Indian Fugitive Benefited From This Caribbean Citizenship By Investment Program

By NAN Contributor

News Americas, NEW YORK, NY, Fri. July 27, 2018: In February 2018, the Punjab National Bank (PNB), India’s second-largest state-run bank, announced to stock exchange authorities in Mumbai, India, that it has been defrauded of nearly US $2 bn. This month, five months after the scandal, one of the co-accused at the center of the fraud showed up on the Caribbean nation of Antigua & Barbuda, thanks to the country’s Citizenship by Investment Program, (CIP).

Mehul Choksi of the Gitanjali Group and the co-accused in the PNB bank fraud case, the biggest in India’s history, escaped India on January 4th on an Indian passport and took the oath of allegiance in Antigua & Barbuda on January 15th.

This granted him an Antigua & Barbuda passport which gives him citizenship for life, with the right to live and work in the country and visa-free travel to more than 125 countries and territories, including the Schengen Area, the United Kingdom, Hong Kong and Singapore.

Six months later, on July 8th, Choksi reportedly used his brand new Antigua & Barbuda passport to travel to his new “home,” according to India Today TV, and arrived at the VC Bird International airport.

While it is unclear how much Choksi paid for his citizenship, citizenship in Antigua & Barbuda by economic investment can be obtained for as little as USD 400,000 via investment in an approved real estate project. a contribution to the National Development Fund, (NDF) of U.S. $100,000, or a U.S. $1.5 million approved business investment. Real estate projects are approved by the Cabinet, following a recommendation by the Antigua and Barbuda Investment Authority, (ABIA).

FLEEING INDIA

Choksi and the main accused, Nirav Modi, his nephew, both fled India in nearly a fortnight before the scam was detected.

Both are jewelers to the stars in India. Choksi was the managing director of ‘Gitanjali Gems,’ who with help from some staffers at a PNB bank, raised billions of dollars in foreign credit on fake bank guarantees between 2011 and 2017.

The scam, which reportedly began in 2011, was only detected in January this year, but PNB officials reported it to the probe agencies in February.

The Antiguan government insists Choksi had obtained the passport and his Antiguan citizenship November last year, months before the PNB scandal broke.

THE CIU RESPONSE

“Choksi’s application was subject to robust due diligence international investigation, which is conducted on each principal applicant and dependent, by reputable agencies, including the International Criminal Police Organisation and the CARICOM Implementing Agency for Crime and Security (IMPACS),” the CIU of Antigua has said in a statement, while adding that the 2017 investigation revealed no derogatory information about Choksi.

However, The CBI, the nodal agency of India for Interpol, said that no information regarding background check of Choksi was sought from it by the international agency while the Financial Express reports that a warrant was reportedly issued by Karnataka High Court against Choksi in 2016 in a separate matter.

Now India wants Choksi back to answer charges on the fraud, except the country has no extradition treaty with Antigua & Barbuda.

And the country’s Enforcement Directorate has moved to a Special court in Mumbai seeking to declare Modi and Choksi as ‘fugitive economic offenders,’ which will enable them to seize their assets in India.

Modi, 47, has also been placed on the Interpol’s Wanted List. Choksi, however, is not. The PNB bank has been forced to close much of its operation in Mumbai because of the fraud and for now, the Daily Observer newspaper is reporting that the government will make every effort as per law to honor a “legitimate” request from the Indian authorities.

Choksi, through his attorney, caims he had taken Antigua citizenship last year to expand his business as the passport of the Caribbean nation provides visa-free travel to 132 countries.

In a statement issued by his attorney David Dorsett on the diamantaire’s behalf, Choksi said there was no truth in the allegations leveled by the Indian government, the Daily Observer, a newspaper in Antigua reported.

CIP IN THE SPOTLIGHT

The Choksi scandal puts another damper on the CIP programs pushed by Antigua & Barbuda as well as St. Kitts & Nevis, Dominica, Grenada and St. Lucia, as it continues to be dismissed as “passports for sale” to the wealthy and as tax havens for the rich to hide their wealth.

The U.S. State Department this year, in its annual International Narcotics Control Strategy Report (INCSR), again slammed the Antigua CIP program. It said the country’s “CIU does not maintain adequate autonomy from politicians to prevent political interference in its decisions” and it pointed to the February 2017 approved CIP application for Alexandre Cazes, since deceased, the alleged operator of AlphaBay, the world’s largest dark web marketplace.

In January, Canadian Prime Minister Justin Trudeau also slammed the program, saying his government will only consider lifting visa requirements for Antiguan and Barbudans if “significant improvements” were made to CIP.

Trudeau at the time said Antigua and Barbuda did not live up to the high standards expected of it and he stressed that Canada will not compromise the security of its citizens.

And the Organization for Economic Cooperation and Development, (OECD), has criticized the programs as “a backdoor to money-launderers and tax evaders.”

“While investors may be interested in these for legitimate reasons, including greater mobility because of visa-free travel, better education and job opportunities for children, or the right to live in a country with political stability, there is the potential for misuse,” the Paris-based organization said in February.

The Choksi case gives them the ammunition they need to keep piling on the critique.