The governor's private spokesman disagreed with Williams' version of events.
"Governor McDonnell was not aware of Mr. Williams’ May 2011 loan to Mrs. McDonnell until after the funds had been spent,” spokesman Jason Miyares said in an email to the Times-Dispatch.
Miyares did say that McDonnell was aware of a $70,000 payment Williams made in 2012 to a small real estate company co-owned by the governor and his sister.
After the money became public earlier this year, McDonnell said they had been loans, and eventually said they and tens of thousands of dollars worth of other gifts from Williams had been returned and repaid.
According to the Times-Dispatch, lawyers for the McDonnells met last week with federal prosecutors to discuss the case. Prosecutors are expected to make a decision on whether to seek an indictment between next month's gubernatorial election in Virginia and Thanksgiving.