Attorney Pierce O'Donnell was indicted by a federal grand jury in Los Angeles on Thursday on charges of funneling $26,000 in contributions to the campaign of a candidate in the 2004 presidential election through employees of his law firm and other people, according to the indictment.
O'Donnell, 61, is accused of soliciting employees and others to make the contributions and then reimbursing them.
Known as "conduit" contributions, such donations hide the identities of the true contributors and violate federal law, prosecutors said.
Though the name of the presidential candidate does not appear in the indictment, several sources familiar with the investigation said the contributions were made to the campaign of Democrat John Edwards.
O'Donnell is charged with three felonies and faces a maximum of 12 years in prison if convicted of all counts, according to prosecutors in the U.S. attorney's office in Los Angeles.
Even before his indictment, O'Donnell's lawyers had questioned whether his prosecution was politically motivated.
The attorneys said he is an outspoken critic of the Bush administration and represents victims of Hurricane Katrina in a lawsuit against the government.
O'Donnell's lawyers had tried to persuade prosecutors the matter should be handled administratively by the Federal Elections Commission, as other similar situations had, or be charged as a misdemeanor.