The Enforcement Directorate (ED) has filed its second chargesheet against PNB fraud accused Nirav Modi, and named 10 individuals and 17 entities including members of Modi's family.
The chargesheet stated that letters of undertaking (LoUs) were fraudulently used to obtain Rs 6,400 crore worth of funds for purchasing real estate and personal property as well as for other purposes besides the ones stated through layer of "dummy companies' located overseas, Livemint reported.
"A maze of transactions to obfuscate the investigation and to cover the tracks of money laundering was unearthed by obtaining foreign bank accounts and financial statements of various foreign dummy entities through various sources," the ED said.
The chargesheet detailed how funds were siphoned off using fraudulent LoUs to buy property in plush localities in US and start new chain of jewellery stores, the news website said.
ED has also alleged in the chargesheet that, Modi in the year 2017 bought property worth $25 million in the US in the name of Ithaca Trust, but the funds for making the purchase were traced back to the Fine Classic FZE, a Dubai-based dummy company in the name of Modi's sister, Purvi Modi. Her company was one of the beneficiaries of the funds secured through counterfeit PNB LoUs, the report stated.
Money from the dummy company Fine Classic was then transferred to Purvi Modi's account in AmiCorp Bank & Trust in Barbados which was then diverted to an account of Ami with HSBC in the US. The money was then redirected to an account of Purvi Modi with the Bank of Singapore and later to a trust called "the commonwealth trust company", before eventually landing with Ithaca Trust, the chargesheet said.
The ED also said that at least $47 million was rerouted to set up a new chain of jewellery stores in the US and the funds secured via bogus LoUs were also used to repay advances received through the LoUs.
"Repayment of advances taken by Nirav Modi and Deepak Modi, father of Nirav Modi, from the dummy recipients of LoU funds to the tune of $18 million and $92 million, respectively, were shown as discharged in lieu of receipt of funds from Pacific Diamonds purportedly on behalf of Nirav Modi and Deepak Modi. It is ironical that the source of funds for Pacific Diamond is also illegal LoU money," the ED contended.
A consultant firm in Dubai was chosen to assimilate at least three layers of companies in Dubai. It was the third layer of companies that got the funds directly through the fraudulent LoUs. Nirav Modi also schemed to exploit the Foreign Direct Investment (FDI) route for circular transactions, the ED alleged.
"In 2017, Nirav Modi planned to rotate the LoU funds and reinvest the same into Firestar India by showing it as FDI investment through two companies namely Alecust Global Holding Limited, Mauritius and Progress Investment limited, Cyprus," the ED added in the chargesheet.
The probe agency so far has provisionally attached assets worth Rs 1,873 crore, which includes foreign immovable properties, bank accounts and jewellery worth Rs 961 crore.
The ED Tuesday debunked allegations of inaction on its part for not responding in time to British investigators when they extended help. The central agency issued a two-page clarification, refuting media reports in this context saying that they "have been distorted with speculative writing and wrong conclusions have been drawn".
"In this connection, it is submitted that no such formal or informal communication was received by the ED from UK authorities in March, 2018 or at a later date, informing that Nirav Modi was in the UK," the probe agency clarified in a press statement.
The agency said the latest media reports reflected that the "understanding regarding the legal issues is contrary to the facts and established international protocols and procedures".
"This kind of misreporting and speculative news may create a wrong impression to the public at large," it said.