Editors

The Nirav Modi Case: What Else We Learned This Week

EditorsMar 02, 2018

The Nirav Modi Case: What Else We Learned This Week

An affidavit filed Thursday maps out the connection between the Indian diamantaire and his U.S. companies that filed for bankruptcy.

2017_gavel-stock.jpg

A lot of questions came to mind Tuesday as I was working on the story about the bankruptcy filing of the three U.S. companies—Firestar Diamond Inc., Fantasy Inc. and A. Jaffe—ultimately owned by Nirav Modi, the Indian diamantaire at the center of a $1.8 billion bank fraud scandal.

How are they all connected to Modi? Is it accurate to say that he owns them?

Why a Chapter 11 filing in a case like this, beyond the obvious?

And what will happen to these three companies going forward?

Late Thursday afternoon, an affidavit was filed that helped to answer at least some of my questions.

The Modi Connection
Press reports about the Chapter 11 filings mainly used the word “owned” to link Modi and these U.S. operations, which isn’t inaccurate. But his ownership of the company is neither direct nor simple.

Ian Winters, the New York attorney handling the companies’ Chapter 11 case, said Tuesday that Modi was not an officer or a director in any of the three U.S. companies and was not involved in their day-to-day operation.

A. Jaffe, too, was quick to point out that its team here had no knowledge of what was happening in India. The second sentence of its statement on the bankruptcy filing read: “A. Jaffe and its core team here in the United States want to assure partners and customers that A. Jaffe is not in any way involved with any of the alleged conduct that is the subject of the accusations.”

According to the affidavit, Firestar Diamond Inc. was formed as a Delaware corporation in February 2004 as Jewelry Solutions International Inc. The name of the company changed three times over the next seven years, to Next Diamond Inc. (2005), Firestone Inc. (2007) and, finally in 2011, to the name it has now, Firestar Diamond Inc.

Fantasy Inc. was incorporated in Delaware in 2012 and is a wholly owned subsidiary of Firestar Diamond Inc.

A. Jaffe Inc., which traces its roots back to 1892, incorporated in New York in July 1975 under the name Sandberg & Sikorski Diamond Corp. In 1995, the company dropped the “Diamond” from its name before changing it again in 2011 to A. Jaffe Inc.

Firestar Diamond Inc. is a wholly owned subsidiary of Firestar Group Inc., a Delaware corporation. Firestar Group is owned by another Delaware corporation, Synergies Corp.

Synergies is a wholly owned subsidiary of a Hong

Kong company called Firestar Holdings Ltd., which is a wholly owned subsidiary of an Indian company called Firestar International Ltd., of which Nirav Modi is “directly or indirectly” the majority shareholder, the affidavit states.  

A. Jaffe Inc., meanwhile, is 95 percent owned by Synergies, with founder Sam Sandberg holding the remaining 5 percent.

Do you need an Advil now? If so, feel free to grab a couple. I’ll wait.

Now, remember that conversation I reported on last week with the banker, in which he talked about how bankers are put off by the industry’s lack of transparency? This “spaghetti junction” of organization, as another industry insider described it, is exactly what he was talking about. 

Why Chapter 11?
There’s a section of the affidavit titled “Events Leading to the Chapter 11 filing” that, after running down the allegations against Modi, points to the same factor that Winters mentioned to me on the phone Tuesday when I was interviewing him about the bankruptcy filing.

Modi’s factories in India that made most of the jewelry for Firestar Diamond, Fantasy Inc. and A. Jaffe were seized and shut down, which, the affidavit points out, resulted in thousands of people losing their jobs. The Indian entities also provided Firestar/Fantasy and A. Jaffe with back office and support functions.

That’s a sad reality of situations like this—that everyday working people lose their livelihoods because of the ego and greed (or, in this case still, alleged greed) of big corporations or individuals—and it shouldn’t be forgotten.

It’s also worth noting that job losses are what the principals of Firestar/Fantasy and A. Jaffe are trying to prevent from happening in the United States.  

Chapter 11 gives these three companies a chance to reorganize either with new owners or investors, provided they can find some who are willing and also can navigate the legalities of selling companies that are connected to an alleged, international white-collar crime.

Firestar Diamond International and Fantasy Inc. do about $90 million in sales a year, according to the affidavit, selling to big companies like Signet-owned Zales, Kay Jewelers, and Jared the Galleria of Jewelry, as well as Costco, Sam’s Club, Walmart and J.C. Penney. The company also holds the IP for the Endless Diamond brand.

A. Jaffe’s market is more upscale—it sells to “hundreds of the finest independent jewelry stores in America,” the affidavit states—and the company has been growing steadily over the past three years, with fiscal 2018 sales projected to reach $23 million.

Both businesses are looking for a buyer, and the affidavit told me the same thing that Winters did on the phone earlier this week: that “early expressions of interests” have been “strong.”

What About the Nirav Modi Stores?
This is not something that was included in the affidavit and is not connected to any of the three companies above, but I do want to talk a little bit about what we know about Modi’s stores in the U.S.

As I noted in my blog post last week, Modi has (or seemingly had) three eponymous stores here.

The first was on Madison Avenue in New York, with stores in the Wynn Las Vegas and the Ala Moana Center outdoor mall in Honolulu opening this past November.

On Thursday, the only phone number I could find online was for the New York store. When I called it, I got an automated message from Time Warner.

The Hawaii store is still listed on the Ala Moana website, but when I called during business hours Thursday, neither a machine nor a human answered.

At the Wynn Las Vegas, I didn’t see Nirav Modi listed among the shops on the hotel’s website. I reached out to the hotel’s public relations department Thursday but didn’t hear back, though it is fair to note that they might have their hands full relating to the public on other matters.
Michelle Graffis the editor-in-chief at National Jeweler, directing the publication’s coverage both online and in print.

The Latest

Stock image of shipping containers
Policies & IssuesJul 28, 2025
U.S.-EU Come to Agreement on Tariffs

Announced Sunday, the deal will set the tax on goods imported into the United States from the European Union at 15 percent.

Nanis Ipanema Collection Campaign
CollectionsJul 28, 2025
Nanis Brings a New Palette to ‘Ipanema’

A new edition of the Italian brand’s “Ipanema” collection has debuted with gemstones that evoke Brazil’s breathtaking views.

Kevin O’ Leary and George Mayer of The 1916 Company
MajorsJul 28, 2025
The 1916 Company Partners with ‘Shark Tank’ Star’s Watch Insurance Platform

The retailer will refer its customers to WonderCare, founded by venture capitalist and watch collector Kevin O’Leary.

rio-article photo-diamond.jpg
Brought to you by
Taking the Moment Head On: How Rio Grande Champions the Present & Future of Fine Jewelry

As a leading global jewelry supplier, Rio Grande is rapidly expanding and developing new solutions to meet the needs of jewelers worldwide.

Sissy’s new Little Rock store
IndependentsJul 28, 2025
Sissy’s Log Cabin to Open Flagship in Arkansas

The jeweler’s largest store yet is set to open in Little Rock next fall.

Weekly QuizJul 25, 2025
This Week’s Quiz
Test your jewelry news knowledge by answering these questions.
Take the Quiz
Jemma Wynne Forme Toggle Necklace
CollectionsJul 25, 2025
Piece of the Week: Jemma Wynne’s ‘Forme’ Necklace

Anne Hathaway was seen wearing the toggle necklace three times while filming scenes for “The Devil Wears Prada 2.”

September Hong Kong jewelry show
Events & AwardsJul 25, 2025
Pre-Registration Open for September Hong Kong Show

Jewellery & Gem World Hong Kong is scheduled for Sept. 15 to 21, and buyer pre-registration will be available until Sept. 7.

an instructor and a student in a bench jewelry classroom
Brought to you by
Investing in the Next Generation of Bench Jewelers

The Seymour & Evelyn Holtzman Bench Scholarship from Jewelers of America returns for a second year.

Bulgari Celestial Mosaic spinel necklace
FinancialsJul 25, 2025
LVMH Sales Slip in H1 Amid ‘Prevailing Uncertainties’

Renovations at Tiffany & Co. stores ate into profits in the company’s watch and jewelry division.

Mark and Candy Udell
Events & AwardsJul 24, 2025
2 Retailers to Receive 2026 Gem Award for Lifetime Achievement

Mark and Candy Udell of London Jewelers will receive the honor at the 24th annual Gem Awards next March.

De Beers marine mining vessel the SS Nujoma
SourcingJul 24, 2025
De Beers Sees Diamond Production Sink 36% in Q2

While struggles continue at the mining and trading end of the pipeline, consumer demand for diamond jewelry is holding steady.

Francesca Villa Fantasia Collection The Crab Pendant, The Mermaid Pendant, Keep Dancing Seahorse Pendant, Keep Dancing Ladybug Pendant, Secret Dreams Pendant, The Puffer Fish Takes Flight Pendant
CollectionsJul 24, 2025
Francesca Villa Adds Dimension to Her Intaglio Characters

The “Fantasia” jewelry collection turns the intaglio animals from her “Close Encounters” collection into 3D characters.

Breitling’s special Eagles Super Bowl watch on gold bracelet
WatchesJul 24, 2025
Breitling Drops Super Bowl Watch Honoring the Philadelphia Eagles

The special Classic Avi Chronograph 42 with an Eagles-green dial is limited to 59 pieces, a nod to the Super Bowl Philadelphia just won.

Stock image of crime scene tape
CrimeJul 23, 2025
JSA Warns of Violent String of Smash-and-Grabs in California

JSA has received reports of mobs swarming jewelry stores, driving cars into the storefront or smashing through the windows.

Silvia Furmanovich Kasmir Collection Carnelian Bracelet and Sketch
CollectionsJul 23, 2025
Silvia Furmanovich’s ‘Kashmir’ Collection Is a Tribute to Northern India

The “Kashmir” collection features centuries-old craft techniques made in collaboration with the region’s master papier-mâché artisans.

Bench jeweler holding a bracelet and a tool
IndependentsJul 23, 2025
Montreal’s Ecksand Eyes Move to SoHo

Creative Director Erica Bianchini shared why the jeweler is looking to expand into the U.S. and how it’s putting Canadian craftsmanship on the map.

LAFD Fire Station 44 and Fire Station 16
IndependentsJul 23, 2025
IJO Raises Nearly $37K for LA Fire Relief

Two Los Angeles Fire Department stations plan to use the donations to upgrade their equipment and tools.

A Vanitas by Hannah Martin and Guy Berryman Sothebys
CollectionsJul 22, 2025
Jewelry With a Rock ‘n’ Roll Aesthetic Heads to Sotheby’s London

Next week, the auction house will kick off a selling exhibition of jewelry by British artist Hannah Martin and Coldplay’s Guy Berryman.

Cover of the book “Flawless: Inside the Largest Diamond Heist in History”
SourcingJul 22, 2025
Antwerp Diamond Heist Documentary Coming to Netflix

“Stolen: Heist of the Century” is based on “Flawless,” the book about the middle-of-the-night theft, and will debut on Netflix in August.

Emmanuel Raheb
ColumnistsJul 22, 2025
The Gifting Gap: How to Market Jewelry Beyond the Holidays

Emmanuel Raheb shares the top five gifting moments outside of major holidays that jewelers should build marketing campaigns around.

NY Now
Events & AwardsJul 22, 2025
NY Now’s Summer Market Returns in August

The wholesale trade show’s Luxury Lifestyle section will showcase established and emerging jewelry designers.

Jeweler setting a diamond into a ring
MajorsJul 21, 2025
Rio Grande Expands Personalization Offerings

As demand for custom jewelry grows, the company is expanding its services to support retailers.

National Associate of Jewelry Appraisers Logo
Events & AwardsJul 21, 2025
NAJA’s 2025 ‘Ace It’ Conference To Go Virtual

The mid-year conference for jewelry and watch appraisers is slated for Aug. 9 to 10 on Zoom.

Jacquie Aiche graduated turquoise beaded necklace
TrendsJul 21, 2025
Amanda’s Style File: Graduated With Honors

Graduated stones make for elevated tennis-style pieces and dramatic statement necklaces.

24th Gem Awards Show Logo
Events & AwardsJul 21, 2025
Gem Awards Now Accepting Nominations for 2026

Nominations in the categories of Jewelry Design, Media Excellence, and Retail Innovation will be accepted through July 30.

Lewis Heyman
MajorsJul 18, 2025
Lewis Heyman on Sourcing Gemstones, Post-Retirement Plans

He retired last month after 28 years traveling the world to source the very best gemstones for his family’s jewelry business, Oscar Heyman.

CCWW Designs Multiple Shell Charm Necklace
TrendsJul 18, 2025
Piece of the Week: CCWW Designs’ Shell Charm Necklace

The charm necklace features six nautical charms of shells and coral that founder Christina Puchi collected on Florida’s beaches.

×

This site uses cookies to give you the best online experience. By continuing to use & browse this site, we assume you agree to our Privacy Policy