Big Win For ED And CBI: Nirav Modi’s Brother Nehal Modi Arrested in US in Rs 13,000 Cr PNB Scam Case, Extradition Hearing on July 19

New Delhi: In a big win for India's Enforcement Directorate (ED) and Central Bureau of Investigation (CBI), Nehal Modi, the younger brother of fugitive diamantaire Nirav Modi, was arrested on July 5, 2025, in the United States.

The arrest comes after an extradition request was made by Indian authorities, seeking his involvement in the multi-billion-dollar Punjab National Bank (PNB) scam. Nehal Modi was arrested for being involved in a huge fraud case where he illegally took $2.6 million worth of diamonds from a top diamond company in Manhattan.

Nehal Modi, 45, was earlier charged in the US for deceiving a diamond company into providing him diamonds on the pretext of a deal with Costco, a deal that never materialized.

Instead, he allegedly pawned and sold the diamonds for his own financial gain. The extradition request was based on charges of money laundering, criminal conspiracy, and the destruction of evidence tied to the PNB fraud case.

Nehal Modi Involvement In PNB Scam 

Nehal Modi, who has been named in India’s chargesheet related to the PNB scam, is accused of helping his brother, Nirav Modi, launder illicit funds by using shell companies across the globe.

Nehal was reportedly involved in the fraudulent transfer of money into overseas accounts and the destruction of key evidence, including secret communication servers.

He was a director at Firestar Diamonds USA and played a key role in laundering the proceeds of the scam through international shell companies. One of the main allegations against him is his involvement in the purchase of $25 million worth of property in the United States through the Ithaca Trust, a trust allegedly set up by Nirav Modi to conceal the proceeds from the fraud.

According to the Enforcement Directorate (ED), Nehal Modi also destroyed critical evidence that linked him and his brother to these illegal activities. This includes server communications from UAE-based shell companies that were used to facilitate fraudulent transactions through Letters of Undertaking (LoUs) issued by PNB.

What's the Case on Nirav Modi?

Nirav Modi, the fugitive diamantaire, is at the center of one of the largest banking frauds in India’s history. His company, along with his uncle Mehul Choksi, allegedly defrauded Punjab National Bank (PNB) to the tune of Rs 14,000 crore (approximately $2 billion) by obtaining fraudulent LoUs from bank officials. These LoUs were then used to obtain huge sums of money from overseas branches, without any legitimate collateral or repayment.

Nirav Modi and his uncle were reportedly working in collusion with corrupt PNB employees, using shell companies in Hong Kong, UAE, and other tax havens to divert the stolen money. They used these funds to buy luxury properties across the globe, including in the US.

In addition to this massive scam, Nirav Modi is also accused of selling overpriced diamonds and jewelry to various banks, while helping others like his brother, Nehal, launder illicit gains. Nirav Modi is currently in custody in the UK, fighting an extradition request from India. His bail requests have been repeatedly denied, with a hearing scheduled for September 19, 2025.

The PNB Scam: India’s Biggest Banking Fraud

The PNB scam, one of the largest financial frauds in India, was uncovered in early 2018. It involved a massive conspiracy between Nirav Modi, Mehul Choksi, and a few corrupt employees at the Mumbai branch of Punjab National Bank (PNB). The fraud was carried out through Letters of Undertaking (LoUs) issued by PNB officials to Nirav Modi’s companies, which were then used to obtain huge sums of money from foreign banks.

The total value of the fraud was estimated to be around Rs 14,000 crore (approximately $2 billion). This was achieved by issuing fraudulent LoUs, which were guaranteed by the bank, but no real assets or collateral were presented in return. Once the scam was uncovered, it led to a massive financial scandal, with investigations by both the CBI and the ED.

Next Hearing on July 17

The next hearing in Nehal Modi's extradition case will take place on July 17, 2025, where a status conference will be held. During this hearing, Nehal is expected to apply for bail, but the US prosecution has already stated they will oppose his bail request.

In addition, a Red Corner Notice had already been issued by Indian authorities against Nehal Modi in connection with the ongoing PNB scam case.