NEW YORK, USA – In a significant diplomatic victory for India, Nehal Modi, the brother of fugitive diamond merchant Nirav Modi and an accused in the colossal Punjab National Bank (PNB) fraud case, has been arrested in the United States. Nehal Modi, a Belgian national, was taken into custody on July 4, according to information released by the U.S. Department of Justice.
This arrest marks a crucial development in India’s ongoing efforts to bring to justice those involved in the PNB scam, which is estimated to be around ₹13,500 crore (approximately $1.6 billion USD).
Charges and Legal Proceedings
According to the criminal complaint filed by U.S. prosecutors, Nehal Modi faces two serious charges: money laundering under Section 3 of the Prevention of Money Laundering Act (PMLA), and criminal conspiracy coupled with destruction of evidence. These charges stem from his alleged involvement in concealing and transferring illicit funds generated from the PNB fraud.
Law enforcement sources indicate that Nehal Modi’s arrest was a result of close coordination between Indian investigative agencies – primarily the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) – and their U.S. counterparts. The U.S. Department of Justice confirmed the arrest, stating that the extradition request from India would now proceed through the American legal system.
Role in the PNB Scam
Both the CBI and the ED have been investigating Nehal Modi, along with his brother Nirav Modi and their uncle Mehul Choksi, for their alleged roles in perpetrating the PNB fraud through the issuance of fraudulent Letters of Undertaking (LoUs). Investigations by Indian agencies reportedly revealed Nehal’s “pivotal role” in laundering the proceeds of the crime on behalf of his brother, Nirav Modi.
Specifically, he is accused of assisting in the concealment and transfer of large amounts of illegal funds through a complex web of shell companies and intricate overseas transactions, all designed to obscure the origins of the criminal proceeds.
Updates on Other Accused
The arrest of Nehal Modi comes as India continues its pursuit of the other key accused in the PNB case:
- Nirav Modi: The primary accused, Nirav Modi, remains in a London prison. While the UK High Court has already approved his extradition to India, the process has been significantly delayed by multiple appeals filed by his legal team. He was declared a ‘fugitive economic offender’ in India in 2019.
- Mehul Choksi: His uncle, Mehul Choksi, was reportedly arrested in Antwerp earlier this year, following an extradition request from India. Choksi had fled India in 2018 and has since been residing as a citizen of Antigua and Barbuda.
Extradition Proceedings and Bail Hearing
The next hearing for Nehal Modi’s extradition proceedings is scheduled for July 17. At this hearing, Nehal Modi is expected to apply for bail. However, U.S. prosecutors have already indicated their intention to “vigorously oppose” his bail application, citing the severity of the charges and the flight risk involved.
This arrest underscores the determination of Indian authorities to pursue financial offenders globally and highlights the increasing international cooperation in combating white-collar crime.
