Raleigh, N.C. — Former Democratic presidential candidate John Edwards is considering a plea deal to conclude a two-year investigation into possible campaign finance violations, sources tell WRAL News.

The case has been under review by the Department of Justice in Washington, D.C., in recent months, and officials recently signed off on prosecuting Edwards. WRAL News has learned the case will likely go to the federal grand jury early next week, and an indictment could come by late next week.

The investigation appears to have zeroed in on money from a 100-year-old campaign supporter and attempts to hide Edwards' affair with a campaign staffer.

Former Edwards aide Andrew Young wrote in his tell-all book, "The Politician," that heiress Rachel "Bunny" Mellon gave Edwards a total of $700,000 as a gift. The so-called "Bunny money" helped fund the cover-up of Edwards' affair with video producer Rielle Hunter, who was pregnant with the former U.S. senator's child during the 2008 presidential campaign.

Political observers have said the money was a campaign contribution and should have been noted in Edwards' campaign finance reports.

There are also questions about millions of dollars from Mellon that went to The Alliance for a New America, a nonprofit that supported Edwards' candidacy. Money from the nonprofit was paid to a consultant agency that no longer exists.

Young told WRAL News in a 2010 interview that Edwards' campaign finance chairman, wealthy Texas lawyer Fred Baron, also financed flights and paid rent on a California home for Hunter and Young's family during the period when Young pretended to be the father of Hunter's baby.

Baron died from cancer in 2008, but his widow appeared before the federal grand jury in Raleigh in January. Investigators have interviewed Mellon twice at her estate in Virginia, and some of her family members testified before the grand jury in December.

Former federal prosecutor Dan Boyce said Thursday that the U.S. attorney could use direct or circumstantial evidence to make a conspiracy case.

"They could show a sequence of events to prove knowledge," Boyce said.

Edwards declined to comment about the case on Tuesday. Two years ago, he released a statement through his Raleigh attorney to say that he was confident no funds from his campaign were used improperly.

Greg Craig, a Washington, D.C., attorney representing Edwards, issued a statement Wednesday indicating that the former candidate would fight any criminal charges.

"John Edwards has done wrong in his life – and he knows it better than anyone – but he did not break the law," said Craig, a former White House counsel. "The government's theory is wrong on the facts and wrong on the law."

Politico, a national political blog, quoted unidentified sources who said other members of Edwards' legal team were advising him to accept a plea deal.

"It's a lot easier to give advice than receive advice for a lawyer," Boyce said. "When you're in the hot seat trying to make the decisions for your own life (and) your own career, it's a lot more difficult."

Boyce said it's hard to predict whether the plea offer includes prison time, noting that it ultimately is a judge's call.

"It's possible it might not be an active sentence, but in this kind of high-profile case, I would say active time is definitely on the table," he said.