Indian businessmen are no strangers to being on the wrong side of the law, especially in the United States. The latest being billionaire Gautam Adani who is currently mired in a scandalous bribery charge. But he isn’t the first Indian businessman to have his brush with the U.S. law. In fact, several Indian businessmen have been charged or indicted with crimes in North America over the years, primarily involving financial fraud, money laundering, and violations of financial regulations. Here are a few prominent cases:
1. Nirav Modi
Charges: Fraud, money laundering, wire fraud, and conspiracy.
Details: Nirav Modi, the billionaire jeweler and founder of the luxury jewelry brand Nirav Modi, was involved in a massive financial fraud involving Punjab National Bank (PNB), where he allegedly defrauded the bank of over $2 billion. The scheme involved the use of fraudulent Letters of Undertaking (LoUs) issued by PNB to secure loans from international banks.
Legal Proceedings: He was charged in the U.S. as part of an international financial crime investigation. Modi was arrested in the UK in 2019 and was fighting extradition to India. U.S. authorities have also pursued legal action against him, citing money laundering and wire fraud.
2. Vikram Pandit (Citigroup Case)
Charges: Although not criminally charged, Vikram Pandit, the former CEO of Citigroup, was embroiled in controversy during the financial crisis of 2008. Citigroup required a massive government bailout. While Pandit was not criminally charged, there was significant public and political scrutiny over his compensation during the crisis.
Details: One of the key points of controversy was Pandit’s compensation package. Despite Citigroup’s financial struggles, Pandit received millions in salary, bonuses, and stock options. In 2009, when the company was still recovering from the crisis, Pandit’s compensation was a matter of public criticism.
Legal Proceedings: While Citigroup itself was investigated by U.S. authorities for its role in the financial crisis, no personal criminal charges were brought against Pandit or other top executives. The investigations primarily focused on systemic issues within the financial industry rather than individual wrongdoing by leaders like Pandit.
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3. Sanjay Shah (The Danske Bank Scandal)
Charges: Money laundering, conspiracy to commit money laundering.
Details: Sanjay Shah, an Indian-born British national, is at the center of a money-laundering scandal involving Danske Bank, a Danish bank. Shah is accused of helping facilitate the laundering of around $200 billion through the bank’s Estonian branch. U.S. authorities have indicted Shah in connection with these actions, as the U.S. financial system was used for some of the transactions.
Legal Proceedings: He faces extradition to the United States and Denmark for his involvement in the scandal.
4. Rajat Gupta
Charges: Insider trading.
Details: Rajat Gupta, a former managing director of McKinsey & Company and a board member of Goldman Sachs, was convicted in 2012 of insider trading charges. He allegedly provided confidential information about Goldman Sachs to his friend, hedge fund manager Rajat K. Gupta, who then traded on that information. The case was part of a larger crackdown on insider trading on Wall Street.
Legal Proceedings: Gupta was sentenced to two years in prison in the U.S. for his role in the insider trading scheme.
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5. Vijay Mallya
Charges: Vijay Mallya, the former owner of Kingfisher Airlines and the now-defunct liquor giant UB Group, faced charges of financial crimes, including money laundering and bank fraud in the U.S. Mallya is accused of defrauding Indian banks of over $1 billion. The U.S. authorities filed money laundering charges in 2017 in relation to his alleged financial crimes.
Details: Mallya fled India in 2016 and is currently in the UK, where efforts to extradite him to India have been ongoing. While the U.S. has not directly charged him under American law, his case has significant international implications.
Legal Proceedings: Although U.S. authorities have not directly prosecuted Mallya, his case remains under investigation, especially regarding his alleged involvement in money laundering and fraud. The U.S. could pursue further legal action if new evidence surfaces.
6. Gautam Adani
Charges: The Indian billionaire and chairman of the Adani Group, has faced significant legal and financial scrutiny, especially in the United States. Although there have not been any direct criminal charges filed against him by U.S. authorities, Adani’s business dealings and controversies have attracted attention from U.S. regulators and the media, particularly concerning allegations of fraud, stock manipulation, and environmental violations.
Details: The Hindenburg report led to a significant drop in the stock prices of Adani’s listed companies, causing substantial financial loss to investors, including international entities.
The U.S. SEC had previously launched inquiries into the Adani Group’s stock price movements and trading practices in the past, especially relating to its international operations and regulatory compliance.
Legal Proceedings: As of 2024, the scrutiny surrounding Adani continues, especially in light of the Hindenburg Research report. The Indian regulators, including the Securities and Exchange Board of India (SEBI), have initiated investigations, while U.S. regulators like the SEC have kept an eye on developments, particularly in relation to stock market practices and investor protection.
Adani and other top executives at the Adani Group were indicted in New York on Nov. 20, 2024 by U.S. prosecutors for alleged role in a multi-million-dollar bribery and fraud scheme involving plans to develop a major solar power plant.
These cases highlight some of the legal issues faced by Indian businessmen in the U.S., mainly involving financial crimes, insider trading, and fraud. While some cases involve direct criminal charges, others have seen significant legal scrutiny or civil actions.