Sara Netanyahu was charged on Thursday along with Ezra Saidoff, a former deputy director general of the Prime Minister's Office.
The Justice Ministry said in a statement that Mrs Netanyahu stands accused of misusing public funds by fraudulently ordering hundreds of meals to the prime minister's official residence worth over $100,000 while falsely stating there were no cooks on the staff.
Although the prime minister is not implicated in this case, the charges against his wife could have far-reaching consequences for his political standing and appear likely to damage his public image.
Sara Netanyahu is charged with misusing 359,000 shekels ($100,000; £77,000) for catering services at the prime minister's official residence.
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The indictment was also delayed from May until now after Nir Hefetz, a former close adviser to the Netanyahu family, provided new evidence against Sara Netanyahu. State funding for both is not allowed.
Israel's attorney-general is still weighing whether to indict him. The Israeli leader and his family have vehemently denied any wrongdoing.
Regardless, the attorneys contend, Netanyahu and his "family's economic expenses at the prime minister's residence will be paid by the State, as also mandated for the president's residence".
There's no indication the allegations against the prime minister or his wife are having an impact on voters.
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Her husband is also the subject of several corruption investigations which have caused a stir in Israeli politics, prompting speculation he may eventually be forced to step down. "There was no fraud or breach of trust or any offense".
Netanyahu is suspected of accepting lavish gifts from billionaire friends, and promising to promote legislation to help a major Israeli newspaper against its free rival in exchange for favourable coverage.
Sara Netanyahu was indicted and accused of "systematic fraud", Haaretz reports, including allegations that she knew about rules against ordering food when a cook was on staff - and that she tried to hide a cook's employment to cover up her actions.
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