PNB won't be able to recover money from Nirav Modi, Mehul Choksi; fraudsters acted like mafia, used global network to stash jewels

  • Top sources said the value of diamonds seized by the Enforcement Directorate (ED) will depreciate further as it has come to the light that the precious pieces were already smuggled out by Nirav Modi days before the central probe agency swooped down on his showrooms

  • The investigators have unearthed evidence suggesting that exquisite diamonds and money was shipped discreetly with the help of Modi's accomplices adopting the modus operandi of old school mafia network and whatever is left for auctioning is not as grand as the ones shipped out

  • The entire conspiracy was hatched by Nirav Modi and his team involving not more than 25 people, who communicated through Whatsapp and a private server

New Delhi: Punjab National Bank (PNB) and other financial institutions allegedly defrauded by Nirav Modi and his uncle Mehul Choksi will not be able to recover the money lent to the duo running into thousands of crore despite the liquidation of their companies, sale of seized diamonds and other properties.

Rare paintings, exquisite wristwatches and luxury cars belonging to fugitive diamantaire Modi will be auctioned from Thursday (today). The sale of 112 assets is being done by Saffronart on behalf of the Enforcement Directorate through a live auction, which will be followed by an online one for 72 items.

Modi, who has allegedly defrauded state-run Punjab National Bank of over Rs 14,000 crore, is currently lodged in a British jail.

Top sources said the value of diamonds seized by the Enforcement Directorate (ED) will depreciate further as it has come to the light that the precious pieces were already smuggled out by Nirav Modi days before the central probe agency swooped down on his showrooms. What was left behind was inferior-quality diamonds.

The investigators have unearthed evidence suggesting that exquisite diamonds and money was shipped discreetly with the help of Modi's accomplices adopting the modus operandi of old school mafia network and whatever is left for auctioning is not as grand as the ones shipped out.

The documents reviewed by Firstpost shows just a week before fleeing India, Modi shipped precious jewels worth more than Rs 100 crore to Hong Kong and subsequently further to an undisclosed location. Around 50 kilograms of gold was smuggled out from a Dubai office. The action was synchronized with showrooms abroad and the diamonds worth hundreds of crores were smuggled out from the UK and US on the basis of forged certificates and fake invoices.

Key players

Besides Choksi, Modi and his brothers, certain other individuals' names are now surfacing, who might have helped the Modis and Choksi to transport jewels away from the reach of creditors. On top of the list is are two close friends of Nehal Modi (younger brother of Nirav Modi), Anthony Allicok and Angelina Ypma—global president at Nirav Modi, once worked for Bulgari and Cartier. After the Central Bureau of Investigation (CBI) FIR in PNB fraud, Nehal Modi, brother of  Modi brought in Allicock to the company in February 2018. Around the same time, Modi from his hideout told Angelina to fraudulently ship millions of dollars’ worth diamonds from US to Hong Kong.

Since investigators were hot on the trails of Modi, Choksi and his relatives, all the players were told to use WhatsApp and secure email for communication. On 4 March 2018, almost a month after the CBI FIR, Modi's London boutique was emptied out and all the precious diamonds worth $6 million were shipped out the country. Significantly, he had taken substantial loans from two Indian public sector banks operating from London and the move, investigators said, was to offset the Indian bank's recovery proceeding in London.

 PNB wont be able to recover money from Nirav Modi, Mehul Choksi; fraudsters acted like mafia, used global network to stash jewels

File photos of Nirav Modi (left) and Mehul Choksi. Pic courtesy: YouTube

A month later on 5 April 2018, Allicock sacked two directors from Modi's US-affiliated office—Jacen Dinoff and Michael Goldman, after they refused to fraudulently transport diamonds out of America. The same day Allicock assumed all the powers and shipped $7 million worth diamonds to Hong Kong.

A week later on 13 April 2018, Nehal Modi on the direction of Nirav Modi brought in two individuals, Mark Motes, and Eddy Friedfeld to facilitate further smuggling of diamonds to defraud directors. That same month, $20 million diamonds were shipped to Hong Kong fraudulently and $4 million worth diamonds were stored in a courier service office, emptying the vaults of Nirav Modi’s showrooms. The certificate for diamonds was obtained from a firm known as 'Independent Gemological Laboratories' which is owned by Mehul Choksi through a shell company registered in British Virgin Island.

On 29 April 2018, Angelina directed all the funds available in UK to be transferred in an account held by Modi in Macau. Funds available in another account in Barclays Bank were transferred to an account in Hong Kong. Approximately, $ 115 million was stashed in shell firms floated by Nirav Modi in British Virgin Island, Cayman Island and Mauritius. Also, 150 boxes of pearls whose valuation is not known and diamonds worth several million dollars were smuggled out under the guise of legitimate transactions from Hong Kong. The ultimate destination has been kept under the wraps of investigating agencies.

Diamond smuggling operations

In the meantime, Modi and his group had filed bankruptcy proceedings in a US court and individuals and companies including PNB were lining up to file claims to recover their money from liquidation of his assets. In order to prevent the precious jewels falling in the hands of the US authorities, Modi's key associates in America, Ajay Gandhi and Mihir Bhansali faked their resignation from the firms and closely worked with Angelina to ship the diamonds out of the USA. Angelina told Gandhi and Bhansali that Modi had asked her to review the diamonds available in the US showroom. She reached New York on 7 May 2018. Angelina, with the permission of Gandhi and Bhansali, shifted several million dollars’ worth diamonds to a godown of a courier service before they were seized. Later, she visited the courier firm's storage and selected $5 million diamonds which were sent to Hong Kong in two shipments. The remaining diamonds were stuck as newly appointed Mark Motes and Eddy Friedfeld refused to sign on the papers.

On 1 June 2018, Motes and Friedfeld were sacked and Nehal Modi's friend Rochelle Miller was appointed as the sole director of Nirav Modi's affiliates in the US. Subsequently, Miller shipped out diamonds worth approximately $8 million out of the US. Later, a cargo of 17 bags containing diamonds worth several million dollars was shipped out of the US. In the documents, the cargo was shown as 'scrap value of $1.5 million’ while in reality, Nirav Modi and his team stashed hundreds of millions of dollars’ worth of diamonds before investigators could seize it.

The entire conspiracy was hatched by Nirav Modi and his team involving not more than 25 people, who communicated through Whatsapp and a private server, panemail.com. Nehal Modi played a key role in this entire conspiracy. Since agencies were looking for Nirav Modi, Nehal quietly traveled to various locations, including Dubai, London, Hong Kong, Mauritius to threaten employees and destroy evidence.

When the diamonds were being smuggled out and stashed abroad, the team communicated through another private server, cricketnow.live and each individual was given a codename to obscure their true identity. Later, the mobile phones of all the individuals involved in the shady operation were destroyed. Nirav Modi and his associate had also removed sensitive computers from their officers and they were sent to Hong Kong through the sea route. The entire criminal conspiracy was well-planned in advance by Nirav Modi and his associates to prevent banks from recovering their money and impede the investigation abroad.

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Updated Date: Mar 05, 2020 14:56:36 IST