Arrested Indian Diplomat Insists She Did Nothing Wrong

PHOTO: Devyani Khobragade, Indias deputy consul general, attends the India Studies Stony Brook University fundraiser event in Long Island, New York, December 8, 2013.PlayMohammed Jaffer/SnapsIndia/Reuters
WATCH Indian Diplomat's Arrest Sparks International Incident

The "diplomatic nightmare" touched off by the arrest in New York of an Indian consular official is all a big mistake, a defense attorney told ABC News even as the prosecutor issued a strongly-worded defense of the arrest.

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Devyani Khobragade, her attorney Dan Arshack said, did nothing wrong, is entitled to immunity from prosecution and believes the State Department will make her case disappear before her next court appearance in January.

"From the beginning this was a diplomatic nightmare," Arshack said.

Preet Bharara, the U.S. Attorney for the Southern District of New York, said Khobragade "clearly tried to evade U.S. law designed to protect from exploitation the domestic employees of diplomats and consular officers."

Khobragade, 39, was accused of submitting falsified documents to obtain a work visa for a nanny, promising to pay $4,500 per month but in reality paying just $573 per month, little more than three dollars an hour.

She faces one count of visa fraud and one count of making a false statement.

Arshack said the Diplomatic Security Service agent who reviewed the visa application misread it. He said the monthly $4,500 is Khobragade's salary. According to the attorney the nanny was to be paid $9.75 per hour. She was paid $3.31 per hour because she had asked the balance be sent directly to relatives in India.

Khobragade was arrested outside her daughter's Manhattan school after she dropped off her daughter for class. Indian officials have complained she was strip-searched and held in a cell with common criminals, procedures in line with the policies of the United States Marshals Service.

The crisis has reached the highest levels of American government. Secretary of State John Kerry has tried to smooth things over by "expressing regret."

"As a father of two daughters about the same age as Devyani Khobragade, the secretary empathizes with the sensitivities we are hearing from India," the State Department said in a statement.

But Bharara gave no indication he would back down.

"One wonders why there is so much outrage about the alleged treatment of the Indian national accused of perpetrating these acts, but precious little outrage about the alleged treatment of the Indian victim and her spouse," he said.

The Indian Embassy issued a statement in response to Bharara's comment saying, "We need to keep in mind the simple fact that there is only one victim in this case. That victim is Devyani Khobragade - a serving Indian Diplomat on mission in the United States."

According to sources familiar with the case the nanny disappeared in June after she told the family she was going shopping. Khobragade tried to file a missing persons report with police. The nanny surfaced in July at the nonprofit Safe Horizons where an attorney asked Khobragade to pay money, let the nanny out of her job and arrange a new visa that would allow her to stay in the country on her own, requests the diplomat refused. Khobragade then called the State Department because the terms of the nanny's visa required her to work as a domestic employee or return to India.

Khobragade was released last week on $250,000 bail. Defense attorney Arshack said she is immune from prosecution.