“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,” Batra said. The scheme resulted in accrual of claims against the debtors of over USD 1 billion in favour of Punjab National Bank, the diversion of millions of dollars of the debtors' assets for the benefit of the family of Modi and Bhansali, and the collapse of the debtors and the resulting loss of value of their businesses. “But 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,” Batra said based on the court papers.Īccording to the court order, Levin's petition sought to recover damages for harm inflicted by Modi and his two accomplices on the debtors and their estates as a result of his six-year extensive international fraud, money laundering and embezzlement scheme. “SDNY Bankruptcy Court Judge Lane in a clear decision denied defendants Modi, Bansali and Gandhi's motions to dismiss US Trustee Richard Levin's amended complaint in the adversary proceeding arising out of Modi's initial chapter 11 bankruptcy petition, alleging fraud, breach of fiduciary duties, RICO and related state law claims,” Indian American attorney Ravi Batra told PTI.Įxplaining the 60-page order, Batra said Modi ploughed 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 (PNB) and other banks of over USD 1 billion by a “shell game,” where the ball gets bigger with each sleight of hand, and then issue Letters of Undertaking (sort of a guarantee) to PNB and get loans based upon the inflated ball's value.
Nirav Modi, who is currently lodged in a 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. Southern District of New York Bankruptcy Court Judge Sean H Lane issued the order last Friday, in a major blow to the Indian fugitive and his accomplices.