PNB loan fraud: ED calls Nehal Modi co-conspirator, seeks to declare him FEO

FUgitive diamantaire Nirav Modi’s comrade, Nehal Modi, was the “ undercoat co-conspirator” in the ₹6,498 crore Punjab subject cant (PNB) loan humbug and played an instrumental role in layering and transferring millions of dollars, the Enforcement Directorate (ED) said in an application to declare him a fugitive economic offender (FEO).Nehal Modi, 46, has been in a US prison since July 2025 following his arrest based on India’s extradition request. He is accused of helping his uncle, Mehul Choksi, who is in a Belgian jail, launder money through Samuels Jewellers Inc and Diamlink Inc. The two companies allegedly received around $19 million in proceeds of crime from Dubai-based shell companies linked to Choksi.The ED’s application, filed in a Mumbai court on February 3, invoking the FEO Act, 2018, said Nehal Modi was central to evidence destruction and influencing witnesses.The FEO Act was introduced in 2018 to deter economic offenders from evading the law by remaining outside the jurisdiction of Indian courts. It empowers authorities to confiscate and attach proceeds of crime and assets when the amount involved in the case is above ₹100 crore. Such attachment is not linked to conviction.The ED described Nehal Modi as Nirav Modi’s close confidant. It added that Nehal Modi left India after the PNB fraud came to light in 2018. It added that he never responded to the summons and has not joined the trial.The ED cited material on record, including charge-sheets, prosecution complaints, unexecuted non-bailable warrants, red notice, and the conduct of the accused, and said Nehal Modi is liable to be declared FEO.The ED said Nehal Modi managed the affairs of US-based entities Twin Fields Investments Limited and Bailey Bank and Biddle, which received at least $50 million in fraudulent funds from Nirav Modi’s dummy companies. “Additionally, as the protector and investment advisor of one ‘The Ithaca Trust,’ he oversaw the movement of USD 30 million of laundered money used to purchase immovable properties in the United States,” said the application, a copy of which HT has seen.It said Nehal Modi grabbed the proceeds of crime after the fraud was detected. “He physically removed significant assets from overseas jurisdictions, including USD 6 million worth of diamonds, 150 boxes of pearls from Hong Kong, and AED 3.5 million in cash, along with 50 kg of gold from Dubai. To obstruct the investigation, he directed the destruction of digital evidence, specifically mobile phones and a secure server in Dubai that managed group transactions,” the application said.“Nehal Modi, engaged in witness tampering by forcibly moving dummy directors to Cairo, confiscating their passports, and coercing them into signing false affidavits to distance Nirav Modi from the dummy entities. In one instance, he allegedly offered a witness INR 2 million to provide false testimony to European judicial authorities.”The ED filed similar applications this month to declare Nirav Modi’s other brother, Neeshal Modi, Aditya Nanavati, a senior Firestar Group executive, and Sandeep Mistry, director of a Hong Kong-based company, as FEOs.