updated 8/25/2006 7:08:25 PM ET 2006-08-25T23:08:25

A veteran U.S. diplomat will spend the weekend in jail on charges he traded work visas for lavish dinners, New York City hotel rooms, jewelry and at least one Las Vegas trip with exotic dancers.

Michael John O'Keefe, the deputy nonimmigrant visa chief at the U.S. Consulate in Toronto, was indicted on bribery and conspiracy charges Friday. International jewelry executive Sunil Agrawal, a native of India, also was charged but has not been arrested.

Since the terror attacks of Sept. 11, 2001, authorities have worked to tighten controls over nonimmigrant visas including those granted to students, tourists and workers. Friday's indictment, however, describes a scheme in which O'Keefe fast-tracked applications for Agrawal's company, New York-based STS Jewels.

O'Keefe personally handled STS applications, going so far as to approve some that had been rejected, even when a subordinate noted that terrorists use jewelry to raise money, the indictment says. O'Keefe awarded 21 visas to STS employees, according to the indictment.

In exchange, Agrawal allegedly lavished him with gifts.

On Jan. 4, 2004, in the weeks leading up to one visa application, Agrawal allegedly wrote O'Keefe an e-mail that said, "Your hotel booking is confirmed in Hilton Millennium in Midtown Manhattan. Two rooms are booked in your name. The car service will be there at the airport to take you to the hotel."

The next day, prosecutors said, O'Keefe received a $3,000 ring from Agrawal.

Lavish Las Vegas vacation
In June, after renewing visas for five STS managers, O'Keefe and two exotic dancers flew to Las Vegas, prosecutors said. Agrawal is accused of paying more than $5,400 for airfare, hotels, meals and incidentals for the trip.

O'Keefe, 59, appeared stunned in court on Friday. He slumped his head into his hands when prosecutors said he faced up to 15 years in prison. He did not enter a plea.

Authorities seized his diplomatic passport, but a federal magistrate said O'Keefe could not be released until his civilian passport could be located. A hearing was set for Monday.

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