A New York Supreme Court has indicted Nehal Modi, Nirav Modi’s younger brother, of fraudulently obtaining over $ 2.6 million in diamonds from LLD Diamonds, USA, one of the world’s largest diamond companies, PTI reported .
Nehal, 41, who comes from a well-known family in the diamond industry, was reportedly introduced to the president of LLD Diamonds through industry partners.
In 2015, between March and August, Nehal managed to obtain over $ 2.6 million worth of diamonds from LLD on favorable loan terms and shipments by making false claims and then liquidating the diamonds for his own use.
It can be noted that in 2019 Interpol issued a Red Corner Notice against Nehal Modi, as mentioned in the indictment filed by the enforcement agency in the PNB scam in which his brother Nirav Modi is the main suspect. Nehal allegedly helped Nirav divert money to Shell companies.
Here’s how he defrauded LLD Diamonds, according to the indictment, court records, and statements made in the record in the Manhattan court:
> In March 2015, he reached out to LLD claiming he had business negotiations with Costco Wholesale Corporation requiring diamonds from LLD that Costco may purchase.
> Then Nehal incorrectly informed LLD that Cotsco had agreed to buy the diamonds, whereupon LLD allowed him to buy them on credit. Full payment was required within 90 days.
> But Nehal mortgaged the diamonds to get short-term loans.
> In the meantime he has made some payments to LLD but most of the proceeds have been used for personal expenses.
> He also falsely alleged that he had encountered payment problems due to a “Costco performance error” and repeatedly promised to meet the balance.
> In August 2015, Nehal LLD falsely announced that Costco wanted to buy additional diamonds. This time, LLD allowed him to take the additional diamonds on delivery, explicitly indicating that he was not authorized to sell the diamonds without LLD’s approval.
> In the event of a sale, LLD also required a partial payment in advance, as Nehal’s outstanding balance at that point was almost USD 1 million.
> LLD eventually uncovered the fraud and asked him to pay his balance immediately or return the diamonds. However, he had already sold or pawned all of the diamonds and spent most of that revenue, prompting LLD to report the fraud to the Manhattan Attorney’s Office.
Nehal Modi is a Belgian citizen and speaks English, Gujarati and Hindi.
(With PTI inputs)