Belgian authorities have detained Indian jeweler Mehul Choksi, a fugitive accused in one of India’s largest bank frauds totaling $1.8 billion, as international cooperation intensifies to bring financial criminals to justice.
At a Glance
- Mehul Choksi was arrested in Belgium based on an extradition request from India in connection with a $1.8 billion fraud against Punjab National Bank
- The arrest was celebrated by Hariprasad SV, the whistleblower who initially alerted Indian authorities about the potential scam in 2016
- Choksi and his nephew Nirav Modi allegedly defrauded India’s second-largest state bank of ₹13,850 crore ($1.8 billion) through complex forgery and shell companies
- Choksi’s legal team plans to oppose extradition, citing his cancer treatment and claiming he isn’t a flight risk
Whistleblower Celebrates Long-Sought Arrest
Seven years after one of India’s largest bank frauds was uncovered, Belgian authorities have arrested Mehul Choksi, the fugitive Indian diamantaire accused of orchestrating the $1.8 billion scam against Punjab National Bank (PNB). The detention came following an extradition request from Indian officials, who have been pursuing Choksi since he fled India in January 2018, just before the scandal became public. This latest development marks a significant breakthrough in India’s efforts to bring financial fugitives to justice and recover embezzled funds.
Hariprasad SV, the whistleblower who first raised alarms about Choksi’s activities, expressed satisfaction with the arrest. Hariprasad had filed complaints with Bengaluru Police in 2015 and later alerted India’s Prime Minister’s Office in 2016 about potential large-scale fraud by Choksi’s Gitanjali Group. According to reports, the company had secured loans of approximately ₹9,872 crores with minimal collateral assets, affecting dozens of people across India.
Global Flight of a Financial Fugitive
Choksi’s journey as a fugitive began on January 2, 2018, when he fled India just before the massive fraud case became public. Initially escaping to the United States, he soon relocated to Antigua after obtaining citizenship there in 2017 through an investment program. His flight pattern reflects the challenges authorities face when pursuing financial criminals who use their wealth to secure safe havens in multiple jurisdictions.
In 2021, Choksi was briefly detained in Dominica after allegedly entering the country illegally from Antigua. Following legal proceedings, he was deported back to Antigua rather than India. Most recently, he reportedly traveled to Belgium, allegedly seeking cancer treatment. This movement to Belgium, a major diamond trading hub where Choksi had previous business connections, ultimately led to his current detention.
The Mechanics of a Billion-Dollar Bank Fraud
The fraud that Choksi and his nephew Nirav Modi are accused of perpetrating involved Punjab National Bank, India’s second-largest state-run lender. According to investigators, the scheme utilized fraudulently obtained Letters of Undertaking (LoUs) from a Mumbai branch of PNB. These financial instruments allowed the accused to secure massive loans from overseas branches of Indian banks, essentially creating a complex web of shell companies and false documentation.
While Choksi has consistently denied any wrongdoing, his lawyer Vijay Aggarwal has already indicated plans to appeal for his release. The legal strategy will focus on Choksi’s ongoing cancer treatment and a claim that he does not present a flight risk, despite his history of moving between multiple countries to avoid prosecution. His nephew and co-accused Nirav Modi remains in custody in Britain after losing an extradition appeal, providing some precedent for international cooperation in the case.
International Cooperation in Financial Crime Prevention
Choksi’s arrest demonstrates growing international cooperation in pursuing financial criminals across borders. India’s extradition request to Belgium came after an Interpol Red Notice against Choksi was deleted, requiring direct diplomatic engagement between the two nations. The case highlights the increasing willingness of countries to work together on major financial crimes that threaten the integrity of the global banking system.
This development follows another recent extradition victory for India, when a Pakistani-born Canadian businessman involved in the 2008 Mumbai terrorist attacks was transferred from the United States to face charges in India. These cases signal a shift toward greater accountability for those accused of serious financial and terrorist crimes, even when they seek refuge in foreign jurisdictions. For financial institutions worldwide, the PNB fraud case serves as a stark reminder of the need for robust safeguards against sophisticated fraudulent schemes.
