Mumbai | December 3: A major case of financial fraud has surfaced in Mumbai’s diamond trading circuit, with police arresting a Surat-based trader for allegedly misappropriating diamonds worth ₹1.81 crore. According to the Bandra-Kurla Complex (BKC) police, the accused had taken the diamonds on credit but neither returned the goods nor paid the trader who supplied them.
The arrested accused, Rajeshkumar Ramgopal Sharma, had been dealing with the complainant for nearly three years and had built significant trust in the process, police officials said.
Three-Year Business Relationship Built on Trust Ends in Fraud
The complaint was filed by Rajesh Vithani (48), a Mumbai-based diamond merchant with an office in the prestigious Bharat Diamond Bourse (BDB) at Bandra-Kurla Complex. BDB is one of the world’s largest diamond trading hubs, hosting hundreds of domestic and international traders every day.
According to Vithani, he had been doing business with Sharma for almost three years. During this period, the accused consistently requested diamonds on credit, vouching for timely payment. To build credibility, Sharma initially cleared smaller dues on time. This helped him gain the merchant’s confidence, ultimately leading to transactions of higher value.
Police officers stated that once Sharma obtained diamonds worth ₹1.81 crore, he stopped responding to payment requests and began avoiding all communication.
Accused Vanishes After Collecting Diamonds; Phones Switched Off, Address Found Locked
Investigators revealed that after receiving the diamonds, Sharma gradually withdrew from all communication. He reportedly cited market fluctuations and delayed payments from clients as excuses. However, within weeks, he stopped answering calls altogether.
When the complainant attempted to reach him in Surat, Sharma’s known address was found locked. Realizing he had been cheated, Vithani approached the BKC police with a formal complaint.
Based on the complaint, police registered a case under IPC Sections 406 (criminal breach of trust), 420 (cheating), and 409 (criminal misappropriation of entrusted property) — all serious offences involving substantial economic losses.
Technical Surveillance Leads Police to Surat Hideout
To trace the missing trader, the police deployed technical surveillance tools, analysed mobile tower locations, and examined banking and transaction footprints. According to a senior official:
“The accused kept changing his location and frequently switched numbers, making the tracking exercise extremely challenging.”
Despite the hurdles, the police team managed to pinpoint Sharma’s location in Surat through network intelligence. A special team was dispatched, which conducted a swift operation and arrested the accused. He was subsequently brought to Mumbai and produced before a local court, which remanded him to police custody.
Rising Fraud Cases Alarm Diamond Industry
This case has raised concerns within the diamond industry, especially among traders heavily dependent on credit-based transactions. Several merchants at Bharat Diamond Bourse noted that similar cases have increased in recent years, largely due to fluctuating global demand and cash flow constraints. According to an industry expert:
“The credit system is essential for business continuity, but lack of documentation and collateral in some deals creates space for fraud. The industry needs stronger internal safeguards.”
Police Begin Recovery Process; Financial Trail Under Examination
Investigators are now focusing on tracing the diamonds’ final destination. They suspect the goods may have been sold, pawned, or moved through a broader network. A police official said:
“We have seized several financial documents and digital records from the accused. These will help us understand the flow of money and identify all individuals who may be involved.”
The inquiry is ongoing, and efforts are underway to recover the misappropriated diamonds.
