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Gem Trader Charged With Stealing $2.6M+ in Diamonds

He allegedly conned a Manhattan wholesaler.

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An international diamond trader is accused of fraudulently obtaining over $2.6 million worth of diamonds from a Manhattan-based diamond wholesale company.

Manhattan District Attorney Cy Vance Jr. announced the indictment of Nehal Modi, 41. He is charged in a New York Supreme Court indictment with grand larceny in the first degree.

“As alleged, Mr. Modi conned a Manhattan diamond wholesaler into fronting him millions worth of diamonds for a purported deal with Costco that never existed,” Vance said in a press release. “While diamonds may be forever, this flawed scheme was not, and now Mr. Modi will face the clarity of a New York Supreme Court indictment. My Office will not allow individuals who have the privilege of soliciting business in Manhattan’s iconic diamond industry to defraud our businesses or consumers.”

The press release continued:

According to the indictment, court filings, and statements made on the record in court, between March 2015 and August 2015, MODI, a former member of Noble Titan Holdings, LLC, made false representations to obtain over $2.6 million worth of diamonds from LLD Diamonds USA, LLC (“LLD”) on favorable credit terms and consignment, and then liquidated the diamonds for his own ends.

MODI, who comes from a well-known family in the diamond industry, was initially introduced to the president of LLD through industry associates. In March 2015, MODI approached LLD, claimed that he was pursuing a relationship with Costco Wholesale Corporation (“Costco”), and asked LLD to provide several diamonds, worth nearly $800,000, to present to Costco for a potential sale. After LLD provided the diamonds, MODI falsely informed the company that Costco had agreed to purchase them. Subsequently, LLD allowed the defendant to purchase the diamonds on credit, with full payment required within 90 days. MODI then pawned the diamonds at Modell Collateral Loans, Inc. (“Modell”) to secure a short-term loan.

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Between April and May 2015, MODI returned to LLD three additional times and took more than $1 million worth of diamonds for purported sales to Costco. MODI made a series of payments to LLD, but used the majority of the proceeds for personal use and other business expenses. To cover his fraud, MODI falsely claimed that he was encountering payment issues due to a “Costco fulfillment error” and made repeated promises to satisfy the balance.

In August 2015, MODI returned to LLD again and falsely claimed that Costco wanted to purchase additional diamonds. This time, LLD permitted MODI to take the additional diamonds on consignment, with terms explicitly stating that MODI did not have the authority to sell the diamonds without authorization by LLD. LLD also required a partial payment upfront in the event of a sale, as the defendant’s outstanding balance was nearly $1 million at that time. Meanwhile, MODI had already contacted Modell to arrange an additional loan. After picking up the diamonds from LLD, MODI pawned the majority of the diamonds at Modell to secure two separate loans and sold the remainder of the diamonds to various retailers at a steep discount from the listed consignment price.

LLD ultimately uncovered the fraud and demanded that MODI immediately pay his outstanding balance or return the diamonds. However, the defendant had already sold or pawned all of the diamonds and spent most of those proceeds. LLD subsequently reported the fraud to the Manhattan D.A.’s Office.

Assistant D.A. Brandon Burkart is handling the prosecution of the case under the supervision of Assistant D.A.s, David Crowley, Chief of the Financial Frauds Bureau and Gloria Garcia, Deputy Chief of the Investigation Division, as well as Executive Assistant D.A. Christopher Conroy, Chief of the Investigation Division. Investigative Analyst Ethan Ellsworth and Assistant Financial Investigator Regina Lau assisted in the investigation.

District Attorney Vance thanked Detective Joseph Metsopulos from the NYPD’s Major Case Squad for his assistance with the investigation.

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