Nirav Modi’s Brother Charged With $2.6 Million Diamond Fraud in NY
Nehal Modi was charged in the state supreme court with “grand larceny in the first degree” .
Nehal Modi, the brother of fugitive jewellery merchant Nirav Modi, has been charged by a New York prosecutor in an alleged $2.6 million fraud carried out through a multilayered scheme to cheat one of the world's biggest diamond companies.
What are the Charges Against Nehal Modi in the US?
Nehal Modi has been charged in the New York supreme court with "grand larceny in the first degree" for allegedly "fraudulently obtaining over $2.6 million worth of diamonds from a diamond wholesale company located in Manhattan," reported IANS quoting prosecutor Cy Vance.
The crime of grand larceny in the first degree under New York State laws is theft involving more than $1 million and it carries a maximum penalty of 25 years in prison.
According to the New York Post, Modi told the court he was not guilty of the charge and was released without bail.
What’s This Case All About?
The alleged crime dates back to 2015 when Nehal Modi asked a company identified as LLD Diamonds USA to obtain over $2.6 million worth of diamonds with "false representations", some of which he pawned for loans and sold the rest as steeply discounted prices, IANS quoted the prosecution stating.
The prosecution reportedly claimed that in March 2015 Modi first asked the company to give him diamonds worth about $8,00,000 claiming they were to be shown for potential sale to a company identified as Costco Wholesale Corporation, a chain that gives price discounts to its customers who join as members.
Modi then claimed that Costco agreed to buy the diamonds and LLD gave it to him on credit to be paid within 90 days, said the prosecution.
But he pawned the diamonds to another company for a short-term loan and came back to LLD to get more diamonds, this time worth $1 million, claiming that Costco had agreed to buy them, according to the prosecution.
He made some payments to LLD but used the major portion of the proceeds to for business and personal expenses and in order “to cover his fraud, Modi falsely claimed that he was he was having payment problems because of a “Costco fulfilment error,” prosecutors said.
In August, Modi returned to LLD "with the false claim" that Costco wanted to buy more diamonds and after picking them up, he pawned some of them and sold the rest to retailers at a "steep discount", according to the prosecution.
By the time when LLD discovered the fraud and demanded payment or return of the diamonds, Modi had already pawned or sold off all the gems and spent most of the money, prosecutors said.
LLD then filed a complaint with the Manhattan prosecutor's office.
What are the Other Pending Cases Against Nehal Modi?
Nehal Modi who is a Belgian national, is also wanted in India in connection with the Rs 13,500 crore Punjab National Bank Fraud case. In September, the Interpol issued a Red Corner Notice against Nehal Modi after the ED probe alleged that Nehal Modi had intentionally assisted his brother, Nirav Modi, in concealing the alleged laundering of money and destroying evidence in the case.
The Enforcement Directorate had filed a charge sheet against him before the special PMLA court in Mumbai and the court had issued two separate open ended non bailable warrants against Nehal Modi.
Nehal Modi was allegedly looking after the affairs of Twin Fields Investments Ltd and Bailey Banks and Biddle for Nirav Modi. IANS quoted an ED statement that said, "Both these companies had received around $50 mMillion from dummy companies of Nirav Modi which in turn received this fund from the fraud committed on PNB. For Nirav Modi, he became the protector and investment advisor of The Ithaca Trust, headed by his sister Purvi Modi.”
The ED had also alleged that after the case broke out, Nehal Modi had dealt with the proceeds of crime and had taken away diamonds having value of $6 million and 150 boxes of pearls from Hong Kong, cash of 3.5 million UAE dirhams and 50 kg gold from Dubai.
(With inputs from IANS)
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