On October 30, 2007, the Los Angeles Times reported that Carona had been indicted on federal corruption charges, alleging that he used his office for personal financial gain and urged a former associate, former Assistant Sheriff Donald Haidl, to testify falsely before a grand jury. Federal prosecutors also charged him with instructing an employee in 2005 to lie to investigators about a sexual relationship she had with him as further evidence of tampering with witnesses. The indictment alleged that Carona received gifts including a boat, boxing tickets, and over $112,000 in cash in illegal, unreported gifts. Were he to have been convicted on all counts, Carona could have received 105 years in prison. In the Federal Indictment Prosecutors alluded to extramarital affairs titillating the media. A four-part Full Disclosure Network Emmy-nominated TV series featured an exclusive interview with Sheriff Carona immediately following his arraignment and focused on prosecutor tactics and federal sentencing procedures.
Trial
His trial was initially scheduled to begin on August 26, 2008, in Santa Ana. Although his attorneys had asked for the trial to be delayed an additional two months, the trial was delayed to October 28 because the judge said the case was "so unusual and complex". Carona pleaded not guilty to all charges and claimed he would be vindicated at the trial. The trial relied prominently on the testimony of Donald Haidl, a former partner of Carona. He has said, "Carona's political team developed 'the friend's list' through which Carona authorized reserve deputy badges in exchange for $1,000 campaign donations." It also features Carona saying of Orange County District Attorney Tony Rackauckas "He just wants to take me out. He thinks I'm weak." The Los Angeles Times reported that more than 12,000 pages of witness statements had been turned over by the government and over 100 witness may be called by the prosecution. On January 14, 2008, Carona announced that he would resign the sheriff's post to concentrate on his defense. Carona was replaced on an interim basis by Assistant Sheriff Jack Anderson and then replaced permanently by retired Los Angeles County Sheriff's Department Division Chief Sandra Hutchens as the county's 12th sheriff.
Conviction
On January 16, 2009, a federal jury convicted Carona of a single count of witness tampering and acquitted him of charges of mail fraud, conspiracy, and another count of witness tampering. He could have faced up to twenty years in prison. On April 27, 2009 Carona was sentenced to 66 months in prison.
Pension
In July 2010, it was revealed that Carona received over $215,000 in pension checks the previous year, despite his felony conviction. Carona became eligible for his pension at age 50. A 2005 state law denies a public pension to public officials convicted of wrongdoing in office. However, that law only applies to benefits accrued after December 2005. Carona is also entitled, by law, to medical and dental benefits.
Incarceration
On January 25, 2011, Carona turned himself in to serve his sentence at Federal Correctional Institution, Englewood, in Colorado, where he would serve five years and six months. Carona's "actual or projected" release date was November 8, 2015. On May 14, 2015, The Orange County Register reported that Carona was released from prison, earlier than expected.