Updated: This story was updated at 3:15 p.m. with comment from Ken Paxton spokesman Matt Welch.

AUSTIN — Attorney General Ken Paxton is being investigated under bribery and corrupt-influence laws for accepting a six-figure gift from a CEO whose company was under investigation by the state for fraud, the district attorney leading the probe confirmed Thursday.

In July 2016, Austin-based medical device company Preferred Imaging LLC agreed to pay a $3.5 million settlement after a multiyear Medicaid and Medicare fraud investigation. The year before, Preferred Imaging CEO James Webb had given $100,000 to help Paxton fight criminal fraud charges the attorney general has been battling since July 2015.

On Thursday, Kaufman County District Attorney Erleigh Wiley confirmed to The Dallas Morning News that she has been investigating whether Paxton broke state laws that put limits on gifts public servants can receive from people "subject to [their] jurisdiction."

"There is an active investigation looking into that matter," Wiley told The News. "We are carefully and thoroughly going through every piece of evidence."

The complaint that led to the investigation was originally made to the Texas Rangers by the attorney of the same whistleblower that launched the probe into Preferred Imaging. Instead of appointing a special prosecutor to investigate, Wiley took it over at the behest of the regional administrative judge.

Wiley, a Republican, added she was close to deciding whether to send the case to a grand jury and said she's received "great cooperation" from both the Texas Rangers and Paxton's legal team.

Paxton spokesman Matt Welch reiterated that the attorney general's team has "fully cooperated" with the probe.

"Attorney General Paxton's personal financial statement fully complies with Texas ethics laws and has been thoroughly vetted by legal counsel who are ethics experts," Welch added. "Despite irresponsible media speculation and wishful thinking by political opponents, all donations given to the Paxton legal defense effort are in full compliance with state law."

At the time of the Preferred Imaging settlement, The News reported Paxton's agency had little involvement in the investigation and the attorney general himself had "no knowledge or involvement in this matter."

The Office of the Attorney General's Civil Medicaid Fraud Division helped negotiate the settlement terms but "never received a referral" and therefore didn't investigate, spokesman Marc Rylander said then. The U.S. attorney's office and Health and Human Services characterized the attorney general's office's involvement as "minimal."

Texas received $68,000 of the total settlement.

"The vast majority of damages [losses] in this case were federal in nature, and typically, when that is the case, federal agencies take the lead in the investigation," said Kathy Colvin, spokeswoman for the U.S. attorney for the Northern District of Texas. "The role of the Texas state attorney general's office, in the investigation and settlement, was very minimal. It was primarily in support of establishing the state's loss."

Whistleblower complaint

The fraud investigation into Webb's company was spurred by Tracy Sifuentes, a former Preferred Imaging employee turned whistleblower. As a whistleblower, Sifuentes received a percentage of the settlement with Preferred Imaging.

Sifuentes attorney Justin Sumner said he filed the complaint after finding out about the Webb donation because "the circumstances are suspect."

"To learn that Ken Paxton had received a donation of that amount of money just before the settlement and the state settled for the insignificant amount that they did certainly would raise an eyebrow," Sumner said. "I don't have any proof of fraud. I don't have any proof of Paxton being paid off, but I certainly want the record to reflect that I have cooperated with the Texas Rangers."

Sumner said he was unaware of the current state of the investigation.

The Preferred Imaging investigation covered a six-year period ending in February 2015, a month after Paxton took office as attorney general. Five months later, a Collin County grand jury indicted Paxton on three felony charges of violating state securities laws.

The attorney general is accused of funneling clients to a friend's investment firm without being registered with the state and defrauding a fellow Republican lawmaker and Florida businessman in a tech startup investment venture. Paxton has said the indictments are part of a political witch hunt.

Legal defense fund

To help pay for his lawyers, Paxton set up a legal defense fund in 2015. In its first year, he raised $330,000 from friends, family and business associates.

He listed the amounts under the "gifts" section of his annual financial disclosures, and last year, added this note to the end of the form: "All gifts for legal defense were conferred and accepted on account of a personal, professional, or business relationship independent of General Paxton's official status."

Webb's 2015 donation was the largest single gift to Paxton's legal defense fund. He did not contribute last year.

Texas' bribery laws prohibit elected officials from taking "any benefit from a person the public servant knows to be subject to regulation, inspection, or investigation by the public servant or his agency." Excepted are gifts "conferred on account of kinship or a personal, professional, or business relationship independent of the official status of the recipient."

The Texas Ethics Commission has not signed off on elected officials receiving donations that aren't campaign-related from out-of-state friends and business associates. In 2016, it punted a request to sign off on such an arrangement made by an anonymous official in Paxton's agency.