The Enforcement Directorate (ED) has approached a special court in Mumbai seeking to declare Nehal Modi, brother of fugitive diamantaire Nirav Modi, a Fugitive Economic Offender (FEO) in connection with the ₹6,498 crore fraud at Punjab National Bank (PNB).
In an application filed on February 3 under the Fugitive Economic Offenders Act, 2018, the central agency described Nehal Modi as the “prime co-conspirator” in the banking scam and accused him of playing a key role in laundering proceeds of crime, destroying digital evidence and influencing witnesses to derail the investigation.
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Evidence Destruction and Asset Movement
Nehal Modi, 46, has been lodged in a US prison since July 2025 following his arrest pursuant to India’s extradition request. The ED has alleged that he actively assisted his uncle, Mehul Choksi, in diverting and layering illicit funds through overseas entities after the fraud surfaced in early 2018.
According to the agency’s court filing, US-based companies Samuels Jewellers Inc and Diamlink Inc allegedly received nearly $19 million traced to Dubai-based shell firms linked to Choksi. Investigators claim that Nehal Modi managed the operations of these entities and facilitated cross-border transactions to obscure the money trail.
The ED further stated that Nehal Modi oversaw the affairs of Twin Fields Investments Limited and Bailey Bank and Biddle, which allegedly received at least $50 million from Nirav Modi’s dummy companies. As protector and investment adviser of an entity named ‘The Ithaca Trust’, he is accused of supervising the movement of approximately $30 million in laundered funds used to acquire immovable properties in the United States.
Witness Tampering and Physical Evidence Removal
The agency has also alleged large-scale removal of assets after the scam came to light. In its application, the ED claimed that Nehal Modi physically shifted $6 million worth of diamonds, 150 boxes of pearls from Hong Kong, AED 3.5 million in cash and nearly 50 kg of gold from Dubai to frustrate recovery efforts by investigative agencies.
In addition to financial transactions, the ED accused him of orchestrating the destruction of crucial electronic evidence. The application stated that mobile phones and a secure server in Dubai — allegedly used to manage group transactions — were destroyed at his direction in a bid to obstruct the probe.
Serious allegations of witness tampering have also been levelled. The ED told the court that Nehal Modi forcibly relocated certain dummy directors to Cairo, confiscated their passports and coerced them into signing affidavits distancing Nirav Modi from shell companies. In one instance, he is alleged to have offered ₹20 lakh to a witness to depose falsely before European judicial authorities.
Legal Implications of FEO Declaration
The Fugitive Economic Offenders Act, enacted in 2018 in the wake of high-profile financial scams, empowers authorities to attach and confiscate properties of individuals accused of economic offences involving ₹100 crore or more if they evade Indian courts by remaining abroad. Importantly, confiscation proceedings under the Act are not contingent upon conviction.
The ED has cited material on record — including charge sheets, prosecution complaints, non-bailable warrants and a Red Notice — to argue that Nehal Modi has deliberately avoided joining investigation and trial proceedings in India since leaving the country in 2018.
Parallel proceedings continue against Nirav Modi in the United Kingdom, where he remains in custody pending extradition. Mehul Choksi is currently facing legal action in Belgium.
The ₹6,498 crore PNB fraud, which involved the fraudulent issuance of Letters of Undertaking to secure overseas credit, remains one of India’s largest banking scams. The case triggered sweeping reforms in banking oversight and internal controls across public sector banks.
The Mumbai court is expected to take up the ED’s plea in the coming weeks. If declared an FEO, Nehal Modi’s domestic assets could be confiscated even before the conclusion of the criminal trial, significantly strengthening recovery efforts in the long-running case.
About the author – Ayesha Aayat is a law student and contributor covering cybercrime, online frauds, and digital safety concerns. Her writing aims to raise awareness about evolving cyber threats and legal responses.
