In JuLY this year, Paul Alfonso and his girlfriend drove to Vancouver’s Stanley Park after dinner at Chang’An, a Chinese fine-dining restaurant known for its Peking duck.

It was a quiet and warm night, one that invited a walk outside. Alfonso, 36, pulled over by the Brockton Point Lighthouse, while he mustered the courage to ask a question that would change both their lives – but not in the way he expected.

“I was so nervous. After chatting for about 10 minutes, I took the ring out and proposed to her … She was in shock,” he recalls. But the answer was “yes”.

The ring had been bought from Nirav Modi, a famous diamond jewellery designer whose pieces have been used by an array of Hollywood stars, including Kate Winslet and Dakota Johnson – and the man who, unbeknownst to Alfonso, was at the centre of the largest fraud in Indian banking history.

Alfonso, a Canadian national, is the chief executive of a payment processing company who splits his time between Vancouver and California. He met Modi at the centennial celebrations for the iconic Beverly Hills Hotel in 2012. A few months later they ran into each other at an event in Malibu, then dined at the Mandarin Oriental in New York the following week.

“He told me his plans about opening different Nirav Modi boutiques all around the world,” Alfonso says. “I am about 10 years younger, so he pretty much gave me a pep talk, kind of an older brother figure … He told me how he worked his way up and so on.”

Modi was born into a diamond-trading family, but had gone on to carve a glittering career for himself. He founded Firestar Diamond in 1999, first dealing in loose diamonds and later manufacturing jewellery for retailers around the world. In 2010, he started trading under his eponymous brand, opening shops in New York, London, Hong Kong and Macau.

“The few times I met him he seemed a very well-respected person ... We ran into people and they all knew him by name. In a way, I admired him and I looked up to him,” Alfonso says.

Not for a second did he think the man with whom he was sharing meals and details of his private life would go on to be suspected of a US$2 billion fraud at India’s state-run Punjab National Bank. Nor could Alfonso imagine the implications the friendship would have on his own life.

“He was very upbeat, very friendly, I did not get any bad vibes from him. He seemed a very genuine and down to earth person,” he says. “I felt that I had a good connection with him.”


The two went without talking for a couple of years, until this April, when Alfonso emailed Modi with a momentous request: “I’m in the market for an engagement ring. I’m going to propose to my girlfriend and I want something special.”

What Alfonso did not know was that the diamantaire was already a wanted man. In January, the Punjab National Bank (PNB)filed an initial criminal complaint accusing Modi and his uncle Mehul Choksi of defrauding it.

The case against Modi – who is believed to have left India that same month – generated a flurry of coverage across India’s news outlets, but not so much internationally. Meanwhile, he was still opening up shops, including in Macau and Kuala Lumpur.

By April, Indian authorities, believing that the jeweller was in Hong Kong, submitted a request to the city’s Department of Justice for his provisional arrest.

In his email that month, Alfonso explained that he wanted to design his own ring. “My budget is in the US$100,000 mark. Do you think you can do something for me?”

Modi responded on the same day: “I’m honoured to help you create your dream engagement ring ... Paul, I have the perfect diamond for you.”

He offered Alfonso a 3.2-carat round brilliant diamond cut, D colour, VVS1 – a high quality grade and colourless stone. “I can give it to you for wholesale at US$120,000. This is such a beautiful diamond … you can’t go wrong with this one.”

Alfonso agreed and explained he wanted to have the ring as soon as possible. Modi gave him a two-week timeline and said his master jeweller would work on the ring in Hong Kong, where the diamond was located. “My assistant Ari will be contacting you shortly,” Modi wrote. “Thank you for thinking of me when you’re making one of the most meaningful purchases in any man’s life.”

Everything was going to plan until Alfonso’s girlfriend expressed an interest in a different ring design after spotting it in a magazine, prompting him to order a second ring. “I wanted it to be absolutely perfect, so I contacted Nirav,” he says. “I thought that, later on, if we had a 10-year anniversary, I can give the [original] ring to her as a present.”

The jeweller offered him another 2.5 carat oval diamond for US$80,000. Alfonso wired the money for both rings to a Hong Kong account. Upon their completion, the rings were hand-delivered to Vancouver by Ari on June 17, along with a promise that Alfonso would soon receive an invoice and the authenticity certificates.


The same day, Alfonso emailed Modi to say the diamonds were “absolutely gorgeous” and to ask for the certificates to be couriered to him. Modi responded promptly: “You’re very welcome and I’m glad you like them. I’ll have the certificates sent to your residence via DHL.”

Meanwhile, Alfonso proposed to his girlfriend; caught up with the emotion he gave her not one but both rings. “I gave her one ring first. And then, I don’t know why, I just could not hold it … I was trying to tell her how serious I was and how genuinely I really wanted to marry her,” he says.

Alfonso and his fiancée were over the moon, but the authenticity certificates had not arrived. “I thought he was busy and forgot … But then another week would go by and nothing was coming. I started feeling a little bit uncomfortable,” he says.

Several emails followed, with Modi providing more assurances that the certificates were on their way.

“I had to get both rings insured because they were pretty high value. For that, we needed to have a letter from someone certified to appraise the rings. My fiancée went to get them appraised,” Alfonso says.

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That was when the shock came, in early August. The beautiful stones were not real.

“When she told me, I was like ‘That’s impossible. I spent US$200,000 on those rings. There’s no way they are fake. It’s Nirav we are talking about’,” Alfonso said, livid with disbelief.

Another shock came when he started reading the latest news about Modi, whom Forbes had ranked as India’s 84th richest person with a net worth of US$1.74 billion last year.

“I realised: ‘Oh my God, this guy is wanted for defrauding a bank in India, two of his companies in New York had filed for bankruptcy … That’s when I knew: he got me.”

Alfonso kept following the news incredulously. “I am usually very careful when I am dealing with a big transaction like this, but again, this is Nirav. I would not imagine him trying to take a few hundred thousand from me when a guy is worth millions of dollars.”

His dreams soon began to crumble. “This affected the relationship between my ex-fiancée and her family. They think that I went out and bought these fake rings and proposed to her,” Alfonso says.

“We broke up literally after one or two days ... It was just too much for both of us to handle. It does not make sense to her, because she says: ‘You are a pretty smart guy, how did you let someone scam you out of US$200,000 without making sure the transaction was legitimate?’”


Alfonso says he has suffered from depression since he realised the two diamonds were fake. “After that, I just could not function,” he says. “I realised that even if I go after this guy, there are so many creditors before me who are trying to get compensated.”

This also took a toll on his business, as most of his energy has been focused on seeking justice. “I have dedicated the last few weeks of my life, every single day, trying to figure out how to find this guy and be compensated.”

Alfonso expressed his anger towards Modi in an August 13 email, but he never heard back. “Do you have any idea what kind of pain you’ve cost me and my now ex-fiancée? … You’ve completely ruined such a wonderful occasion for me and her. You’ve ruined my life,” he wrote.

Alonso says he contacted the police in New York and in Vancouver. Meanwhile, he filed an unlimited civil lawsuit against Modi with the Superior Court of California, suing him for US$4.2 million dollars. That includes US$200,000 for the value of the rings, US$1 million for punitive damages and another US$3 million dollars for emotional distress, pain and suffering. A case management conference has been scheduled for January 11, 2019.

“The lawsuit I filed in California listed two of his companies in the US. They both filed for bankruptcy. I am hoping I will be able to see something from those companies,” Alfonso says.

In June, the Financial Times cited officials in Britain and India as saying Modi – who has denied wrongdoing in the case – had sought asylum in Britain, alleging political persecution. A month later, Interpol issued a notice for his arrest. Indian authorities have since sent Britain an extradition request for Modi, and seized his as sets in four countries, including the US and Britain.

This Week in Asia tried to contact Modi and his assistant Ari, but calls and emails went unanswered.

Alfonso, meanwhile, is aware his case may take years to be resolved.

“I want people to know that this man can’t be trusted … I thought he was my friend. I can’t believe he did that to me,” he says. “He doesn’t just steal from banks. He will steal from you too because his fortune has gone up in smoke.”