Nirav Modi, Associates Pressed on Bankruptcy Court Fraud Claims

Nirav Modi and associates accused of helping the billionaire jeweler orchestrate the largest bank fraud in India’s history could be forced to defend civil racketeering claims related to their stewardship of Firestar Diamond Inc. and Modi’s other bankrupt U.S. companies.

Judge Sean Lane of the U.S. Bankruptcy Court for the Southern District of New York wrestled Thursday with questions over whether the nearly $2 billion alleged fraud on Punjab National Bank—an India government bank—created triable fraud claims for Firestar’s Chapter 11 estate against Modi and former executives.

Lane, who rarely hears claims brought under the Racketeer Influence and Corrupt Organizations ...