According to a report by a U.S. bankruptcy examiner, the price of the big yellow diamond increased and decreased in an alternate way by a million dollars as it moved across the globe. Before reaching, the three-carat gem was shipped not less than four times between Nirav Modi controlled shadowy companies for more than five weeks in 2011. So, to understand the main reason behind Indian history’s largest bank fraud was the practice of round-tripping, that is to trade a good repeatedly to give the appearance that the good was had gone through distinct transactions. And this ensued criminal charges against celebrity jeweler Modi, as per the report filed on August 25.
As was the part of a plan to rapid-fire sales in which Modi and associates “fraudulently borrowed approximately $4 billion over a period of years by manufacturing sham transactions purportedly to — import — diamonds and other gems into India using a web of more than 20 secretly controlled shell entities,” wrote John J. Carney, the examiner in the India-related-bankruptcy case of three U.S. jewelry companies indirectly owned by Modi.
As the celebrity jeweler’s empire unraveled, the firms sought protection from creditors in February in New York and authorities brought criminal charges against him and alleged associates and thus Modi turned out to be an international fugitive. But despite all this, he denies doing any kind of wrong thing.
Firestar Diamond Inc., a US company owned indirectly by Modi was the first one to sell the “yellow-orange cushion cut”, and then it was shipped to Fancy Creations Company Ltd., a foreign shell company with this time too being a company owned allegedly by Modi, in August 2011, the report details. And by now the price was almost USD 1.1 million.
The beautiful stone was sent to the Solar Export, a partnership formed by the Nirav Modi family trust two weeks later. And it was back with Firestar Diamond in the U.S. for a price what it was nearly worth, that is, USD 183,000, the examiner wrote.
Within a week, Firestar, which has got offices on Fifth Avenue in New York City, shipped the same Gem back to Fancy Creations of Hong Kong again and this time the diamond was valued USD 1.16 million, the report asserts.
And now after two weeks, the diamond was sold to World Diamond Distribution by A. Jaffe, the New York City-based diamond company owned by Modi to which the report calls as a Modi shell company in the United Arab Emirates and this time it got the value of USD 1.2 million.
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