The fugitive diamond trader, Mehul Choksi, who is involved in a $2 billion Punjab National Bank scam along with his nephew, Nirav Modi, allegedly sold lab-grown diamonds to his customers in the US faking them as real stones, a forensic report presented in the US bankruptcy court revealed. Mehul's firm in the US, Samuel Jewellers Inc, was passing off fake certifications of the grade of diamonds through a laboratory that was controlled by Choksi's sister.
A diamond grading firm, Independent Gemological Laboratories (IGL) is owned by a British Virgin Atlantic entity controlled by Choksi's sister and his key associates that certified the lab-grown diamonds as natural.
Fraud at Mehul Choksi's US firm exposed in 2017?
The fake diamond grading along with illegal money laundering at Mehul Choksi's Samuel Jewellers was something the diamond trader was alerted about in 2017 by Farhad Wadi, the Chief Executive Officer at Samuel Jewellers Inc said. However, Choksi instead threatened Farhad of dire consequences if any of these fraudulent activities were exposed, the report mentioned.
Among several frauds, Choksi was involved in was floating a number of pupper vendors or fake companies that existed only on paper to borrow money from various financial institutions in the US. The report added that most of these 'puppet vendors' were one -man companies where the people involved were promised 1 percent of the money being laundered.
Choksi even borrowed money from two financial organisations in US-Wells Fargo Bank NA and Gordon Brothers Finance Company worth crores of ruppes which was subsequently laundered to Choksi's various entities in India, Middle East and Hong Kong. The report also mentioned that Mehul Choksi used some of the borrowed money from the US to repay IChondian banks.
The fake companies that Mehul Choksi floated to acquire transactions worth hundreds of crores from Indian banks had poor people on their board of directors list. These fraud companies were shown in the letters of undertaking at the time of transactions , the CBI investigations revealed. At least 10 directors of these companies are accused of the fraud to the tune of Rs 48,000 crore.
However, a detailed investiagtion into the whereabouts of these directors revealed that they were poor people who lived in the sub-urban slums of Mumbai city, the NDTV reported.
As the CBI and police are on a manhunt to nab these so called directors, their families said that most of them are poor and have gone into depression ever since the scam was exposed.
They live a pretty ordinary life, far from the star-studded events that the diamond traders, Nirav Modi and Mehul Choksi were known to attend.