The price of the large yellow diamond alternately shrank and spiked by about a million dollars as it moved across the globe.
The three-carat gem was shipped at least four times between shadowy companies allegedly controlled by Indian billionaire Nirav Modi over about five weeks in 2011, according to a report by a U.S. bankruptcy examiner. The practice of round-tripping–trading a good repeatedly to give the appearance of distinct transactions–was central to the largest bank fraud in Indian history and ensuing criminal charges against celebrity jeweler Modi, according to the report filed Aug. 25.
The rapid-fire sales were described as part of a plan in which
Modi and associates fraudulently borrowed approximately $4 billion over a period of years by manufacturing sham transactions purportedly to ‘import’ diamonds and other gems into India using a web of more than 20 secretly controlled shell entities,” wrote John J. Carney, the examiner in the bankruptcy case of three U.S. jewelry companies indirectly owned by Modi.
The firms sought protection from creditors in February in New York as the celebrity jeweler’s empire unraveled. Authorities brought criminal charges against him and alleged accomplices, and Modi became an international fugitive. He’s denied doing anything wrong.
The “fancy vivid yellow orange cushion cut” diamond was first sold by Firestar Diamond Inc., a U.S. company indirectly owned by Modi, and shipped to Fancy Creations Company Ltd., a foreign shell company in Hong Kong also allegedly controlled by Modi, in August 2011, the report says. The price was almost $1.1 million.
The colorful stone was then shipped out two weeks later by Solar Export, a partnership formed by the Nirav Modi family trust, back to Firestar Diamond in the U.S., for closer to what...