New Delhi: Fugitive diamond trader Mehul Choksi’s firm in the US, Samuels Jewelers Inc., may have sold lab-grown diamonds to customers by falsely certifying them as natural stones, a probe ordered by a US bankruptcy court has alleged.
The report added that the process was carried out through a laboratory “secretly” controlled by Choksi through a British Virgin Islands (BVI) firm, the Indian Express reported.
The forensic report also said Samuels Jewelers, owned by Gitanjali Gems Ltd, received about $20 million (Rs 139 crore) from the fraudulent Letters of Undertaking (LoUs) issued to Gitanjali by Punjab National Bank (PNB) in India and the money was received through a “sham royalty agreement”, the paper reported.
Earlier, a former senior employee had alleged that the company would falsify the quality of its diamonds and even pass off fake diamonds as real ones.
“The diamonds were sold at a premium in the name of brand value, cuts and certifications that were given out. The certifications too were forged. A diamond that claimed to be of Grade A in a purchase made was actually Grade C,” the company’s former managing director Santosh Srivastava told Moneycontrol last year. “The diamonds that were passed as precious and rare and were actually lab produced coasted only 5%-10% of the cost it was sold at,” he said.
Choksi, who is one of the key people accused of defrauding Punjab National Bank of $2 billion, fled India before the accusations surfaced last year. Choksi, along with his nephew, diamond tycoon Nirav Modi, are accused of colluding with a handful of bankers to secure credit from overseas banks using fraudulent guarantees. Both have denied the allegations and have moved abroad.