Ms Khobragade, 39, was held on charges that she allegedly caused a materially false and fraudulent document to be presented, and materially false and fraudulent statements to be made, to the US Department of State in support of a visa application for an the Indian national employed as a babysitter and housekeeper at her home in New York.
Ms Khobragade is currently employed as the Deputy Consul General for Political, Economic, Commercial and Women's Affairs at the Consulate General of India in New York.
"Foreign nationals brought to the US to serve as domestic workers are entitled to the same protections against exploitation as those afforded to US citizens," Manhattan US Attorney Mr Bharara 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. This type of fraud on the United States and exploitation of an individual will not be tolerated," he said.
Ms Khobragade was charged with one count of visa fraud and one count of making false statements, which carry maximum sentences of ten years and five years in prison, respectively.
She is expected to appear before US Magistrate Judge Debra Freeman.
The Visa Application stated that the Indian worker employed by Khobragade was to be paid USD 4,500 per month.
According to an employment contract, Ms Khobragade would pay the domestic help the prevailing or minimum wage, whichever is greater, resulting in an hourly salary of USD 9.75.
However, the domestic help worked for Ms Khobragade as a household employee from approximately November 2012 through approximately June 2013. The domestic help worked far more than 40 hours per week and was paid less than USD 9.75 per hour.
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