Federal corruption charges
On January 21, 2014, McDonnell and his wife were indicted on federal corruption charges. The charges followed a months-long federal investigation into gifts McDonnell received from a political donor.[213][214] They were charged with 14 different counts relating to their acceptance of more than $135,000 in gifts, including a Rolex watch, loans, trips and other items from Jonnie Williams Sr., former CEO of Star Scientific, a company developing a compound called anatabine as a dietary supplement and as a drug. In 2013, McDonnell repaid more than $120,000 to Williams and apologized for bringing "embarrassment" to the state. McDonnell insisted he did not break the law and vowed to fight "these false allegations".[215][216] He became the first Governor of Virginia to be indicted for actions committed during his tenure.[217] In July and August 2014, Williams testified at McDonnell's federal corruption trial.[218]

The trial lasted five weeks and focused heavily on McDonnell's relationship with his wife, putting details of their relationship and private life on public display.[219][220] McDonnell said in a 2017 interview that prosecutors threatened his children to be careful of conversations with their parents lest the children be charged with obstruction of justice.[12] After three days of jury deliberations in the United States District Court for the Eastern District of Virginia, McDonnell and his wife were found guilty of public corruption charges on September 4, 2014.[8] He was convicted of honest services wire fraud, obtaining property under color of official right, and extortion under color of official right.[221][222] His wife was convicted of honest services wire fraud, obtaining property under color of official right, extortion under color of official right, and obstruction of a federal proceeding.[221][222] Senior United States District Judge James R. Spencer set sentencing for January 6, 2015. The United States Probation Office recommended sentencing between ten years and one month to twelve years and seven months.[223] Following his conviction, McDonnell lost his Liberty University teaching job.[224]

On January 6, 2015, Judge Spencer sentenced the former governor to two years in prison, followed by two years of supervised release. Prior to sentencing, the judge agreed with the defense counsel, believing McDonnell's gifts were overstated, and reduced McDonnell's potential sentence. In arguing for leniency, McDonnell's attorneys from the Jones Day megafirm produced over 400 letters, including ones from McDonnell's predecessor, Tim Kaine, and a group of 44 former attorneys general,[225] arguing that McDonnell led an exemplary public life marred by one mistake.[226]

Supreme Court case
Main article: McDonnell v. United States
On January 26, 2015, the 4th U.S. Circuit Court of Appeals ordered that McDonnell remain free pending appeal,[227] but on July 10, 2015, the court affirmed McDonnell's conviction.[228] On August 31, 2015, the U.S. Supreme Court ordered that McDonnell remain free pending a decision from that court to hear or not hear the case.[229] On December 8, 2015, the U.S. Solicitor General and others filed a brief with the Supreme Court requesting the court not to hear the case.[230] In January 2016, the Supreme Court agreed to hear the case.[231]

The Supreme Court heard oral arguments on the case on April 27, 2016,[232] and unanimously vacated McDonnell's conviction on June 27, holding that the trial court's construction of the statutory term "official act" was too broad, encompassing activities such as setting up meetings, hosting parties and calling Virginia officials to discuss Williams' business.[10][233] Chief Justice John Roberts, writing for the court, left open the option for retrying McDonnell under a more restrictive construction of the disputed term, writing, "If the court below determines that there is sufficient evidence for a jury to convict Governor McDonnell of committing or agreeing to commit an 'official act', his case may be set for a new trial. If the court instead determines that the evidence is insufficient, the charges against him must be dismissed. We express no view on that question." There was criticism of the decision, some noting that all of the justices themselves had each received expensive gifts or travel while serving on the Supreme Court at the time that the decision was handed down.[234][235][236][237]

After reviewing the Supreme Court decision and the response of the original prosecution team, which wanted to retry the case, the Justice Department announced on September 8, 2016, it would move to dismiss all charges against McDonnell and his wife.[11] McDonnell said he felt vindicated[238] and told NBC's Chuck Todd in an interview, "I know in my heart, Chuck, I never believed that anything that I did was wrong or illegal."[239]