Tahawwur Rana is a 50-year-old Canadian businessman in a heap of trouble.

For the past three weeks, Rana has been on trial in a Chicago courtroom charged with several counts of providing material support for terrorism.

U.S. federal prosecutors have presented extensive wiretap and surveillance evidence they allege connects Rana to both the 2008 Mumbai attacks and a plot to murder journalists at Denmark’s Jyllands-Posten newspaper. The Danish paper enraged some Muslims by publishing controversial cartoons of the prophet Mohammed.

In the coming days, his American lawyers, Patrick Blegan and Charlie Smith, will begin to mount a defence. But Rana’s personal fate is being overshadowed by sensational evidence that threatens to poison Washington’s already troubled relationship with its erstwhile ally Pakistan even further — evidence that appears to show that despite repeated denials, the Pakistani military is secretly training and financing militant groups.

The prosecution’s star witness is David Headley Coleman, who, before legally changing his name, was Daood Sayed Gilani.

Coleman and Rana met in their teens while attending the Hasan Abdal Cadet College in Pakistan’s Punjab province.

Rana emigrated to Canada from Pakistan in 1997. He owns a house near Ottawa now occupied by his father, brother and sister-in-law.

Rana moved to Chicago 10 years ago, shortly after obtaining his Canadian citizenship in order to expand the reach of his immigration consultancy business, First World Immigration. That’s where he re-connected with Headley.

In exchange for a plea bargain sparing him from the death penalty, Headley agreed to testify against Rana. Headley admits he is a member of Lashkar-e-Taiba, the Pakistan-based group that perpetrated the 2008 Mumbai massacre, which killed 160 people, including two Canadians.

Headley alleges that, with Rana’s complicity, he travelled to Mumbai several times posing as a representative of First World Immigration in order to do first-hand surveillance of the Taj Mahal Hotel and other possible targets. Rana’s lawyers will argue their client was duped by his friend Headley.

The most sensational testimony by Headley so far is that the Mumbai attacks were bankrolled and directed by Pakistan’s military intelligence agency, the Directorate of Inter-Services Intelligence (ISI). Headley has testified he learned surveillance and intelligence techniques at training camps run by ISI agents and saw Pakistani army officers giving Lashkar fighters weapons training.

Regional players from Afghan Prime Minister Hamid Karzai to the CIA to most frequently India have long complained that Pakistan is playing a double game — pretending to help the U.S. fight the Taliban, while in fact supporting the Taliban.

The Rana trial is the first time, however, that an insider such as Headley has blown the whistle on the ISI in a credible public forum.

The revelations are bound to intensify international scrutiny of Pakistan’s alleged sponsorship of extremist groups, and at first blush, there seem to be many more members of Lashkar-e-Taiba hiding out in plain sight in Pakistan.

The Institute for Conflict Management, a New Delhi-based think tank that keeps a daily record of terror incidents in South Asia, alleges there are currently 43 separate terrorist groups active in Pakistan. Some of them, like Lashkar-e-Taiba, are believed to benefit from varying degrees of support from the Pakistani military and by extension, the government of Pakistan itself.

Pakistan-U.S. relations took a blow in May when, after years of listening to the Pakistani government claim ignorance of Osama bin Laden’s whereabouts, the U.S. tracked down and killed the al-Qaeda leader less than a kilometre away from Pakistan’s premier military academy.

The trial of Canadian citizen Tahawwur Rana is worth watching to see what other surprises the situation in Pakistan might have to offer up.