Nirav Modi employed these 6 steps to drain out PNB, lenders, customers

Nirav Modi, caught by London Police following an arrest warrant London’s Westminster Court, has a long record of fraudulent activity

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Nirav Modi

• Nirav Modi and his uncle Mehul Choksi made some bank employees accomplices in their crime
• PNB officers let the fraudulent duo’s employees log into others’ bank accounts
• The accomplices misused SWIFT
• The frauds successively got LoU to repay for previous year’s debt for 7 years
• Their fraud got exposed when their accomplices in the bank retired
• Modi and his uncle Mehul Choksi fled the country when their fraud made news

New Delhi: Diamond businessman Nirav Modi, accused of defrauding the Punjab National Bank (PNB), has been arrested. He was arrested in London last night (IST) following the Westminster Court’s arrest warrant against him.

Nirav Modi now has the option of getting a conditional bail from the court, but the list of his crimes is long.

Nirav Modi has been absconding for the past 15 months after defrauding different banks of India led by the PNB of Rs 13,000 crores. The PNB was on the verge of collapse due to his conspiracy. Its stock went crashing down with the disclosure of Modi’s escape.

Nirav Modi fled the country but, since then, the Indian government has been trying to drag him back home.

Allegations against Nirav Modi

  1. He involved some employees of the PNB to execute the fraud. CBI investigations have revealed that some corrupt officers of the PNB were sold out.
  2. The charm of this con was so much that bank employees would hand over their computers to his employees who would log into PNB’s accounts. When this news was out, it was feared that the entire digital system of the bank was compromised. In 2011, Modi and his colleagues had contacted a branch of PNB for import of diamonds without any credit. A bank issues a letter of undertaking (LoU) for payment of imports from abroad. This means that the bank agrees to pay Modi’s foreign supplier for 90 days by when Modi would need to make the repayment.
  3. Since 2011, Modi and his maternal uncle Mehul Choksi would take loans from some other bank and, to repay, they would seek an LoU from the PNB the next year. This fraud went on for seven years with the active connivance of the LoU issuing bank, that is the PNB.
  4. The scandal erupted when some corrupt officials of the PNB retired and then the company of Modi contacted the new officers to resume the old facility.
  5. Those who facilitated Modi’s acts of cheating took advantage of SWIFT (Society for Worldwide Interbank Financial Telecommunication). It is an inter-banking messaging system that foreign banks use to find loan details before issuing money.
  6. A man from Canada accused Nirav Modi of cheating too. He alleged that, by pretending to be a friend, Modi had sold two fake diamonds to a person named Alphonso. The dubious black ring cost Alphonso Rs 1 crore 48 lakhs. Worse, because of the fake ring, his engagement with a girl broke and he went into depression.

The Enforcement Directorate (ED) and the CBI are investigating the PNB scam case. The ED has so far seized assets worth more than Rs 4,765 crore of Mehul Choksi and Nirav Modi. Both the accused slipped out of the country as soon as their fraud became a big story in the media.