US govt seeks Nirav Modi's extradition upon violation of RICO Act

Moneycontrol News

The US government may stake claim for diamantaire Nirav Modi's extradition from the UK in connection with a series of bankruptcy cases. Sources said that an American bankruptcy court could charge Modi with violations in the Racketeer Influenced and Corrupt Organisations (RICO) Act. At present, he is in the Wandsworth Jail in the UK.

Three companies linked to Modi, Firestar Diamond International, A Jaffe, and Fantasy Inc, filed for bankruptcy in the US in February 2018. The court appointed a trustee to probe the companies, who then filed a complaint against Modi and two other executives of these companies. They were accused of breaching fiduciary duty, aiding and abetting in breaching fiduciary duty and violating the RICO Act.

A source in the ED told Hindustan Times that the case in the US was also linked to Modi's alleged scam in India.

The RICO Act is a federal law in the US enforced in 1970. It was designed to fight organised crime in the country. It allows prosecution for racketeering activity performed as a part of a criminal enterprise. If a person has committed at least two acts of racketeering activity from a list of 35 crimes within 10 years, he can be fined up to $25,000 and can face a 20-year prison sentence.

Modi is the prime accused in the biggest scam in the Indian banking industry, which was uncovered at Punjab National Bank in February 2018. In India, Modi would face seven years of imprisonment under the Prevention of Money Laundering Act (PMLA). However, in the US, the punishment is stiffer, and the sentence is longer.

In India, those who are under trial can ask for parole, furlough and other benefits if the court allows it. However, these facilities are not allowed in the US.

Sources in the ED are of the opinion that, if given a choice, Modi would rather face the authorities in India than those in the US. They believe that Modi may not oppose the Indian government's extradition request strongly.

The Economic Times quoted an ED official as saying that India would have the first right to have Modi extradited since India moved the UK government first.

The UK police arrested Modi on March 19, and he has been denied bail twice by the courts on the suspicion that he will try to flee the country again.