The Central Bureau of Investigation (CBI) has arrested Sandeep Bharat Mistry, a close aide of fugitive diamantaire Nirav Modi, after he was deported from the United Arab Emirates in connection with the $2 billion Punjab National Bank (PNB) fraud case, officials said on Tuesday.
Mistry arrived at Mumbai airport at 11.55pm on Monday and was taken into custody by officers of the CBI's Bank Securities and Fraud Branch (BSFB). He was produced before a Mumbai court and sent to judicial custody. The agency is expected to seek his police custody for questioning, officials said.
The CBI and Enforcement Directorate (ED) had both charge-sheeted Mistry in connection with the alleged fraud, which involved fictitious international trade transactions. An Interpol Red Notice against him was issued in July this year.
Mistry's alleged role in the PNB fraud
According to CBI officials, Mistry allegedly acted as an important link between several entities associated with Modi's business operations and was involved in managing their day-to-day affairs.
An investigating officer alleged that Mistry issued instructions through clandestine, self-deleting communication platforms in an effort to conceal evidence. He was also accused of facilitating the preparation of forged import-export documents to create the appearance of genuine trade involving diamonds, gold and pearl jewellery.
Officials further alleged that Mistry and other accused persons coerced dummy directors of overseas companies by threatening them with arrest, moving them to other locations, taking possession of their electronic devices and compelling them to sign documents that falsely represented them as the genuine owners of the companies.
Another CBI officer alleged that Mistry also participated in siphoning funds from the bank accounts of dummy companies in the UAE.
Mistry's name has featured in the PNB fraud investigation for several years. The 2021 UK court judgment in Nirav Modi's extradition proceedings also referred to evidence concerning Mistry and other associates, including allegations surrounding Dubai-based companies, dummy directors and the movement of funds.
Interpol alert led to his location in UAE
The CBI said Mistry was traced and “geolocated” by UAE authorities following the Interpol Red Notice. He was subsequently arrested by the UAE authorities, after which the process to deport him to India was initiated.
A senior CBI officer said the agency had managed to trace and bring Mistry back to India within about two months of the Interpol notice being issued, describing the operation as an example of international coordination between law enforcement agencies.
The latest development comes as Indian agencies continue to pursue individuals linked to the PNB fraud who remain outside the country. In February, the ED moved proceedings under the Fugitive Economic Offenders Act against Mistry, along with Nirav Modi's brothers Neeshal and Nehal Modi and senior Firestar executive Aditya Nanavati.
The ED's action was aimed at having the accused declared fugitive economic offenders. Under the Fugitive Economic Offenders Act, the agency can seek attachment and confiscation of properties belonging to individuals declared fugitive economic offenders.
Mistry was named among Nirav Modi associates
Mistry was identified as a director of a company linked to Modi's overseas business operations. His name appeared among several Nirav Modi associates wanted by Indian investigating agencies after the PNB fraud came to light.
An earlier investigation by the Enforcement Directorate identified Mistry as being associated with World Diamond Distribution FZE in Dubai. The agency had said overseas companies linked to Modi were allegedly used to route and layer funds obtained through fraudulent transactions.
The CBI had also named Mistry in a supplementary charge sheet filed in 2019 in the wider case against Nirav Modi. The charge sheet included allegations of criminal intimidation and named several other accused, including Nehal Modi and Mihir Bhansali.
Nirav Modi, who is facing proceedings in the UK, has been accused by Indian agencies of defrauding PNB through fraudulent Letters of Undertaking and related transactions. A UK court in 2021 found that the evidence met the threshold required for his extradition case to proceed, although that proceeding was separate from a determination of guilt in India.
CBI says over 175 wanted persons brought back
Mistry's return is part of the CBI's wider efforts to locate and bring back wanted persons from overseas.
The agency said it has brought back more than 175 wanted criminals to India in recent years through coordination with foreign authorities and Interpol channels. The CBI functions as India's National Central Bureau for Interpol and uses the BHARATPOL platform to coordinate requests between Indian law enforcement agencies and international police channels.
The agency had similarly secured the extradition of Red Notice subject Amritpal Singh from Moldova earlier this month, coordinating with the Ministry of External Affairs, Ministry of Home Affairs and Punjab Police.
In Mistry's case, officials said the cooperation of UAE authorities enabled his location, arrest and subsequent deportation to India.
The CBI is now expected to question Mistry about the alleged movement of funds, overseas companies and the preparation of documents linked to the PNB fraud as the investigation continues.