06/03/2011 at 03:10 PM EDT
A federal grand jury has charged John Edwards with breaking campaign finance laws by using political funds to cover up his affair
and out-of-wedlock child
with Rielle Hunter while he was running for president in 2008.
He was indicted Friday in North Carolina on six counts, including conspiracy, four counts of illegal campaign contributions and one count of false statements.
Edwards arrived Friday at the federal courthouse Winston-Salem, N.C., with his daughter Cate for his initial appearance before U.S. District Judge Patrick Auld. Edwards pleaded not guilty.
At issue is money that was paid to Hunter and onetime Edwards aide Andrew Young to keep Edwards's affair and love child a secret. Young even at one point claimed paternity of the girl, Quinn, though Edwards later admitted he was the father.
Investigators claim the funds paid to Hunter and Young from donors should be considered campaign donations since they aided Edwards's presidential bid.
Outside of court, his attorney Gregory Craig disputed the allegations.
"This is an unprecedented prosecution," says Craig. "No one would have known, or should have known, or could have been expected to know, that these payments would be treated or should be considered as campaign contributions. And there was no way Sen. Edwards knew that fact either.”
Edwards, 57, is said to want to put the episode behind him, one way or another. A source close to the former senator told PEOPLE in January: "John's optimistic nothing is going to come of it, but even if not, he's like, 'Let's get there, already.' "
The revelations of the affair and love child destroyed what was once viewed as a promising political career.
Edwards's wife Elizabeth stood by her husband for three years after the allegations of an affair first surfaced, but they split for good
in January 2010. Elizabeth Edwards died in December
after a six-year battle with cancer.
Edwards's daughter Cate, 29, who has said she loves her father and remains very close to him, had no comment. "It's hard, but they're a family – always have been, always will be – and they are sticking together," says a friend of the family.
Reporting by SHARON COTLIAR and SANDRA SOBIERAJ-WESTFALL