International gem dealer busted in alleged $1.4M diamond fraud

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A gem dealer from a prominent family was busted Friday for allegedly stealing $1.4 million in diamonds from a New York wholesaler.

“While diamonds may be forever, this flawed scheme was not, and now Mr. Modi will face the clarity of a New York Supreme Court indictment,” said Manhattan District Attorney Cy Vance Jr. in a statement, referring to defendant Nehal Modi.

The 41-year-old pleaded not guilty Friday to one count of first-degree grand larceny in Manhattan Supreme Court. He was released without bail.

He faces more serious charges in India for allegedly laundering more than $100 million for his billionaire jeweler brother, Nirav Modi, whose designs have been worn by model Rosie Huntington-Whiteley and actresses Naomi Watts and Kate Winslet, according to the BBC. Bollywood star Priyanka Chopra-Jonas has graced billboards advertising the brand.

Nehal Modi allegedly persuaded LLD Diamonds USA to front him $2.6 million in gems for a purported deal with Costco in 2015.

Instead, he allegedly took $1.4 million worth of the sparklers and sold them at a steep discount, pawned them for cash and used them to secure loans to fuel his international playboy lifestyle, according to court papers and prosecutors.

Nehal Modi paid back about $1.2 million to Diamonds LLD. But when the company president asked about the outstanding balance, he stalled, falsely claiming there had been a “Costco fulfillment error,” prosecutors charge. Diamonds LLD reported the alleged scam to the DA’s office.

“This is a commercial dispute,” said Modi’s defense lawyer Roger Bernstein. “Mr. Modi is not guilty.”


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