Nehal Modi Arrested in US: A Deep Dive into the Diamond Fraud and PNB Scam Connection

The arrest of Nehal Modi, a key figure linked to the infamous Punjab National Bank (PNB) scam, has sent shockwaves through global financial crime enforcement. Following his release from a New York prison where he served time for a $2.6 million diamond fraud, Modi was re-arrested on the basis of India’s extradition request. This blog explores the complex web of financial deception, shell companies, and international money laundering, all centering around the Nirav Modi–Mehul Choksi–Nehal Modi triangle.

🔍 Who is Nehal Modi and Why Was He Arrested Again?

• Nehal Modi is a Belgian citizen and younger brother of fugitive businessman Nirav Modi.
• He was convicted in July 2022 for defrauding LLD Diamonds USA of $2.6 million.
• Released in July 2025, but re-arrested by U.S. authorities based on an Indian extradition request.
• He faces charges under India’s PMLA and IPC sections 120-B, 201 (criminal conspiracy and destruction of evidence).
• Accused of laundering money and concealing assets tied to the ₹6,498 crore PNB scam.

💎 The $2.6 Million Diamond Fraud in Manhattan

• Between March and August 2015, Nehal made false claims about deals with Costco to obtain diamonds.
• Fraudulently obtained diamonds from LLD Diamonds USA (Lev Leviev group).
• Used forged documents and misrepresented intentions to secure over $2.6 million worth of goods.
• Convicted of grand larceny in the first degree by a U.S. jury.

🕵️ Nehal Modi’s Role in the PNB Scam: More Than Just an Accessory

• Helped Nirav Modi launder tainted funds through shell companies in Hong Kong, Dubai, and the U.S.
• Controlled companies like Twin Fields Investments and Bailey Bank & Biddle for Nirav Modi.
• Instrumental in managing Ithaca Trust, which received over $30 million in illicit funds.
• Used layered transactions to hide money trails and purchase assets in the U.S.

📂 Evidence Destruction & Witness Tampering: The Darker Side

• Destroyed mobile phones and servers belonging to Nirav Modi's companies in Dubai.
• Arranged fake travel and passports for dummy directors to avoid interrogation.
• Attempted to bribe witnesses, including offering ₹2 crore to give false statements.
• Sent key employees, like Subhash Parab, to Cairo to shield them from Indian authorities.

🌍 International Cooperation and Extradition Developments

• Interpol Red Notice issued in 2019 following ED's request.
• CBI and ED submitted detailed evidence for extradition to U.S. authorities.
• U.S. prosecutors have assured Indian agencies they will oppose Modi’s bail on July 17.
• Nirav Modi (UK), Mehul Choksi (Belgium), and now Nehal Modi (US) are all in custody.

📉 Impact on PNB Scam Investigation and Future Course

• Nehal Modi’s arrest is a major breakthrough for Indian agencies fighting economic crime.
• Helps tighten the noose on financial fraudsters exploiting global networks.
• Sets precedence for stronger extradition cooperation in high-profile cases.
• May help recover more assets and decode deeper layers of money laundering schemes.

❓ People Also Ask

• What is Nehal Modi’s relation to Nirav Modi? — He is Nirav Modi’s younger brother and close aide.
• What was the value of the PNB scam? — Estimated at ₹6,498 crore, one of India’s largest bank frauds.
• Why was Nehal Modi arrested again? — For extradition to India on charges of money laundering and conspiracy.
• What companies did Nehal Modi control? — Twin Fields, Bailey Bank & Biddle, Diamlink Inc., Samuels Jewellers INC.
• What’s next in the extradition case? — U.S. hearing on July 17 where Indian authorities expect denial of bail.

The arrest of Nehal Modi in the United States is not just a legal update — it’s a pivotal moment in the unraveling of one of India’s biggest financial scandals. As the extradition process unfolds, authorities hope to recover more tainted assets and strengthen international efforts to curb diamond fraud and money laundering. Stay tuned as the story of the PNB scam and Nehal Modi continues to evolve, with global ramifications and lessons for financial regulation worldwide.