We've already explained what exactly could lead to Bernie serving jail time, but the TL;DR version is that during the sale of F1 commercial rights in 2005, Ecclestone allegedly bribed a banker to make sure his preferred buyer got the shares at a low cost.
If the allegations are true, that's not really all that kosher.
Ecclestone has now been served with the indictment, which is being translated into English and his team of lawyers will respond to. After they respond, German authorities will then decide if they will go through and prosecute Ecclestone.
If he is prosecuted, Bernie has said that he will almost definitely have to leave his position as the head of F1. That or he will most likely be removed from it.
We'll know more in the next few weeks once Bernie's lawyers respond to the indictment.