The noose is beginning to tighten around diamantaire-turned-fugitive Nirav Modi, the key accused behind over Rs 14,000 crore fraud at the Punjab National Bank (PNB). A report by the US bankruptcy examiner John Carney reveals how Modi was involved in a number of fraudulent transactions as well as round-tripping of funds through the shell companies he owned.
Take the case of a 3.27 carat yellow diamond that was shipped four times - exported three times - in a five week window. According to the dossier submitted in the New York court, the value of the gem at the time approximated $188,000. On August 8, 2011, Firestar Diamond Inc (FDI, previously Firestone Inc.) sold the stone to Fancy Creations Company Ltd. for $1,098,802.
Approximately three weeks later, Solar Exports, reportedly a partnership formed by the Nirav Modi family trust, exported the diamond back to FDI for a much lower $183,087 - although closer to its actual value. Six days later, FDI again exported the diamond Fancy Creations Company, Ltd for $1,156,043 - over $57,000 more than the original inflated price.
Finally, two weeks later, Modi-owned A. Jaffe sold the gem to Sandeep Mistry's company, World Diamond, for $1,218,991. A neat $120,189 profit in less than 40 days. Incidentally, the reviewed records also show that FDI got instructions on moving the diamond from Mistry, a Firestar India employee.
That's just one example. Carney's report estimates that Modi's practice of round-tripping totalled a whopping $213.8 million between 2011 and 2017, which is the time frame of the PNB fraud, too. Moreover, Modi reportedly fraudulently borrowed approximately $4 billion over the course of a few years by manufacturing fraud transactions to import diamonds using his web of 20 shell companies.