Google CEO Larry Page was aware unlicensed Canadian pharmacies were advertising on its US search site, it is claimed.
According to the Wall Street Journal (WSJ), Peter Neronha that leads a Department of Justice (DoJ) investigation into the issue, claimed documents and emails uncovered during the investigation proved the search engine turned a blind eye to the practice.
"Larry Page knew what was going on," Neronha told the WSJ.
However, he wouldn't go into further details about Google's involvement.
In 2003, the National Association of Boards of Pharmacy warned the search engine it was illegal for prescription drugs to be imported into the US and while Google stopped foreign firms from offering drugs to US users it continued to let Canadian companies advertise.
It wasn't until Google became aware of the DoJ investigation in 2009 that it stopped Canadian firms from advertising to US users. Earlier this month, the search engine agreed to hand over $500m it had made from the ads in a settlement.
"With hindsight, we never should have allowed those ads on Google in the first place," Google said in a statement.