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US Court Rejects Plea Seeking Dismissal Of Fraud Charges


New Delhi: In a big blow to the diamond merchant Nirav Modi petition, a bankruptcy court in New York rejected the plea of the fugitive and his associates seeking dismissal of fraud allegations against them.

Nirav Modi, who is currently lodged in jail in the UK, is challenging India’s attempts to extradite him to face charges of fraud and money laundering in the Punjab National Bank (PNB) scam case.

What were the allegations?

The allegations in the US are made by Richard Levin, the court-appointed trustee of three US corporations — Firestar Diamond, Fantasy Inc, and A Jaffe — indirectly owned by Nirav Modi.

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Levin demanded a minimum compensation of $15 million for “harm” suffered by the debtors of Modi and his associates Mihir Bhansali and Ajay Gandhi.

In a clear decision, the Southern District of New York Bankruptcy Court Judge Sean H Lane denied defendants Modi, Bhansali, and Gandhi’s motions to dismiss US Trustee Richard Levin’s amended complaint, Indian American attorney Ravi Batra told PTI.

According to the order, Batra said Modi plowed his profits back into his own company as additional sales to falsely raise the stock price or company valuation by setting up a scheme to defraud Punjab National Bank and others of over $1 billion.

Indian American attorney Ravi Batra further explained: “The court’s refusal to dismiss RICO (Racketeer Influenced and Corrupt Organizations Act) count is legally satisfying, but there is a hole in this celebration by law-abiding banks and people: once the appeals are taken, and Modi remains charged with the US Trustee’s amended complaint, in whole or in part, and the case goes to a jury and wins a judgment, it’s only the assets Modi and his cohorts then have can they be compelled to disgorge.”

(With PTI Inputs)


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