Devyani Khobragade, 39, India's Deputy consul general in New York was charged with one count of visa fraud and one count of making false statements, which carry maximum sentences of 10 years and five years in prison, respectively.
In response to media queries, the Indian embassy said it had conveyed its "strong concern to the US government over the action taken against Khobragade" and urged the US side "to resolve the matter with due sensitivity," taking into account a pending court case in India and the diplomatic status of Khobragade.
Announcing the Indian diplomat's arrest in New York, Manhattan's Indian-American US attorney Preet Bharara alleged that she had caused "materially false and fraudulent statements" to be made in support of a visa application for an Indian national employed as a babysitter and housekeeper at her home in New York.
"Foreign nationals brought to the United States to serve as domestic workers are entitled to the same protections against exploitation as those afforded to United States citizens," he said.
"The false statements and fraud alleged to have occurred here were designed to circumvent those protections so that a visa would issue for a domestic worker who was promised far less than a fair wage," Bharara said.
"This type of fraud on the United States and exploitation of an individual will not be tolerated," he said.
But the Indian embassy statement's said action was apparently taken against Khobragade "on the basis of allegations raised by the officer's former India-based domestic assistant, Sangeeta Richard, who has been absconding since June this year."
The diplomat was taken into custody by law enforcement authorities in New York Thursday while she was dropping her daughter at school, it said. She was later released in the evening.
The embassy statement said: "The Delhi High Court had issued an-interim injunction in September to restrain Richards from instituting any actions or proceedings against Khobragade outside India on the terms or conditions of her employment."
"The US Government had subsequently been requested to locate Richard and facilitate the service of an arrest warrant, issued by the Metropolitan Magistrate of the South District Court in New Delhi under Sections 387, 420 and 120B of the Indian Penal Code," it said.
Bharara, on the other hand, alleged Khobragade had prepared and electronically submitted an application for an A-3 visa for an Indian
national, who was to be her personal employee at a monthly salary of $4,500 per month.
The First Employment Contract stated, among other things, that Khobragade would pay the unnamed "Witness-1 the prevailing or minimum wage, whichever is greater, resulting in an hourly salary of $9.75."
Diplomat was taken into custody by law enforcement authorities
However, prior to the signing of the First Employment Contract, Khobragade and Witness-1 had agreed that she would pay 30,000 rupees per month, which at the time was equivalent to $573.07.
She also instructed Witness-1 to say that she would work 40 hours per week, and that her duty hours would be 7 a.m. to 12:30 p.m., and 6.30 p.m. to 8.30 p.m.
She told Witness-1 that the First Employment Contract was a formality to get the visa, the statement alleged.
In fact, witness-1 worked for Khobragade as a household employee in New York from November 2012 through June 2013 for more than 40 hours per week and was paid less than 30,000 rupees per month, or $3.31 per hour, it alleged.