A 'fancy vivid yellow orange cushion cut' diamond fueled PNB fraud: Report

bloomberg
August 30, 2018

New Delhi, Aug 30: The price of a 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 fugitive diamantaire Nirav Modi over about five weeks in 2011, according to a report by a US bankruptcy examiner. The practice of round-tripping--trading a good repeatedly to give the appearance of distinct transactions--was central to the multi-crore Punjab National Bank (PNB) scam - the largest bank fraud in Indian history, according to the report filed August 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 US 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 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 US 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 US, for closer to what it was really worth: $183,000, the examiner wrote.

Less than a week later, Firestar, which has offices on Fifth Avenue in New York City, shipped the diamond back to Fancy Creations in Hong Kong, this time for $1.16 million, the report asserts.

And two weeks after that, A Jaffe, the New York City-based diamond company owned by Modi, sold the diamond to World Diamond Distribution, which the report describes as a Modi shell company in the United Arab Emirates, this time for more than $1.2 million.

Long Journey

The practice of round-tripping, which ultimately totaled $213.8 million between 2011 and 2017, the alleged duration of the fraud, generated shipping invoices that were given to the state-owned PNB to obtain short-term loans using letters of undertaking, according to Carney.

The proceeds were then used to fund Modi’s lifestyle and business entities as well as using the funds from new loans to repay the old ones as they came due, the report states, citing a real-estate trust controlled by Modi that paid $25 million in cash for a luxury apartment in the Ritz Carlton on Central Park South in 2017.

Some of the shipments were so large and high-priced “that the packing slips alone should have raised suspicion,” wrote Carney, a former investigator and prosecutor for the US Securities and Exchange Commission and the Department of Justice.

Fedex Gems

In a break with industry practices, the Modi-owned US companies exported diamonds via FedEx instead of with a bonded courier -- including a 17-carat stone sold for $1.7 million and sent from New York City to Hong Kong -- even though FedEx insures packages only up to $150,000, the report states.

“There is no legitimate business reason to ship diamonds worth millions of dollars without obtaining appropriate insurance,” Carney wrote, citing a gem expert retained by the bankruptcy trustee. The report found “substantial evidence” to back up Indian criminal and civil authorities who say Modi’s US companies and senior officials were involved in transactions related to alleged bank fraud and money laundering.

Modi has previously denied wrongdoing, and a lawyer representing him declined to comment Monday on the examiner’s report. The US companies, Firestar Diamond, A. Jaffe and Fantasy Inc., which all operate out of the same New York offices, filed for Chapter 11 bankruptcy in February. (And the three companies still owe Federal Express about $86,000 in unpaid bills, according to a court filing in their bankruptcy case.)

Gem Cutters

Modi, 47, comes from a family of specialist gem cutters, and he has draped his jewels on Hollywood and Bollywood stars, including Kate Winslet, Naomi Watts and Priyanka Chopra. He bought A. Jaffe, an iconic engagement ring company founded in Manhattan in 1892, to add to his collection of brands in 2007 and opened eponymous boutiques in New York City, Macau, Singapore, Beijing and London. Now, he is reportedly in the U.K. and the Indian government has asked authorities there for his extradition.

The charges against Modi have sent shockwaves through Indian banking and politics as well as the international jewelry industry. The alleged crime undermined the prime minister’s anti-graft image and Punjab National Bank posted India’s biggest-ever quarterly bank loss this year after it took a $2 billion hit.

Punjab National Bank

The US examiner’s report “strengthens PNB’s position as a victim of a complex, multi-year fraud,” and the lender is expected to argue for a share of the sale proceeds once Firestar’s assets are sold and secured creditors are satisfied, said Seth R. Freeman, San Francisco-based senior managing director at financial services advisory firm GlassRatner.

A representative for Macy’s, which had previously bought jewelry from Firestar Diamond Inc., said in an email Monday, “We canceled all purchase activity with the company as soon as we became aware of the situation earlier this year.” Costco Wholesale Corp. and Zale Corp. declined to comment and J.C. Penney’s didn’t answer a message.

Other Modi associates were involved, according to Carney’s report, including Mihir Bhansali, chief executive at two of the Modi-owned US companies. Bhansali went to the office of Firestar Diamond in Dubai shortly after those companies filed for bankruptcy in February, according to an account given by the general manager of the Dubai office to Indian authorities and described in Carney’s report.

Speaking before employees in Dubai, Bhansali folded his hands and bowed, then asked them not to return to India or mention his name to any government authorities, according to the report. Bhansali then took hundreds of thousands of dollars in cash and 50 kilograms of gold and left town, the report asserts.

Bhansali’s lawyer, Thomas McCormack, declined to comment, but said in a letter to the examiner that his client denied any wrongdoing.

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News Network
May 24,2020

New Delhi, May 24: Overwhelmed by the donations that poured in from the society for his help, Phool Mia, the fruit seller in north Delhi's Jagatpuri area whose mangoes were looted by the ordinary people, said that those who helped him have made his "Eid" and have shown that "humanity is still alive".

Video footage that went viral on social media, shows that scores of passers-by looted the unattended crates of mangoes of a fruit seller after a fight broke out in the neighbourhood. The incident took place on Wednesday.

"My stock of mangoes worth Rs 30,000 was kept there. Some persons were fighting with each other fearing which I left the place to avoid any sort of altercation. When I returned, I saw that they were looting the mangoes kept there. There were 50-100 people who were involved in this act," Phool Mia, narrated the ordeal.

"A video got viral about the incident after which people donated to me on a portal. They empathised with me when I was ruined. I thank the media and all those people who have donated from the bottom of my heart as they made my Eid. Now, I would be able to celebrate Eid with my children. This shows humanity is still alive," he added.

However, four people have been arrested on the basis of video footage, Delhi Police said.

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News Network
January 30,2020

Jan 30: The death toll rose to 170 in the new virus outbreak in China on Thursday as foreign evacuees from the worst-hit region begin returning home under close observation and world health officials expressed “great concern” that the disease is starting to spread between people outside of China.

Thursday’s figures cover the previous 24 hours and represent an increase of 38 deaths and 1,737 cases for a total of 7,711. Of the new deaths, 37 were in the epicenter of the outbreak in Hubei province and one in the southwestern province of Sichuan.

The news comes as the 195 Americans evacuated from Wuhan, the Hubei province city of 11 million where the outbreak originated, are undergoing three days of testing and monitoring at a Southern California military base to make sure they do not show signs of the virus.

A group of 210 Japanese evacuees from Wuhan landed Thursday at Tokyo’s Haneda airport on a second government chartered flight, according to the foreign ministry. Reports said nine of those aboard the flight showed signs of cough and fever. Three of the 206 Japanese who returned on Wednesday tested positive for the new coronavirus, Prime Minister Shinzo Abe said during a parliamentary session. Two of them showed no symptoms of the disease.

France, New Zealand, Australia and other countries are also pulling out their citizens or making plans to do so.

The World Health Organization emergencies chief said the few cases of human-to-human spread of the virus outside China — in Japan, Germany, Canada and Vietnam — were of “great concern” and were part of the reason the U.N. health agency’s director-general was reconvening a committee of experts on Thursday to assess whether the outbreak should be declared a global emergency.

The new virus has now infected more people in China than were sickened there during the 2002-2003 SARS outbreak.

Dr. Michael Ryan spoke at a news conference in Geneva on Wednesday after returning from a trip to Beijing to meet with Chinese President Xi Jinping and other senior government leaders. He said China was taking “extraordinary measures in the face of an extraordinary challenge” posed by the outbreak.

To date, about 99% of the cases are in China. Ryan estimated the death rate of the new virus at 2%, but said the figure was very preliminary. With fluctuating numbers of cases and deaths, scientists are only able to produce a rough estimate of the fatality rate and it’s likely many milder cases of the virus are being missed.

In comparison, the SARS virus killed about 10% of people who caught it. The new virus is from the coronavirus family, which includes those that can cause the common cold as well as more serious illnesses such as SARS and MERS.

Scientists say there are many questions to be answered about the new virus, including just how easily it spreads and how severe it is.

In a report published Wednesday, Chinese researchers suggested that person-to-person spread among close contacts occurred as early as mid-December.

“Considerable efforts” will be needed to control the spread if this ratio holds up elsewhere, researchers wrote in the report, published in the New England Journal of Medicine.

More than half of the cases in which symptoms began before Jan. 1 were tied to a seafood market, but only 8% of cases after that have been, researchers found. They reported the average incubation period was five days.

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Agencies
August 9,2020

When researcher Monica Gandhi began digging deeper into outbreaks of the novel coronavirus, she was struck by the extraordinarily high number of infected people who had no symptoms.

A Boston homeless shelter had 147 infected residents, but 88% had no symptoms even though they shared their living space. A Tyson Foods poultry plant in Springdale, Ark., had 481 infections, and 95% were asymptomatic.

Prisons in Arkansas, North Carolina, Ohio and Virginia counted 3,277 infected people, but 96% were asymptomatic.

During its seven-month global rampage, the coronavirus has claimed more than 700,000 lives. But Gandhi began to think the bigger mystery might be why it has left so many more practically unscathed.

What was it about these asymptomatic people, who lived or worked so closely to others who fell severely ill, she wondered, that protected them? Did the "dose" of their viral exposure make a difference? Was it genetics? Or might some people already have partial resistance to the virus, contrary to our initial understanding?

Efforts to understand the diversity in the illness are finally beginning to yield results, raising hope that the knowledge will help accelerate development of vaccines and therapies - or possibly even create new pathways toward herd immunity in which enough of the population develops a mild version of the virus that they block further spread and the pandemic ends.

"A high rate of asymptomatic infection is a good thing," said Gandhi, an infectious-disease specialist at the University of California at San Francisco. "It's a good thing for the individual and a good thing for society."

The coronavirus has left numerous clues - the uneven transmission in different parts of the world, the mostly mild impact on children. Perhaps most tantalizing is the unusually large proportion of infected people with mild symptoms or none at all. The Centers for Disease Control and Prevention last month estimated that rate at about 40%.

Those clues have sent scientists off in different directions: Some are looking into the role of the receptor cells, which the virus uses to infiltrate the body, to better understand the role that age and genetics might play. Others are delving into masks and whether they may filter just enough of the virus so those wearing them had mild cases or no symptoms at all.

The theory that has generated the most excitement in recent weeks is that some people walking among us might already have partial immunity.

When SARS-CoV-2, the technical name of the coronavirus that causes the disease covid-19, was first identified on Dec. 31, 2019, public health officials deemed it a "novel" virus because it was the first time it had been seen in humans who presumably had no immunity from it whatsoever. There's now some very early, tentative evidence suggesting that assumption might have been wrong.

One mind-blowing hypothesis - bolstered by a flurry of recent studies - is that a segment of the world's population may have partial protection thanks to "memory" T cells, the part of our immune system trained to recognize specific invaders. 

This could originate from cross-protection derived from standard childhood vaccinations. Or, as a paper published Tuesday in Science suggested, it could trace back to previous encounters with other coronaviruses, such as those that cause the common cold.

"This might potentially explain why some people seem to fend off the virus and may be less susceptible to becoming severely ill," National Institutes of Health Director Francis Collins remarked in a blog post this past week.

On a population level, such findings, if validated, could be far-reaching.

Hans-Gustaf Ljunggren, a researcher at Sweden's Karolinska Institute, and others have suggested that public immunity to the coronavirus could be significantly higher than what has been suggested by studies. In communities in Barcelona, Boston, Wuhan and other major cities, the proportion of people estimated to have antibodies and therefore presumably be immune has mostly been in the single digits. But if others had partial protection from T cells, that would raise a community's immunity level much higher.

This, Ljunggren said, would be "very good news from a public health perspective."

Some experts have gone so far as to speculate about whether some surprising recent trends in the epidemiology of the coronavirus - the drop in infection rates in Sweden where there have been no widespread lockdowns or mask requirements, or the high rates of infection in Mumbai's poor areas but little serious disease - might be due to preexisting immunity.

Others say it's far too early to draw such conclusions. Anthony Fauci, the United States' top infectious-disease expert, said in an interview that while these ideas are being intensely studied, such theories are premature. He said at least some partial preexisting immunity in some individuals seems a possibility.

And he said the amount of virus someone is exposed to - called the inoculum - "is almost certainly an important and likely factor" based on what we know about other viruses.

But Fauci cautioned that there are multiple likely reasons - including youth and general health - that determine whether a particular individual shrugs off the disease or dies of it. That reinforces the need, in his view, for continued vigilance in social distancing, masking and other precautions.

"There are so many other unknown factors that maybe determine why someone gets an asymptomatic infection," Fauci said. "It's a very difficult problem to pinpoint one thing."

- - -

News headlines have touted the idea based on blood tests that 20% of some New York communities might be immune, 7.3% in Stockholm, 7.1% in Barcelona. Those numbers come from looking at antibodies in people's blood that typically develop after they are exposed to a virus. But scientists believe another part of our immune system - T cells, a type of white blood cell that orchestrates the entire immune system - could be even more important in fighting against the coronavirus.

Recent studies have suggested that antibodies from the coronavirus seem to stick around for two to three months in some people. While work on T cells and the coronavirus is only getting started - testing T cells is much more laborious than antibody testing - previous research has shown that, in general, T cells tend to last years longer.

One of the first peer-reviewed studies on the coronavirus and T cells was published in mid-May in the journal Cell by Alessandro Sette, Shane Crotty and others at the La Jolla Institute for Immunology near San Diego.

The group was researching blood from people who were recovering from coronavirus infections and wanted to compare that to samples from uninfected controls who were donors to a blood bank from 2015 to 2018. The researchers were floored to find that in 40% to 60% of the old samples, the T cells seemed to recognize SARS-CoV-2.

"The virus didn't even exist back then, so to have this immune response was remarkable," Sette said.

Research teams from five other locations reported similar findings. In a study from the Netherlands, T cells reacted to the virus in 20% of the samples. In Germany, 34%. In Singapore, 50%.

The different teams hypothesized this could be due to previous exposure to similar pathogens. Perhaps fortuitously, SARS-CoV-2 is part of a large family of viruses. Two of them - SARS and MERS - are deadly and led to relatively brief and contained outbreaks. Four other coronavirus variants, which cause the common cold, circulate widely each year but typically result in only mild symptoms. Sette calls them the "less-evil cousins of SARS-CoV-2."

This week, Sette and others from the team reported new research in Science providing evidence the T cell responses may derive in part from memory of "common cold" coronaviruses.

"The immune system is basically a memory machine," he said. "It remembers and fights back stronger."

The researchers noted in their paper that the strongest reaction they saw was against the spike proteins that the virus uses to gain access to cells - suggesting that fewer viral copies get past these defenses.

"The current model assumes you are either protected or you are not - that it's a yes or no thing," Sette added. "But if some people have some level of preexisting immunity, that may suggest it's not a switch but more continuous."

- - -

More than 2,300 miles away, at the Mayo Clinic in Cleveland, Andrew Badley was zeroing in the possible protective effects of vaccines.

Teaming up with data experts from Nference, a company that manages their clinical data, he and other scientists looked at records from 137,037 patients treated at the health system to look for relationships between vaccinations and coronavirus infection.

They knew that the vaccine for smallpox, for example, had been shown to protect against measles and whooping cough. Today, a number of existing vaccines are being studied to see whether any might offer cross-protection against SARS-CoV-2.

When SARS-CoV-2, the technical name of the coronavirus that causes the disease covid-19, was first identified on Dec. 31, 2019

The results were intriguing: Seven types of vaccines given one, two or five years in the past were associated with having a lower rate of infection with the new coronavirus. Two vaccines in particular seemed to show stronger links: People who got a pneumonia vaccine in the recent past appeared to have a 28% reduction in coronavirus risk. Those who got polio vaccines had a 43% reduction in risk.

Venky Soundararajan, chief scientific officer of Nference, remembers when he first saw how large the reduction appeared to be, he immediately picked up his phone and called Badley: "I said, 'Is this even possible?'"

The team looked at dozens of other possible explanations for the difference. It adjusted for geographic incidence of the coronavirus, demographics, comorbidities, even whether people had had mammograms or colonoscopies, under the assumption that people who got preventive care might be more apt to social distance. But the risk reduction still remained large.

"This surprised us completely," Soundararajan recalled. "Going in we didn't expect anything or maybe one or two vaccines showing modest levels of protection."

The study is only observational and cannot show a causal link by design, but Mayo researchers are looking at a way to quantify the activity of these vaccines on the coronavirus to serve as a benchmark to the new vaccines being created by companies such as Moderna. If existing vaccines appear as protective as new ones under development, he said, they could change the world's whole vaccine strategy.

- - -

Meanwhile, at NIH headquarters in Bethesda, Md., Alkis Togias has been laser-focused on one group of the mildly affected: children. He wondered whether it might have something to do with the receptor known as ACE2, through which the virus hitchhikes into the body.

In healthy people, the ACE2 receptors perform the important function of keeping blood pressure stable. The novel coronavirus latches itself to ACE2, where it replicates. Pharmaceutical companies are trying to figure out how to minimize the receptors or to trick the virus into attaching itself to a drug so it does not replicate and travel throughout the body.

Was it possible, Togias asked, that children naturally expressed the receptor in a way that makes them less vulnerable to infection?

He said recent papers have produced counterintuitive findings about one subgroup of children - those with a lot of allergies and asthma. The ACE2 receptors in those children were diminished, and when they were exposed to an allergen such as cat hair, the receptors were further reduced. Those findings, combined with data from hospitals showing that asthma did not seem to be a risk factor for the respiratory virus, as expected, have intrigued researchers.

"We are thinking allergic reactions may protect you by down-regulating the receptor," he said. "It's only a theory of course."

Togias, who is in charge of airway biology for the National Institute of Allergy and Infectious Diseases, is looking at how those receptors seem to be expressed differently as people age, as part of a study of 2,000 U.S. families. By comparing those differences and immune responses within families, they hope to be able to better understand the receptors' role.

Separately, a number of genetic studies show variations in genes associated with ACE2 with people from certain geographic areas, such as Italy and parts of Asia, having distinct mutations. No one knows what significance, if any, these differences have on infection, but it's an active area of discussion in the scientific community.

- - -

Before the pandemic, Gandhi, the University of California researcher, specialized in HIV. But like other infectious-disease experts these days, she has spent many of her waking hours thinking about the coronavirus. And in scrutinizing the data on outbreaks one day, she noticed what might be a pattern: People were wearing masks in the settings with the highest percentage of asymptomatic cases.

The numbers on two cruise ships were especially striking. In the Diamond Princess, where masks weren't used and the virus was likely to have roamed free, 47% of those tested were asymptomatic. But in the Antarctic-bound Argentine cruise ship, where an outbreak hit in mid-March and surgical masks were given to all passengers and N95 masks to the crew, 81% were asymptomatic.

Similarly high rates of asymptomatic infection were documented at a pediatric dialysis unit in Indiana, a seafood plant in Oregon and a hair salon in Missouri, all of which used masks. Gandhi was also intrigued by countries such as Singapore, Vietnam and the Czech Republic that had population-level masking.

"They got cases," she noted, "but fewer deaths."

The scientific literature on viral dose goes back to around 1938 when scientists began to find evidence that being exposed to one copy of a virus is more easily overcome than being exposed to a billion copies. Researchers refer to the infectious dose as ID50 - or the dose at which 50% of the population would become infected.

While scientists do not know what that level might be for the coronavirus (it would be unethical to expose humans in this way), previous work on other nonlethal viruses showed that people tend to get less sick with lower doses and more sick with higher doses. A study published in late May involving hamsters, masks and SARS-CoV-2 found that those given coverings had milder cases than those who did not get them.

In an article published this month in the Journal of General Internal Medicine, Gandhi noted that in some outbreaks early in the pandemic in which most people did not wear masks, 15% of the infected were asymptomatic. But later on, when people began wearing masks, the rate of asymptomatic people was 40% to 45%.

She said the evidence points to masks not just protecting others - as U.S. health officials emphasize - but protecting the wearer as well. Gandhi makes the controversial argument that while people mostly have talked about asymptomatic infections as terrifying due to how people can spread the virus unwittingly, it could end up being a good thing.

"It is an intriguing hypothesis that asymptomatic infection triggering immunity may lead us to get more population-level immunity," Gandhi said. "That itself will limit spread."

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