Chatwal, 70, a Padma Bhushan awardee and major fundraiser for former US Secretary of State Hillary Clinton, had pleaded guilty in April this year to violating the Federal Election Campaign Act by making more than USD 180,000 in campaign donations to three candidates through straw donors and to witness tampering.
He was sentenced today by US District Judge I Leo Glasser in the Eastern District of New York federal court here.
He repeatedly apologised to the judge for his behaviour and said he had been humbled by the experience.
"I apologise for what I have done to my family. I have let them down terribly," Chatwal told the judge.
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The judge imposed a sentence of probation of three years and the USD 500,000 fine and said Chatwal should continue doing the community service that his friends and family have detailed in nearly 300 letters of support to the court.
After the sentencing Chatwal told PTI that he is very happy with the verdict.
Ahead of the sentencing, Chatwal's lawyers had submitted a memorandum seeking leniency, urging the court to weigh Chatwal's age and "lifetime of contribution" to others and the impact imprisonment would have on his family and community in sentencing him.
They had requested that a sentence of probation with substantial community service be imposed on Chatwal to enable him to "make amends by continuing to serve others and take care of his sons," Vivek and Vikram who depend on him to an "exceptional degree" due to their medical disabilities.