“As alleged, Modi conned a Manhattan diamond wholesaler into fronting him millions worth of diamonds for a purported deal with Costco that never existed,” said District Attorney Cy Vance, Jr. “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.”
Nehal Modi allegedly made “false representations” to obtain more than $2.6 million worth of gems from LLD Diamonds USA on credit terms and then liquidated them for his own end.
The district attorney’s office said that Modi approached LLD Diamonds USA, claiming he was pursuing a relationship with Costco Wholesale Corporation and sought diamonds worth about $800,000 (Rs 5.89 crore) to present to the latter for a potential sale. “After LLD provided the diamonds, Modi falsely informed the company that Costco had agreed to purchase them,” a statement from the district attorney’s office said. “Subsequently, LLD allowed the defendant to purchase the diamonds on credit, with full payment required within 90 days.” Modi then pawned the diamonds at Modell Collateral Loans for a short-term loan.
The statement said that Modi returned to LLD three more times and got $1 million worth of diamonds. He then used the money for personal and 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,” Vance said.
LLD ultimately uncovered the fraud and demanded that Modi immediately pay his outstanding balance or return the diamonds. As Modi had already sold or pawned all of the diamonds and spent most of those proceeds, the company reported the fraud to the Manhattan district attorney’s office.
The New York Supreme Court has indicted him with grand larceny in the first degree.
Nehal Modi’s brother, Nirav Modi, who is also a diamantaire, is accused of swindling $2 billion (Rs 14.72 thousand crore) from the PNB and is wanted by the Central Bureau of Investigation in India. Nehal Modi himself is wanted by the CBI in a case related to the PNB scam, in which he is accused number 27 and charged with destroying evidence in Dubai to cover the tracks of the alleged crime, according to NDTV.