John Edwards to be indicted this week?

The Justice Department reportedly is ready to file charges against former Sen. John Edwards for allegedly using campaign money to hide his mistress.

After a two-year investigation, federal prosecutors could charge Edwards this week - possibly as early as Wednesday - with violating federal campaign laws when he ran for president in 2008, reports CBS News correspondent Jan Crawford.

A federal grand jury has been investigating whether Edwards misused up to $1 million in presidential campaign contributions to cover up his long-term affair with former aide, Rielle Hunter.

Edwards' team denies he violated campaign finance laws, but prosecutors are closing in.

"They could conclude that that was a misuse of campaign money for personal purposes, which would violate the campaign finance laws," campaign finance expert Fred Wertheimer told CBS News

Edwards has not commented publicly about the investigation. However, the federal grand jury in Raleigh has spent the past two years listening to testimony from key players. That indictment could come this week unless a plea deal is put in place.

"There's behind-the-scenes stuff going on quite frantically about a plea deal," Crawford said. "I mean, is he going to be able to try to reach some kind of an agreement with the Justice Department? It might mean lesser charges. I think the Justice Department, based on what my sources are telling me, are standing on a pretty hard line, which would make a plea deal pretty difficult. So either way, not a lot of great options for John Edwards. Plea deal, indictment. He's looking at some tough, tough times ahead."

Crawford noted, however, that "this is not an easy case" to make against Edwards, which is why the Justice Department has moved methodically.

Meanwhile, CBS News has learned that last week Edwards secretly met with reclusive heiress Rachel "Bunny" Mellon, the donor to the former presidential candidate. Prosecutors suspect Mellon helped finance attempts to keep the affair quiet.

Crawford reported sources close to Edwards say there was nothing nefarious about their meeting.

Crawford explained, "(They say) she was one of his most loyal supporters. And so it was this lunch between two old friends. But, it also could play to Edwards' legal strategy, and here's why: Prosecutors say her money was used to support his campaign. And so, therefore, it was a campaign contribution and you can't do that. But Edwards says, no, that's not true. All that money, which they call the 'Bunny money' ... was a gift from a friend. If he wasn't running for president, she would have given him that money anyway. That is his defense. And (Edwards' defense) says that lunch supports that. He's not running now and they're still getting together."

An indictment would mark a steep fall for a man once so near the pinnacle of power.

Edwards lived on a public stage: a multimillionaire trial lawyer who was elected U.S. senator in his first campaign for office; the democratic nominee for vice president in 2004; and then a contender for the White House in the 2008 election. And all the while, he was seen as a devoted father and loving husband of wife Elizabeth Edwards.

Pictures: Elizabeth Edwards

But in 2006, while his wife was battling a recurrence of breast cancer, Edwards began an affair Rielle Hunter, who produced videos for his campaign. A year later, the National Enquirer reported the two were having an affair. And then the bombshell: Hunter was pregnant with his child.

Edwards first denied the child was his and concocted a story that a top aide was the baby's father. But it was all a lie. Edwards eventually acknowledged he was the father of Hunter's baby. He and his wife Elizabeth separated. She died of cancer last December.