Under the RICO Act, Nirav Modi could face a jail term in the US

Under the RICO Act, Nirav Modi could face a jail term of up to 20 years in the United States.

nirav modi arrested

MUMBAI: The United States may soon seek Nirav Modi’s extradition from the UK in connection with a bankruptcy case, a development that officials said might prompt the fugitive Indian jeweller who is behind bars in London not to contest his extradition back home since he faces a potentially stiffer punishment in the US.

Modi, who is wanted in India on charges of defrauding the Punjab National BankNSE -3.92 % of more than Rs 13,500 crore, was charged in the US last week under the stringent Racketeer Influenced and Corrupt Organisations (RICO) Act, said people aware of the matter.

Under the RICO Act, Modi could face a jail term of up to 20 years, along with the attorney’s fees and three times as much damages as he faces in India under the Prevention of Money Laundering Act (PMLA) and the Prevention of Corruption Act (PCA), they said.

“We have learnt that the US too is likely to stake claim for Nirav Modi’s extradition and might be soon writing to the UK seeking his extradition so that he can be tried under its RICO Act, under which he has been recently charged by a US bankruptcy court,” a senior Enforcement Directorate (ED) official told ET on condition of anonymity.

The US court is said to have charged Modi and his two associates, Mihir Bhansali and Ajay Gandhi, along with senior executives of three bankrupt US companies – Firestar Diamond, A. Jaffe and Fantasy (owned by Modi) – under the RICO Act, a federal law designed to combat organised crime.

“In the event, Modi’s extradition comes through and the US also stakes a claim for his extradition, since we were the first to move for his extradition, we will have the first right to have him extradited to India so that he can be tried under our laws,” said the ED official.

Another senior official said that in the event the US seeks Modi’s extradition, there is a possibility that Modi may not contest his extradition to India since he faces a lesser punishment in India. When reached for comment, Modi’s counsel Vijay Aggarwal refused to comment on the matter.

Modi, along with his uncle Mehul Choksi, is wanted in India for his alleged role in the Punjab National Bank fraud case. While the ED is probing the money laundering aspect of the case, the Central Bureau of Investigation (CBI) is focusing on the criminal conspiracy and misuse of office by government officials by the accused.

“Modi was charge-sheeted by the CBI under the PCA and certain sections of the Indian Penal Code (IPC) while the ED has charged him under the PMLA Act. Under the PCA and IPC, he faces a maximum punishment of ten years while under PMLA he faces a maximum sentence of seven years. If he is convicted, these two sentences will run concurrently,” said the ED official.

The official further said that under the Indian laws, undertrials can seek parole, furlough, home food and even treatment at a private hospital if permitted by the court. “All these ‘facilities’ are difficult to avail in the US and therefore, given a choice, Modi would seek to be tried in India rather than the US,” he said.

While furlough is leave from prison, granted to a prisoner as a matter of right, parole is sought for a specific reason including death in a family or marriage of a blood relative.

Modi was arrested by the UK police on March 19 and has been denied bail twice since then. “Last week, when Modi was produced before the Westminster court for his bail hearing, he looked unkempt and dejected, and at one point he even broke down,” said the second official.

“Compared to the body language of Vijay Mallya (who is also challenging his extradition to India), who was always be suited for his hearings, Modi’s body language was a giveaway that he doesn’t expect the verdict to go his way.”

Meanwhile, ED’s probe into Modi’s request for the Vanuatu citizenship has revealed that his application was allegedly rejected owing to media reports that he was being probed by the Directorate of Revenue Intelligence (DRI) and Income Tax (IT) department at the time of his application.

“It was in December 2017, a month before his cover was blown and he was first booked by the CBI and then by the ED, that Modi had applied for citizenship with the South Pacific Ocean nation,” said a senior ED official.

“However, his application was rejected as the processing authorities found that there were reports by the Indian media that he was being probed by the revenue agencies. This was cited as the reason by the Vanuatu government to reject his request.”

The official said that like his uncle Mehul Choksi, who managed to procure citizenship of twin Caribbean islands Antigua and Barbuda, Modi preferred Vanuatu since India does not have a treaty with the nation and Vanuatu allows visa-free travel to more than 120 nations including the UK, all of Europe, Hong Kong, Singapore and Russia. “This would have worked for him as most of his business interest were in Hong Kong, Singapore and UK,” he said.

“Modi and Choksi had started planning for their escape in November 2017, after a new team of officials at the Punjab National Bank’s branch at Brady House in Mumbai expressed concern on issuing letters of credits and letters of undertaking to firms associated with them. While Choksi already had alternative citizenship, Modi applied to Vanuatu but his application was rejected,” said the official.

 

(This story originally appeared on The Economic Times)



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