Nehal Modi, younger brother of fugitive diamantaire Nirav Modi, has been charged for fraudulently obtaining diamonds, worth over US$2.6 million in New York. The 41 year old has been indicted with Grand Larceny in the First Degree in a New York Supreme Court.
Manhattan District Attorney Cy. Vance Jr. said while diamonds maybe forever, this flawed scheme was not and Modi will face the clarity of a New York Supreme Court indictment. “My Office will not allow individuals who have the privilege of soliciting business in Manhattan’s iconic diamond industry to defraud our businesses or consumers,” he said in a statement.
Modi, as per the indictment, made false representations to obtain over US$ 2.6 million worth of diamonds from LLD Diamonds USA on favorable credit terms and consignment, and then liquidated the diamonds for his own ends. The District Attorney’s office said Modi had approached LLD claiming he was pursuing a relationship with Costco Wholesale Corporation and sought diamonds worth nearly $800,000 to present to Costco for a potential sale. But he lied to LLD that Costco had agreed to the deal and purchased the diamonds on credit from LLD. Modi then pawned the diamonds to secure a short-term loan.
The statement highlighted that between April and May 2015, Modi returned to LLD three additional times and took more than $1 million worth of diamonds for purported sales to Costco. “Modi made a series of payments to LLD, but used the majority of the proceeds for personal use and other business expenses,” it said. “To cover his fraud, Modi falsely claimed that he was encountering payment issues due to a Costco fulfillment error, and made repeated promises to satisfy the balance.”
LLD finally realized the fraud and demanded an immediate payment of the balance or return of the diamonds. The matter was reported to the Manhattan DA’s office. As such, the Interpol has issued a Red Corner Notice against Nehal on charges of alleged money laundering. This is being probed by the Enforcement Directorate.