Industry / Legal

Ex-Samuels CEO Nehal Modi Convicted Of Grand Larceny


Nehal Modi (pictured), the former CEO of Samuels Jewelers, has been convicted in New York State Supreme Court of grand larceny in the first degree, according to the office of Manhattan District Attorney Alvin Bragg Jr.

The jury deliberated for one and a half days before reaching its verdict. Modi will be sentenced on July 22. His lawyer, Roger Bernstein, said he plans to appeal.

Modi, who also served as head of Noble Titan Holdings, was accused of fraudulently obtaining more than $2.6 million worth of diamonds from LLD Diamonds USA, the New York City company owned by diamond baron Lev Leviev.

According to the DA’s office, in March 2015, Modi told LLD he had a deal to sell diamonds to Costco and asked for nearly $800,000 in gems on credit. The next day, he pawned those diamonds at Modell Collateral Loans for $450,000, the DA’s office said.

Prosecutors charged that Modi went back to LLD another three times, and was given another $1 million worth of diamonds for purported sales to Costco. And while Modi did make a series of payments to LLD, he “used the majority of the proceeds for personal use and other business expenses,” and claimed any payment issues were due to a “Costco fulfillment error,” the DA’s office said.

In August 2015, he returned to LLD again, saying he had another deal with Costco. But since he had a $1 million outstanding balance with LLD, the company allowed him to take the additional diamonds on consignment only  and required an up-front payment. The deal also stipulated that Modi didn’t have the authority to sell the diamonds without authorization by LLD.

Even so, Modi pawned the majority of LLD’s diamonds the same day at Modell for approximately $300,000 and sold the remainder to various retailers at large discounts from LLD’s consignment price, the indictment said.

Prior to this case, Modi had paid back $1.2 million of the $2.6 million he owed, the DA’s office said last year.

Bernstein tells JCK that “fewer than half of the overall number of diamonds purchased were pledged as collateral for loans, which is an accepted industry practice, and a substantial number of the pledged diamonds were not foreclosed.

“When Modi was unable to make the remaining payments due to LLD, LLD sought payment from its insurer on transactions it called ‘memo’ transactions. When the insurer rejected the claim, LLD went to the district attorney’s office.”

Modi is the brother of former diamond magnate Nirav Modi, who is currently in jail in London for allegedly defrauding India’s Punjab National Bank of $2 billion. The brothers’ uncle, Mehul Choksi, former chairman of Samuels’ parent company Gitanjali, also faces bank fraud charges and is currently in Antigua.

In March 2021, Indian media reported that local authorities wanted to extradite Nehal Modi for his alleged role in his brother’s case. That case has no relation to this one, Bernstein notes.

Samuels, a 100-year-old jeweler that was once one of America’s largest jewelry chains, liquidated in 2019.

Photo courtesy of Samuels Jewelers

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By: Rob Bates

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