Nirav Modi Nirav Modi's brother charged with duping diamond wholesaler of $ 1 million in United States
New Delhi/IBNS: PNB fraud accused Nirav Modi's brother Nehal Modi, who is also wanted in the same case, has been accused of defrauding a company in the United States of diamonds worth $1 million, said media reports.
Modi made false representation to acquire diamonds worth over $2.6 million worth of the gems from LLD Diamonds USA on favourable credit terms and consignment and then liquidated them for his own ends, a December 18 statement from the office of the Manhattan District Attorney, Cy Vance Junior said.
He made some returns to the LLD from the proceeds but used the greater part of it to meet his personal needs, the statement added.
"While diamonds may be forever, this flawed scheme was not, and now Mr Modi will face the clarity of a New York Supreme Court indictment," Cy Vance Junior said in the statement on Friday.
Nehal Modi is a resident of Antwerp and is wanted in PNB Bank fraud case by CBI for destroying evidence in Dubai for concealing the tracks of the crime in which his brother swindled $ 2 billion from Punjab National Bank.
The District Attorney's office said the accused had duped LLD of the diamonds saying that he was pursuing a relationship with Costco Wholesale Corporation and needed the diamonds worth nearly $800,000 to present to Costco for a potential sale, the report added.
However, he lied to LLD that Costco had agreed to the deal and purchased the diamonds on credit from it but he pawned the diamonds to get a short term loan.
"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. 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," the statement said.
LLD ultimately realised that it had been conned and demanded the diamonds or payment of the balance. By then Modi had sold or pawned all the diamonds and spent most of the proceeds for his personal use.
The fraud was then reported to the Manhattan District Attorney's Office.
The New York Supreme Court has now indicted him with grand larceny in the first degree.
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