Google Inc is close to settling a US criminal investigation into allegations it made money by accepting ads from online pharmacies that break US laws, says a media report.

Attributing to a source, The Wall Street Journal reported, "Google is close to settling a US criminal investigation into allegations it made hundreds of millions of dollars by accepting ads from online pharmacies that break US laws."

Earlier this week, Google had disclosed that it has set aside $ 500 million to potentially resolve a case with the Justice Department.

Google said the amount was set aside in connection with the potential resolution of an investigation by the Justice Department into the use of Google advertising by certain advertisers.

The report said that federal investigation has examined whether Google knowingly accepted ads from online pharmacies, based in Canada and elsewhere, that violated US laws.

Search engines can be liable if they are found to be profiting from illegal activity, the report added.

Google made up most of its revenues from advertising for the quarter ended March 31, 2011.

The company derives its additional revenues by offering display advertising management services to advertisers, ad agencies and publishers, among others.

In December, 2007, the three largest Internet companies - Google, Microsoft Corp and Yahoo Inc - agreed to pay a combined $ 31.5 million fine to settle civil allegations brought by the Justice Department that they had accepted ads from illegal gambling sites, the daily noted.

According to the publication, spokespersons of Google and the Justice Department declined comment on the issue.