The charges against Craig, who was White House counsel during the Obama administration, concern work he performed for Ukraine in 2012 while he was a partner at top law firm Skadden, Arps, Slate, Meagher & Flom LLP.
Craig is charged with giving false information to the justice department officials who regulate work in the USA by lobbyists, lawyers and other representatives of foreigners under the Foreign Agents Registration Act (Fara).
He is the first prominent Democrat to be charged with a crime stemming out of special counsel Robert Mueller's probe into Russian collusion.
Skadden's client, the Ukrainian Ministry of Justice, hired it to write a report on the trial of Yulia Tymoshenko, a former prime minister of Ukraine, a project on which Craig was the lead attorney.
Craig and the firm did not register as foreign agents to conduct this work, apparently believing it was unnecessary as long as it avoided doing direct public relations work on behalf of the Ukrainian government. "I think we don't have to with this assignment, yes?" Based on his statements, the law firm filed false statements about its public relations contacts to the Department of Justice.
Craig was aware of the registration requirements under the Foreign Agents Registration Act but didn't want to register, the prosecutors say.
They said that prosecutors from the Southern District of NY had already declined to bring the case. "CRAIG's letter did not disclose that he and the Law Firm would be paid more than $4 million for their services and that the money would be paid by the Private Ukrainian".
The government said Thursday that Craig was indicted for making false statements and concealing material information about Ukraine lobbying activities.
SpaceX launches mega rocket, lands all 3 boosters
Until SpaceX came along, rocket boosters were usually discarded in the ocean after satellite launches. The roads were also jammed for Wednesday night's launch attempt, which was scuttled by high winds.
Craig's lawyers, William Taylor and William Murphy, called the indictment "unfair and misleading".
After Skadden was mentioned in news coverage, the Justice Department sought information from the law firm about whether its work, including the media contact, required the lawyers to have registered as foreign lobbyists.
Mueller's team began the investigation into Craig but subsequently sent the matter to the Southern District of NY and then the U.S. Attorney for the District of Columbia for further consideration.
A January settlement between Skadden and the Justice Department singled out Craig-claiming he made "false and misleading" statements to other Skadden attorneys and the Justice Department regarding his work on the report.
The special counsel has already successfully prosecuted a case connected to the Ukraine report at the center of Craig's case.
The development comes after lawyers for Craig said Wednesday that they expected him to face federal charges in coming days linked to jailed lobbyist Paul Manafort, the Wall Street Journal and Washington Post reported. They said they would fight any prosecution.
"That would do enormous damage to the credibility" of the report, Craig wrote in an email to other Skadden attorneys, according to the indictment.
FARA is a decades-old law meant to allow Americans to know when foreign entities are trying to influence public opinion or policymakers.
In the last few years, the Justice Department has brought several high-profile prosecutions involving FARA.