Larry Page, Google's chief executive, knew that adverts for unlicensed Canadian pharmacies were running on its US site.
This is according to Rhode Island attorney Peter Neronha, who told the Wall Street Journal that incriminating emails had been uncovered as part of an official investigation.
Last week, the search giant agreed to pay $500 million (£306 million) to settle the case.
It has, however, declined to comment on the specifics of Mr Neronha's allegations.
"Larry Page knew what was going on," he told the Wall Street Journal, basing his claims on company documents and emails obtained during the course of the investigation.
Elsewhere, the social networking site Facebook has announced a significant revamp of how users control their privacy on the site.
Among the raft of changes, it has been confirmed that items posted online will each have their own sharing settings determining who can see them.
Despite this, Chris Cox, Facebook's vice-president of product, said it did not necessarily mean the old system was confusing.
Posted by Andre Dixon