News broke earlier this week that Google had set aside $500,000 to settle a mysterious Department of Justice investigation of “advertising by certain advertisers,” and now a report indicates the badvertisers were “rogue online pharmaceuticals.”

The Wall Street Journal quotes unnamed sources in identifying the culprits, with Google and the DOJ refusing to comment on the matter.

The story says search engines can be held liable for advertising profits from illegal activity, referencing a 2007 incident in which Google, Microsoft and Yahoo paid fines totaling $31.5 million for accepting gambling site ads. Google has struggled for years over how to handle drug ads, moving in 2003 to ban ads for sites that sell certain drugs without prescriptions. The WSJ’s sources say Google changed its pharmaceutical ads policy again last year after the DOJ began its investigation.

Google Near Deal in Drug Ad Crackdown [The Wall Street Journal via Engadget]

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