New York: A bankruptcy court in New York dismissed a petition of fugitive of diamond merchant Nirav Modi and his associates, seeking dismissal of fraud allegations against them.
The allegations were made by Richard Levin, the court appointed trustee of three US corporations–Firestar Diamond, Fantasy Inc and A Jaffe–indirectly owned by Nirav Modi previously.
Levin had also sought a minimum compensation of USD 15 million for âharmâ suffered by the debtors of Modi and his associates Mihir Bhansali and Ajay Gandhi.
In a major blow to the Indian fugitive and his accomplices, Southern District of New York Bankruptcy Court Judge Sean H Lane issued the order last Friday.
âSDNY Bankruptcy Court Judge Lane in a clear decision denied defendants Modi, Bansali and Gandhiâs motions to dismiss US Trustee Richard Levinâs amended complaint in the adversary proceeding arising out of Modiâs initial chapter 11 bankruptcy petition, alleging fraud, breach of fiduciary duties, RICO and related state law claims,â Indian American attorney Ravi Batra told PTI.
Reading the 60 page order Batra said Modi put his profits back into his own company as additional sales to falsely raise the stock price/company valuation by setting up a scheme to defraud Punjab National Bank and others of over USD1 billion.
âBut to get the ill-gotten funds by bank fraud out of his companies, he engaged in a separate fraud to hide those withdrawals for personal benefit as if they were ordinary business transactions,â Batra said.
According to the court order, Levinâs petition sought to recover damages for harm inflicted by Modi and his two accomplishes on the debtors and their estates as a result of the his six-year extensive international fraud, money laundering and embezzlement scheme.
It said from early 2011 to early 2018, Modi and his associates orchestrated and carried out a scheme to âobtain loans, credits, or other funds under false pretences and without collateralâ from numerous banks, including the PNB.
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