Fugitive diamantaire Nirav Modi’s brother Nehal arrested in US on India’s request
Nehal Deepak Modi, 46, played a key role in the ₹6,498 crore Punjab National Bank (PNB) swindle in which his elder brother, Nirav Modi, is currently lodged at a UK prison and is facing extradition
New Delhi: Fugitive diamantaire Nirav Modi’s brother, Nehal Modi, has been arrested in the United States based on an extradition request of the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI), a development Indian officials described as “significant”.
Nehal Deepak Modi, 46, played a key role in the ₹6,498 crore Punjab National Bank (PNB) swindle in which his elder brother, Nirav Modi, is currently lodged at a UK prison and is facing extradition.
Officials familiar with the development said that Nehal, a Belgian citizen, was arrested by the U.S authorities on Friday, a day after he was released from a prison in New York, where had been serving sentence since July 2022 in a $2.6 million diamond fraud with a U.S firm.
A U.S Supreme Court jury sentenced Nehal Modi to 3-9 years in a grand larceny in the first degree case. He was accused of fraudulently obtaining diamonds from Manhattan-based wholesale company, LLD Diamonds USA, LLC (“LLD”). He had made false representations regarding a purported deal with Costco Wholesale Corporation to obtain more than $2.6 million worth of diamonds from LLD, also known as Lev Leviev Diamonds, between March and August 2015, according to the July 29, 2022 indictment seen by HT.
“The United States Department of Justice informed us that Nehal Modi has been arrested on July 4, a day after he was released from the prison, based on our extradition request (both CBI and ED’s). An extradition request was sent in 2022 and for the past one and a half months, we were providing various clarifications to the American authorities and they finally arrested him,” said an ED officer, who didn’t want to be named.
“It’s a significant development because all three key perpetrators of the PNB case - Nirav Modi, Mehul Choksi and Nehal Modi are now lodged in prisons in the UK, Belgium and the US, respectively, based on efforts and prosecutable evidence for extradition provided by Indian agencies,” the officer added.
While Nirav Modi was arrested in London in 2019, Mehul Choksi was taken into custody in Antwerp in April this year.
As per the complaint filed by the U.S prosecutors, extradition proceedings are being pursued on two counts: one count of money laundering under Section 3 of the Prevention of Money Laundering Act (PMLA), 2002, and one count of criminal conspiracy under Sections 120-B and 201 (destruction of evidence) of the Indian Penal Code (IPC), said a second officer.
The next date of hearing on extradition is July 17, when Nehal may apply for bail which U.S prosecutors have assured Indian officials they will oppose, he said.
Wanted since 2018, when the PNB swindle came to the light, Nehal Modi was earlier said to be based in Belgium and then later moved to the US.
An Interpol red notice was issued against him in July 2019 based on ED’s request.
“He played a key role in laundering proceeds of crime on behalf of Nirav Modi, who is also facing extradition from the UK. He assisted in concealing and transferring large sums of illicit funds through a web of shell companies and overseas transactions, in violation of Indian laws,” said the second officer.
In the PNB case, in which Nirav Modi swindled ₹6,498 crore, ED has already traced proceeds of crime worth ₹2,626 crore in India and abroad.
Officials said charge sheets have been filed against Nehal in May 2018 and February 2019.
It has been alleged by the agencies that Nehal Modi helped Nirav in destroying the evidence after the PNB scandal broke out in January 2018 as well as launder money on his behalf.
Nehal, according to the ED officer cited above, was looking after the affairs of companies - Twin Fields Investments Limited, Bailey Bank and Biddle for Nirav Modi. “Both these companies had received around USD 50 million 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’. This trust got the tainted funds to the tune of USD 30 million after extensive layering and two immovable properties have been purchased in USA from these tainted funds,” said the ED officer.
After CBI and ED started scanning their offices abroad with the help of international agencies, Nehal dealt with the proceeds of crime and took away diamonds having value of US dollars 6 million and 150 boxes of pearls from Hong Kong and cash of 3.5 Million dirham and 50 Kg gold from Dubai, according to a statement issued by ED in 2019.
Nehal also arranged the escape of Nirav’s trusted man – Mihir Bhansali from Dubai and booked tickets of several dummy directors for Cairo so that Indian agencies would not catch them.
He was also involved in destroying the digital evidence like mobile phones and the server pertaining to Nirav Modi’s companies in Dubai.
Nehal is also accused of helping Mehul Choksi in laundering money. “Nehal Modi was incharge of M/s Samuels Jewellers INC and Diamlink Inc. At his instance, these companies had received around USD 19 million of proceeds of crime in the guise of royalty, advances etc from Dubai based shell companies of Mehul Choksi,” ED said in 2019.
“Nehal Modi was personally overseeing that all the accounts, records were destroyed and was influencing the employees/witnesses in respect of money trail of the proceeds of crime in the case. He destroyed the digital evidence (Mobile Phones and Server) pertaining in Dubai. He intimidated the witnesses and sent them to Cairo and in Cairo, their passports were taken over at his instance. Witnesses have been forced to sign some false papers in Cairo at his instance and in one case, a witness has been offered ₹20,000,00 by himself (Nehal Modi) in lieu of tendering false testimony before the judicial authorities of Europe,” said a second ED officer.
One of the co-accused sent to Cairo was Subhash Parab, who was brought by Indian authorities in April 2022 through extradition.
“When the case came to light in January 2018, Nehal Modi told Parab and other senior directors in the company to leave India as they may be questioned by Indian investigation agencies. He left for Cairo after Nehal arranged his travel and since then, agencies have been pursuing his extradition,” said a CBI officer.
