NEW YORK: 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. Announcing the charges against Modi, the prosecutor Cy Vance said, "Modi will face the clarity of a New York Supreme Court indictment."
Modi was charged in with "grand larceny in the first degree" for "fraudulently obtaining over $2.6 million worth of diamonds from a diamond wholesale company located in Manhattan," said 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. Modi told the court he was not guilty of the charge and showed a short video, in which he was seen walking with a man who may be his lawyer in what appears to be the corridor of a court building. Asked about the case, he replied, "There's nothing about the case."
Asked about the Interpol notice, the man accompanying him, said, "We are not discussing anything about the case, I told you that." Modi is wanted in India in connection with an alleged $1.9 billion fraud involving Punjab National Bank, and at the request of India, Interpol has issued a Red Notice. Under the judicial procedure in New York, the prosecutors first presented the case to a grand jury which indicted him while finding that there were enough grounds to charge him.
The alleged crime goes back to 2015 when 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, the prosecution said in a statement. LLD Diamonds that it "is the world's largest privately held diamond manufacturer and cutting group – entirely independent of external suppliers, having its own widespread sources of rough goods through ownerships in mines around the world." The prosecution said that in March 2015 Modi first asked the company to give him diamonds worth about $800,000 claiming they were to be shown for potential sale to a company identified as Costco Wholesale Corporation.
Modi then claimed that Costco agreed to buy the diamonds and LLD gave it to him on credit to be paid within 90 days, the prosecution said. 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 for business and personal expenses and in order "to cover his fraud, Modi falsely claimed that 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,” according to the prosecution.
