In a major breakthrough in the ongoing probe into the $2 billion Punjab National Bank (PNB) fraud, the Central Bureau of Investigation (CBI) has taken into custody Sandeep Mistry, a crucial aide of fugitive diamantaire Nirav Modi. Mistry was extradited/deported from the United Arab Emirates (UAE) and landed in Mumbai, where central investigators formally placed him under arrest. Following his arrest, Mistry was produced before a special CBI court in Mumbai, which remanded him to judicial custody until October 6.
Role in the Multi-Crore Fraud Scheme
Sandeep Mistry served as a director for Fancy Creations Ltd., a Hong Kong-based shell company owned by Nirav Modi. According to investigators, Mistry played an active role in a broader criminal conspiracy that led to the defrauding of PNB to the tune of over ₹6,498 crore through illegally issued Letters of Undertaking (LoUs).
He is accused of:
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Facilitating Fake Trade Transactions: Operating shadow entities to make fraudulent transactions appear like legitimate international trade operations.
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Siphoning Off Funds: Routing money through bank accounts of dummy companies situated in the UAE.
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Coercing Dummy Directors: Managing, pressuring, and controlling nominal heads of front companies created to mask the true beneficiaries of the scheme.
Allegations of Evidence Tampering and Intimidation
The central probe agency highlighted that Mistry was not just an operational cog, but actively worked to evade law enforcement once the scam unraveled in 2018. Charges against Mistry reveal that alongside Nirav Modi's brother, Nehal Modi, and other key accomplices, Mistry intimidated dummy directors and employees of Modi’s Dubai-based shell entities.
To obstruct the investigation, Mistry allegedly threatened employees, coerced them to flee to Cairo, Egypt, and destroyed mobile phones and digital storage devices to eliminate forensic evidence.
Swift Interpol Operation and Diplomatic Coordination
Mistry had been on the run since the initial crackdown on Nirav Modi’s network. A non-bailable warrant was issued against him by a special court in November 2025.
At the request of the CBI—acting as India’s National Central Bureau for Interpol—an Interpol Red Notice was issued against Mistry in July 2026. Following coordinated intelligence efforts, authorities in the UAE traced and detained Mistry. Deportation proceedings were swiftly completed through joint efforts involving the Ministry of External Affairs (MEA), the Ministry of Home Affairs (MHA), and UAE law enforcement, bringing Mistry back to India within roughly two months of the Red Notice being published.
Context: The $2 Billion PNB Scam
The PNB scam, which came to light in early 2018, remains one of the largest financial frauds in Indian banking history. Nirav Modi and his uncle Mehul Choksi are the primary accused, alleged to have bribed bank officials to issue unauthorized LoUs at PNB's Brady House branch in Mumbai.
While Nirav Modi remains in a UK prison fighting extradition to India and Mehul Choksi faces legal proceedings overseas, the return and arrest of key operatives like Sandeep Mistry strengthen the prosecution's evidentiary trail regarding the overseas web of shell companies used to launder the proceeds.
