The banking world is once again facing a security crisis as the National Bank in India becomes the latest victim in a fraud case where three people stole a whooping $1.8 billion.
Three People Were Arrested After the $1.8bn Fraud Case in India
Punjab National Bank Was Involved in Fraud Scam
India’s multinational bank, Punjab National Bank has announced that it has been hit by a large scam scheming in the beginning of this week. Cases of inside jobs were also suspected by the bank for the scammers that enabled this large-scale scheme. Two of its bank employees named Manoj Kharat and Gokulnath Shetty were identified to have a significant connection to a billionaire jeweler named Nirav Modi.
The said jeweler was the owner of Firestar Diamond while his uncle, Mehul Choksi, who was the chairman of a giant jewelry retailer named Gitanjali group. Aside from the two employees above, a third person named Hemant Bhat was also arrested.
The Bank Released a Statement Last Week Regarding the Scam
The bank stated that their system has detected some unauthorized and fraudulent transactions coming from one of its Mumbai branches done by its selected account holders.
The bank officials had also stated that this was a large-scale scheming that was done in chunks or partial withdrawals so that the scam won’t be detected immediately. They also reported that the scam had started around 2011 in one Mumbai branch.
Nirav Modi is a popular jeweller with shops around the world
Neither the bank nor the police investigators have provided details about the said fraud case, which was understandable considering the case and investigation are still ongoing.
Moreover, the authorities have yet to charge both jewelry owners for allegedly cheating bank transactions and as well as the usage of fake documents. The authorities also state that they’re currently searching for Mr. Modi’s whereabouts since his location is still unknown.
Spotted in New York
NDTV Reported Mr. Modis Whereabouts in New York
Mr. Modi has yet to release an official statement about the issue. But he earlier claimed and reiterated that this said fraud case is not in any way, connected to his Firestar Diamond company.
They didn’t even know whether or not the $1.8bn allegedly scammed money was stolen in cash or if it was being repaid for loans. Mr. Modi reiterated that he was proud of being the owner of 17 jewelry branches around the world.
He’s had business branches in Asia, India, United Kingdom, and the United States. His renowned jewelry was even worn by prestigious celebrities like Bollywood or Hollywood stars, including Priyanka Chopra and Kate Winslet.
His net worth had even reached an astounding $1.74bn and currently, he’s India’s 85th richest men. He won’t do anything as ridiculous as this just to tarnish his reputation.
Developing Story: Three More Employees Were Arrested in the Scam
From the two bank staff and a third person that was arrested last week, the police investigators had released a new statement saying that they arrested three more employees which had a probable cause for the said case. Police arrested bank manager last Monday, who was in charge of the foreign exchange department. The arrest of the said potential suspect was solidified because of the information Reuters had obtained stating that a bank manager had aided his younger subordinate in scheming the fraud transactions amounting to $1.8 billion from the year 2011-2017.
The bank had also stated that they’re currently investigating on how the exact scheming took place as well as the process it had undergone. Because of this controversy, the shares of the said bank plummeted down to 7% at the opening of the stock market trade his week.
The police had continued questioning more PNB employees over the week to narrow down their list of possible suspect and accessories for the said fraud case. They’re also trying to reach out to the executives of Mr.Modi’s group in order to determine whether Modi’s employees were also involved in the said fraud. The first potential suspects that were arrested last week.