I base the "federal crime" comment on an article in the Washington Post
here where the FTC talks about extending the rules regarding word of mouth marketing to include editorial web content. Paying for a link creates a business relationship between the two entities, and hiding that relationship can cause a consumer to infer that the web site is an impartial third party. Some more information about web link disclosures required in the United States can be found
in this PDF document, although the PDF predates the current move to consider web site links under word of mouth marketing rules. Also, several countries have taken or threatened legal action against Google for failure to properly disclose sponsored links, most recently Australia.