with COHEN and one or more members of the campaign, offered to help deal with negative stories about Individual-1's [presumably Mr Trump] relationships with women by, among other things, assisting the campaign in identifying such stories so they could be purchased and their publication avoided".

Pursuant to that scheme, Cohen made payments "in order to influence the 2016 presidential election. In so doing, he coordinated with one or more members of the campaign, including through meetings and phone calls, about the fact, nature, and timing of the payments. As a result of the payments solicited and made by COHEN, neither Woman-1 nor Woman-2 spoke to the press prior to the election".

This is the first time Mr Trump is connected personally to the commission of a felony.

Logically, if Cohen is guilty of campaign finance violations committed at the instance of Individual-1, there is a real prospect of that person also being implicated.

The Mueller team is obviously thrilled with this plea, and the prosecutors tweeted chillingly:

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The message is probably directed at Mr Trump.

The question is whether and how the President will be able to get out of this legal pickle.

Dr Sandeep Gopalan is the pro vice-chancellor for academic innovation at Deakin University and a professor of law.