Nehal Modi, the brother of fugitive economic offender Nirav Modi, has been arrested in the United States following an extradition request by Indian authorities.
His arrest on July 4, by the United States Department of Justice is a significant development in the ongoing multi-crore Punjab National Bank (PNB) scam. The US authorities acted on an Interpol Red Corner Notice at the request of India’s Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI).
Born and brought up in Antwerp, Belgium, Nehal Deepak Modi was arrested on charges of money laundering under Section 3 of Prevention of Money Laundering Act (PMLA) 2002 and criminal conspiracy under Section 120-B and 201 of the Indian Penal Code (IPC). His arrest took place after lengthy legal and diplomatic proceedings, during which he challenged and failed to revoke the Red Corner Notice.
The PNB scam, orchestrated by jeweler Nirav Modi, his uncle Mehul Choksi, other relatives and some PNB employees , involved use of fake Letters of Undertakings (LoUs) at PNB’s Brady House branch in Fort, Mumbai. These LoUs were bank guarantees, issued without collateral or entry in the bank’s core banking system. This allowed them to take credit from banks globally, leading to losses exceeding Rs 1300 crore for PNB. The scandal was unearthed in 2018, exposing systematic financial weaknesses in the Indian banking system. This scam is known as the biggest fraud in Indian banking history.
Investigations by CBI and ED allege Nehal Modi as a crucial figure in laundering illegal funds on behalf of his elder brother, Nirav Modi who is facing extradition in the UK. Nehal is accused of assisting and concealing illegal funds through a network of shell companies and international transactions, in direct violation of Indian law.
The ED alleges that Nehal, along with Nirav’s executive Mihir R Bhansali, took gold worth 50 kg and cash from Dubai after the PNB scam, and instructed dummy directors to not reveal his name to the authorities.
US authorities said Nehal can apply for bail at his next extradition hearing scheduled for July 17, 2025, which will be opposed by the US prosecution.