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Nirav Modi was running ponzi-like scheme, UK court told

LONDON: Wished diamond service provider Nirav Modi is liable for overseeing a “ponzi-like scheme” that prompted huge fraud to India’s Punjab Nationwide Financial institution (PNB), the UK court docket listening to last submissions within the extradition case was informed on Friday.
The Crown Prosecution Service (CPS), arguing on behalf of the Indian authorities, focussed on laying out the prima facie case of fraud, cash laundering and perverting the course of justice in opposition to the 49-year-old jeweller, who adopted the proceedings on the second day of a two-day listening to through videolink from a room at Wandsworth Jail in south-west London.
District choose Samuel Goozee was taken by way of proof already offered earlier than Westminster Magistrates’ court docket in London through the course of a number of hearings final 12 months as a way to wrap up the extradition listening to this week.
“The straightforward and stark truth is that he (Nirav Modi) used his three partnership corporations to amass billions of {dollars} price of credit score which was totally unsecured and LoUs (letters of endeavor) have been issued for wholly bogus commerce,” stated CPS barrister Helen Malcolm, showing through videolink for the part-remote court docket proceedings as a result of coronavirus lockdown.

“Whereas the defence claims this can be a mere industrial dispute, there’s a plethora of proof to level to a ponzi-like scheme the place new LoUs have been used to repay previous ones,” she stated.
A ponzi scheme usually refers to an funding rip-off which generates funds for earlier buyers with cash taken from later buyers and the CPS sought to determine that Nirav Modi used his companies – Diamonds R Us, Photo voltaic Exports and Stellar Diamonds – to make fraudulent use of PNB’s LoUs in a conspiracy with banking officers.
Malcolm’s arguments additionally reiterated earlier proof of a video by a former worker claiming to have obtained demise threats from Nirav Modi and dummy administrators of shell corporations being compelled to depart India to evade the investigations launched by the Central Bureau of Investigation (CBI) and Enforcement Directorate (ED).
“These administrators have been pressured to get them additional out of the best way from the Indian investigation,” famous Malcolm.
Drawing Justice Goozee’s consideration to “real and bona fide prices” filed in opposition to Nirav Modi in India, she burdened that the choose want solely to fulfill himself on whether or not there’s a prima facie case in opposition to him to be extradited to face trial on the fees.
Nirav Modi’s defence group, led by barrister Clare Montgomery, in her counter-arguments has challenged that premise as a result of it might strategy the case with an “extraordinarily broad brush”.
“It requires correct evaluation as to why the offences can’t quantity to an allegation of financial institution fraud, as there is no such thing as a case of operative deception,” stated Montgomery, referring to professional proof on Indian legislation given by former Indian excessive court docket choose Abhay Thipsay final 12 months.
The listening to on Friday is predicted to conclude the ultimate submissions within the case and depart the choose to set a timeline for his judgment.
On Thursday, he heard detailed arguments from either side about why Nirav Modi’s “deteriorating” psychological well being situation does or doesn’t meet the Part 91 threshold of the Extradition Act 2003 – which has most lately been used within the UK to dam the extradition of Wikileaks founder Julian Assange on the grounds of it being “unjust and oppressive” as he’s a excessive suicide danger.
“As within the Assange case, the problems right here evidentially are the identical – the psychological situation of Nirav Modi and the remedy he would obtain given the jail circumstances in India,” stated Montgomery, pointing to her shopper’s extreme despair and danger of suicide because of his prolonged incarceration since March 2019 and referred to as for his discharge.
The CPS challenged the defence stance to say that the 2 instances have been of a “fully totally different nature” and as a substitute sought an adjournment within the occasion that Part 91 was to be engaged, to permit an unbiased analysis of medical information by a guide psychiatrist and applicable assurances be acquired by way of his care in India.
Nirav Modi is the topic of two units of felony proceedings, with the CBI case regarding a large-scale fraud upon PNB by way of the fraudulent acquiring of LoUs or mortgage agreements, and the ED case regarding the laundering of the proceeds of that fraud. He additionally faces two extra prices of “inflicting the disappearance of proof” and intimidating witnesses or “felony intimidation to trigger demise” added to the CBI case.
The jeweller has been in jail since he was arrested on March 19, 2019, on an extradition warrant executed by Scotland Yard and his makes an attempt at looking for bail have been repeatedly turned down.

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