Billionaire Jeweler To The Stars Fighting Extradition To India Over $1.8 Billion Ponzi Scheme Bank Fraud

By on May 18, 2020 in ArticlesBillionaire News

Nirav Modi is an Indian jeweler whose designs have been worn by Hollywood and Bollywood stars. He's also a fugitive from the law in India due to his involvement in defrauding Punjab National Bank of $1.8 billion. Two bank employees were accused of initiating fraudulent loans to companies tied to billionaire jeweler Nirav Modi. It is believed that Modi used fake bank letters of understanding to get loans from Punjab National Bank. He's been on the run and seeking asylum in London for about two years. Now, he's fighting extradition to India, where he faces a maximum sentence of life imprisonment if found guilty.

Modi was arrested in London in March 2019. He denies the allegations of conspiracy to defraud and the conspiracy to conceal criminal property. Modi has a net worth of $1.7 billion. He's alleged to have used insiders and threats to kill witnesses in an international Ponzi Scheme. It is alleged Modi asked for them to use them to pay off exporters for pearls from Hong Kong. However, an attorney for the Indian government working the case against Modi told the court that huge sums of money given to Modi between 2011 and 2017 were instead distributed across other businesses in Modi's empire. It is alleged Modi then used the money to pay off old debt, creating a Ponzi scheme where investors are paid with funds from more recent investors.

Jamie McCarthy/Getty Images

Modi also shadily moved the ownership holdings for three companies he used in the fraud –Diamonds R Us, Solar Exports, and Stellar Diamond –so that Modi only appeared to hold less than 1% of the companies. He also used several fake names as directors to distance himself from the companies on the paperwork. Modi and his brother also apparently threatened key witnesses in his case with death.

Punjab National Bank is one of the largest banks in India. It reported fraud at one of its branches. The large-scale scam began in 2011 and occurred at just one of the bank's branches in Mumbai.

Modi's stores in India have been closed, his bank accounts, cars, and other assets have been seized. Five executives at his company have been arrested. More than $850,000 worth of gold, diamonds, precious metals, and stone jewelry were seized from Modi and his companies. More than half a dozen luxury cars, including a Rolls Royce Ghost and a Porsche Panamera, were also seized from Modi. Before his arrest, there was a global manhunt underway to locate him.

Modi left India in June 2018 and he was tracked down in March 2019 by the Daily Telegraph and arrested in London, where he'd been renting a home for nearly $21,000 a month. He has been in custody for 14 months in England.

Modi's fall from grace is stunning. Kate Winslet, Naomi Watts, and Rosie Huntington-Whiteley have worn his jewelry. Priyanka Chopra advertised his brand.

Modi's extradition hearing continues.

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