MOSCOW (AFP) - Russia and the United States were on Friday embroiled in a new diplomatic dispute after Moscow reacted furiously to charges launched in the United States against 49 current and former Russian diplomats and their wives over a US$1.5 million (S$1.9 million) fraud.
Deputy Foreign Minister Sergei Ryabkov said in a statement to Russian news agencies that Moscow had many claims against the behaviour of US diplomats in Moscow but had preferred not to bring them into the public sphere.
"We categorically reject the charges against the staff of Russian diplomatic institutions in the United States," he was quoted as saying by the ITAR-TASS news agency, saying it was "illegal" for diplomats to have been watched by the authorities in this way.
"If the American authorities have claims against our citizens... they should have been made first through diplomatic channels. This is no more than cheap PR and an attempt to fulfil an order by Russophobes in the US," he added.
Mr Ryabkov hinted that Russia had many allegations it could lay against American diplomatic staff if it so desired but said Moscow had preferred stay quiet.
"We have many claims against how American embassy staff work and act. But we do not want to go down the path of a rhetorical war of mutual accusations," he said.
The scandal risks causing a new crisis in US-Russia relations which have already been scarred by Russia's decision to grant asylum to US intelligence leaker Edward Snowden and a host of other issues including human rights.
There had been signs in the last weeks of a better atmosphere, particularly after Washington and Moscow worked together on a deal to rid Syria of its chemical weapons and have attempted to realise a plan for a peace conference on the Syrian conflict.
Mr Ryabkov said the case had been created by those in the United States who wanted to spoil constructive trends in US-Russia relations.
"Someone in Washington needed to spoil the atmosphere - we cannot see this any other way."
Russian senator Ruslan Gattarov described the charges as "petty revenge on the part of the hawks in the State Department".
The alleged scam took place between 2004 and August 2013, when the suspects were based at the Russian mission to the United Nations, the Russian consulate and the Russian trade mission, all in New York.
All the defendants have diplomatic immunity and none have been arrested following a probe by the Federal Bureau of Investigation (FBI).
They are accused of lying about their true income to claim benefits while splurging on tens of thousands of dollars worth of products in designer shops such as Tiffany & Co, Jimmy Choo and Prada.
Prosecutors say the group obtained almost US$500,000 from Medicaid, a programme earmarked for low-income American families, under provisions that pay out funds for children born in the United States.
A total of US$1.5 million in benefits was illegally obtained by the Russians and dozens of other co-conspirators, who were not named in the complaint.
Russian protest leader Alexei Navalny, who has accused President Vladimir Putin and his top allies of endemic corruption, seized on the charges as proof of the extent of graft within the foreign ministry.
"Now we have full confirmation that the rank-and-file of Russian diplomacy lives fully in line with the approaches of the Kremlin leadership," Navalny wrote on his Live Journal blog.
"Since the 1970s in the USSR, diplomacy in 'prestigious capitalist countries' turned into a way of handing out jobs for the children of the nomenklatura," he added.