An intense, behind-the-scenes legal struggle over whether John Edwards can be charged with a crime has come to an end, and Edwards is the loser.

Federal prosecutors in Washington decided this week they can seek an indictment against Edwards, the former North Carolina senator and two-time Democratic presidential candidate, according to multiple sources involved in the case. The sources spoke to The News & Observer on condition they not be identified.

The decision follows two years of investigation in the broad probe of Edwards' campaign and the use of money for his mistress, Rielle Hunter.

Justice Department officials, members of Edwards' legal team and Edwards all declined public comment or could not be reached about the decision-making in the investigation.

Gregory Craig, one of Edwards' lawyers, said Wednesday the government has wasted millions pursuing Edwards.

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

A grand jury could begin hearing information as soon as Tuesday from prosecutors seeking an indictment. The grand jury work could last several days. Grand jury meetings are secret, but indictments are public once they are issued. It would be rare for prosecutors to seek an indictment and not secure one.

But an indictment is not a certainty.

Edwards could decide to make a deal, plead guilty to a crime and end the probe. Any plea deal would require that Edwards admit to a felony, the sources said.

A plea would avoid a trial and save Edwards millions in legal bills. Now a single parent with young children because of the death of his wife, Elizabeth, Edwards, by taking a deal, might be spared the possibility of going to prison.

Still, Edwards, one of North Carolina's most successful trial lawyers, has taken risks in the courtroom when stakes are high. He won tens of millions in jury verdicts after turning down smaller settlement offers.

His political rise

Edwards rocketed into politics in 1998, beating an incumbent senator. He was the Democratic vice presidential candidate in 2004 after losing a bid for president.

He ran again for president, starting in 2006, but was questioned a year later by The National Enquirer about whether he was carrying on an affair. A Hunter confidante had provided information to the tabloid, which also reported that Hunter was pregnant and that the child belonged to Edwards.

Edwards had denied the affair and paternity, both lies.

Instead, a close aide, Andrew Young, claimed paternity - and took his own family and Hunter across the country to stay in various mansions while avoiding reporters, enjoying vacations and private jet trips along the way. It was paid for by two wealthy Edwards campaign supporters.

Any criminal case appears to be directly focused on how money flowed to hide Hunter while Edwards was running for president.

Disclosure is question

The focus is on payments from heiress and philanthropist Rachel "Bunny" Mellon of Virginia and the late Fred Baron, a lawyer from Texas.

Authorities in the probe had also examined an array of other entities linked to Edwards or his aides that also received big-money donations, including nonprofit organizations and a limited liability corporation. The N&O sources indicated that charges are unlikely to be based on those types of transactions.

Instead, attention is on more than $1 million sent from Mellon and Baron to Young and Hunter. Some of the money went first to a decorator in Union County, hidden in boxes of chocolates.

The question is whether that money amounted to illegal campaign donations. Federal law says candidates must disclose donations, and the law limits an individual to giving $2,400 per election to a candidate.

Prosecutors would likely argue that the money was a campaign expenditure intended to hide the affair from voters and was subject to disclosure and limits.

Edwards' lawyers would likely respond that the checks were personal gifts to help Edwards hide the affair from his wife, who fought a public battle with cancer and earned widespread admiration after writing best-sellers about her life. She died in December.

An important factor in a possible criminal case would be whether prosecutors can prove that Edwards knew the money was flowing to Hunter and whether it was used to influence an election by hiding the affair from voters.

Former aide's role

In a tell-all book published last year, Young provided support for both theories. "These funds ... were gifts, entirely proper and not subject to campaign finance laws," he wrote. But Young wrote that he deposited checks in a joint account with his own wife, "to be used to keep Rielle happy and hidden from the media, Mrs. Edwards, and anyone who might divulge her existence."

Edwards has denied any wrongdoing, and his lawyers say any charges are a "huge stretch" of the campaign finance laws and that there is no precedent for the case. Edwards has been mostly out of the public eye since his wife's death, caring for his younger son and daughter at their Chapel Hill home. He pays child support to Hunter, who lives in Charlotte with their daughter.

Craig said in the statement that prosecutors originally focused on whether money from Edwards' actual campaign accounts was used improperly. It was not, he said, and prosecutors shifted focus. "[N]ot one penny from the Edwards campaign was involved," Craig said.

A costly defense

Any trial would be contentious, a media frenzy - and costly. Edwards would have to spend millions in legal fees, according to Joseph B. Cheshire V, one of the state's prominent defense attorneys.

"Only a successful large corporation or a person far wealthier than Edwards can afford to match the resources of the government," Cheshire said.

A parade of witnesses have visited the grand jury in Raleigh over the years, some as recently as December.

Since then, the case has moved to the Justice Department in Washington. Lawyers, prosecutors and experts for both sides have been meeting, at times in fierce debates, as officials made decisions about an indictment.

In February, Edwards added Craig, a powerhouse lawyer who was the first White House counsel in the Obama administration, to the legal team trying to derail any indictment. Wade Smith of Raleigh and Jim Cooney of Charlotte are also defending Edwards.

And while the case started in Raleigh, where Republican George E.B. Holding is the U.S. attorney, it has been reviewed for months in Washington, where the major decisions are being made. The case was cleared to proceed through the Justice Department's Public Integrity Section, as well as a deputy attorney general and, more recently, by the top official in charge of the criminal division, Lanny A. Breuer.

Faith in juries

Breuer and Craig had once worked together to defend Bill Clinton from impeachment charges in the Senate. Edwards, then a Senator, also assisted, and he first received national attention as a result of his questioning in depositions and in the impeachment trial.

At the time, Edwards told his fellow senators about his many years in the legal system, saying he had "boundless faith" in people who sit on juries.

"They want to do what is right," Edwards said. "They want to do what is right in the worst kind of way."

andrew.curliss@newsobserver.com or 919-829-4840