• · Fraud allegations were brought against Modi and his associates by the trustee of the three companies with which they were earlier involved
  • · At present, India is attempting to hand over Modi to the jurisdiction on charges of PNB money laundering
  • · Two simultaneous cases are being operated against Modi by CBI and ED

On Friday, a United States bankruptcy court rejected pleas by Nirav Modi and two of his associates to drop the fraud allegations against them, which were earlier brought by the trustee of the three companies which were indirectly owned by them. Richard Levin, the trustee of the three corporations, who has been appointed by the court, has made the allegations in a New York court.

The names of the corporations previously owned by the fugitive diamond merchant are Firestar Diamond, Fantasy Inc, and A Jaffe. A minimum compensation of USD 15 million was demanded by Levin in order to reimburse the debtors of Nirav Modi, Ajay Gandhi, and Mihir Bhansali. The pleas for terminating the fraud charges which arrived from Modi and his associates were rejected by Sean H Lane, the New York Bankruptcy Court Judge of the Southern District.

Presently there are attempts by India to hand over Modi, who is jailed in the UK, to the jurisdiction on charges of fraud and money laundering in the Punjab National Bank (PNB) scam hubbub. According to the Indian American attorney Ravi Batra, “SDNY Bankruptcy Court Judge Lane in a clear decision denied defendants Modi, Bansali and Gandhi’s motions to dismiss US Trustee Richard Levins amended complaint in the adversary proceeding arising out of Modi’s initial chapter 11 bankruptcy petition, alleging fraud, breach of fiduciary duties, RICO and related state law claims.”

As per the orders of the court, the petition of Levin attempted to make amends to the damages inflicted on the debtors and their estates by Modi and his associates, ahead of his six years of forgery at the international level. The embezzlement scheme which was planned by Modi led to dissipating millions of dollars of his debtors and gradually destroyed their business values.

The court has stated that Nirav and his associates have been indulged in a scheme to “obtain loans, credits, or other funds under false pretences and without collateral” from the PNB and various other banks, between 2011-18. Financial instruments such as letters of undertaking (LoUs) were used in the bank fraud. Two sets of criminal proceedings are being operated against Modi simultaneously.

The first one includes the CBI case, which is dealing with the Punjab National Bank (PNB) money laundering, through securing forged letters of undertaking (LoUs). The ED case associated with the laundering of the proceedings of the forgery stands to be the second one. There have been additional charges against the diamond merchant of “causing disappearance of evidence” and frightening the witnesses. The charges have been attached to the CBI case.


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