In December, a jury indicted Modi on one count of grand larceny in the first degree – a charge that refers to the robbery or theft of property valued at more than $US1 million – over a series of transactions he undertook with US diamond dealer LLD Diamonds (LLD) in 2015 through his company Noble Titan Holdings.
According to court documents, Modi, 41, initially purchased diamonds valued at $US800,000 on consignment from LLD with the understanding that they were to be sold to discount retailer Costco.
Instead, prosecutors allege Modi pawned the diamonds in order to secure a short-term loan.
He then purchased a further $US1.8 million in diamonds from LLD – also on consignment – which were either pawned or sold to other retailers “at a steep discount”.
Modi previously faced civil litigation by LLD and paid back $US1.2 million, before claiming Costco had a “fulfilment error” which prevented him from settling the outstanding $US1.4 million balance.
The claim prompted LLD to report him to authorities.
In a statement, Cyrus Vance Jr, district attorney of New York County, said, “As alleged, Mr Modi conned a Manhattan diamond wholesaler into fronting him millions worth of diamonds for a purported deal with Costco that never existed. While diamonds may be forever, this flawed scheme was not.”
Modi’s legal representative Roger Bernstein told Rapaport News, “This is a commercial dispute. The district attorney’s charges are only allegations. The underlying facts will be shown in court.”
Grand larceny in the first degree is a class B felony under New York state law, and carries a minimum penalty of one to three years imprisonment.
Modi is the former CEO of Texas-based retail group Samuels Jewelers, which was wound up in 2019 shortly after its parent company, India’s Gitanjali Group, collapsed due to the INR2.8 billion ($AU51 million) Punjab National Bank (PNB) fraud.
Rapaport News reports that Modi is also facing charges in India in relation to the PNB fraud alongside his brother Nirav Modi and their uncle Mehul Choksi, the former chairman of Gitanjali Group.
Nirav Modi is currently in custody in the UK, awaiting his final extradition hearing later this month; Choksi resides in the Caribbean nation of Antigua, where he has obtained citizenship.
It was previously reported that Nehal Modi could not be extradited to India as he is a Belgian citizen; he was reportedly the subject of Interpol Red Notices in September 2019 and May 2020.
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