Nehal Modi, Brother of Fugitive Nirav Modi, Arrested in the U.S. in Connection with Massive PNB Fraud; Extradition Process Underway
In a major development in one of India’s largest financial fraud cases, U.S. law enforcement authorities have arrested Nehal Deepak Modi, the younger brother of fugitive diamond trader Nirav Modi, based on extradition requests made by the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI).
Officials in New Delhi confirmed on Saturday that Nehal Modi was taken into custody on Friday, with the U.S. authorities promptly informing their Indian counterparts of the arrest.
The extradition request stems from India’s attempts to prosecute Nehal Modi in connection with his alleged role in the Rs 13,000 crore Punjab National Bank (PNB) fraud, which came to light in early 2018 and triggered a nationwide uproar.
The case involves fraudulent Letters of Undertaking (LoUs) issued by bank officials that enabled Nirav Modi and his associates to siphon off large sums of money from India’s banking system through shell companies and complex international transactions.
Nehal Modi, aged 46, is now awaiting a court hearing scheduled for July 17 in the United States, during which he is expected to seek bail. However, according to officials familiar with the matter, U.S. federal prosecutors are expected to oppose the bail request, citing the seriousness of the charges and the international scope of the financial crimes involved.
Extradition Sought for Money Laundering and Criminal Conspiracy
The extradition proceedings initiated by the U.S. Department of Justice are based on a formal request jointly submitted by the ED and the CBI under the India-U.S. extradition treaty. The case presented by the U.S. prosecutors is focused on two main charges:
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Money laundering under Section 3 of the Prevention of Money Laundering Act (PMLA), 2002, and
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Criminal conspiracy and destruction of evidence, as defined under Sections 120-B and 201 of the Indian Penal Code (IPC).
Officials said that Nehal Modi played a crucial supporting role in enabling and concealing the laundering of illicit funds, and that his arrest marks a significant step forward in the Indian government’s ongoing efforts to bring all accused parties in the PNB scam to justice.
Nehal Modi’s Alleged Role in the PNB Fraud
Born and raised in Antwerp, Belgium, Nehal Modi is fluent in English, Hindi, and Gujarati. Despite maintaining a relatively low public profile, he has been accused of being deeply complicit in his brother’s alleged fraudulent activities and of assisting Nirav Modi in orchestrating a massive cover-up after the scandal surfaced.
According to the Enforcement Directorate, Nehal used his international connections to help move, conceal, and launder large sums of money, including illegally acquired gold and cash, through a network of shell companies, front businesses, and financial accounts in multiple countries.
Further investigations by the ED revealed that, in the immediate aftermath of the scandal’s exposure in 2018, Nehal Modi worked closely with Nirav’s trusted aide, Mihir R. Bhansali, to secretly transport 50 kilograms of gold and large sums of cash from Dubai.
In doing so, they also instructed dummy directors and employees associated with Nirav’s corporate network to avoid disclosing Nehal’s name or involvement to law enforcement agencies.
Nehal Modi has been officially named in the ED’s charge sheet, which accuses him of knowingly and intentionally assisting Nirav Modi in money laundering operations, the destruction of incriminating evidence, and maintaining false documentation to mislead investigators.
The Wider Fraud Network
The Rs 13,000 crore PNB fraud, considered one of the largest in Indian banking history, was allegedly masterminded by Nirav Modi, Nehal Modi, and their uncle Mehul Choksi, the former chairman of Gitanjali Gems. Both Nirav and Choksi fled India before the scandal broke publicly.
Nirav Modi is currently imprisoned in Wandsworth Prison in the United Kingdom, where he is fighting extradition to India. His appeal against extradition has been rejected by multiple UK courts, and he awaits the final legal decision.
Mehul Choksi, meanwhile, acquired citizenship in Antigua and Barbuda before the fraud was uncovered and remains there. India has initiated parallel legal efforts for his extradition, but the process has been complicated by questions surrounding his citizenship and reported kidnapping attempts.
India’s Global Push to Bring Back Economic Offenders
Nehal Modi’s arrest represents the latest success in India’s global efforts to bring fugitive economic offenders to justice. Over the past five years, agencies such as the ED and CBI have intensified their cooperation with foreign governments, particularly in the U.S. and U.K., to secure extraditions under international treaties and mutual legal assistance frameworks.
The Indian government has reiterated its zero-tolerance policy toward financial crime, especially in high-profile cases involving public sector banks and international money laundering networks.
