Diamond District Heist Trial Begins

By Shayna Jacobs on February 7, 2011 1:46pm | Updated on February 7, 2011 7:11pm

Atul Shah, left, with lawyer Benjamin Brafman. His business partner, Mahaveer Kankariya, is at the right with his attorney Michael Bachner.
Atul Shah, left, with lawyer Benjamin Brafman. His business partner, Mahaveer Kankariya, is at the right with his attorney Michael Bachner.
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DNAinfo/John Marshall Mantel

By Shayna Jacobs

DNAinfo Reporter/Producer

MANHATTAN SUPREME COURT — A pair of financially "desperate" Diamond District jewelry store owners staged a colorful heist using costumed, phony armed robbers in an attempt to cash in on $7 million in insurance money, prosecutors said on the first day of their trial Monday.

Business partners Atul Shah and Mahaveer Kankariya allegedly hired two men to dress up in traditional orthodox Hasidic Jewish clothing and pretend to be gun-toting robbers in an elaborate ruse to fool their insurance company and police on Dec. 31, 2008, prosecutors said.

"They were going broke. To deal with their financial problems ... the defendants tried a desperate gamble," Assistant District Attorney Eugene Hurley said Monday.

Prosecutors say the conspirators blew their cover because of a major misstep: in preparation for the staged heist, the men allegedly poured industrial strength drain cleaner onto a digital video recording device that took electronic feed from security cameras inside Dialite Imports on West 46th Street.

But little did they know that the chemical did not actually damage the recording, and digital footage recovered by investigators allegedly revealed the shopowners filling the safe with empty jewelry boxes prior to the heist, along with other incriminating scenes, prosecutors said.

The point of destroying the DVR was "so no one would see how fake the robbery seemed," Hurley said.

"Unfortunately for the defendants, the drain cleaner had to seep down into the motherboard of the DVR in order to [destroy] it."

"No real robbers would ever act like these guys," the ADA added.

The plastic, yet highly realistic, toy weapons were entered into evidence at trial Monday afternoon despite several defense objections.

The guns were found hidden above a ceiling tile just last year by a maintenance worker painting the room 511 office the defendants occupied, the worker testified. 

During the brazen New Year's Eve daytime heist, the alleged phony robbers pointed fake handguns and tied up Shah and another employee. That employee was not charged, prosecutors said.

One of the phony guns prosecutors say was used in a staged Diamond District heist in 2008.
One of the phony guns prosecutors say was used in a staged Diamond District heist in 2008.
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Manhattan District Attorney's Office

Another witness, NYPD Detective Kevin Buehler, described how Shah said he'd been thrown to the ground and intimidated by the alleged gunmen who had threatened to blow him away.

Prosecutors would later say the account was all was part of a concocted story meant to distract police from what really happened.

Shah and Kankariya have been charged with insurance fraud, attempted grand larceny and falsifying business records. They allegedly took out a massive liability plan just prior to the alleged fake robbery, but have not been able to collect any insurance payouts since the incident.

But lawyers for Shah and Kankariya said the robbery was real, and blamed the disconnect on hours of intense interrogations by law enforcement and insurance representatives.

Benjamin Brafman, Shah's lawyer, said the DA's theory was the work of one detective who had twisted the evidence to fit the story.

"This is a theory without a case, your honor.  This is a theory without a witness," Brafman told Manhattan Supreme Court Judge Thomas Farber on Monday.

Michael Bachner, a lawyer for Kankariya, said his client was not even at the jewelry store when the robbery occurred. He blamed the insurance company for the prosecution of his client, claiming they misled the DA in order to avoid paying out the millions.

"This insurance company had seven million reasons to ensure this claim never got paid," Bachner said.

Farber will decide the fate of the two defendants, after they opted out of a jury trial to rely on the decision of the judge.

A pair of robbers used convincing, yet fake, plastic guns to stage a heist at a Diamond District store, prosecutors said.
A pair of robbers used convincing, yet fake, plastic guns to stage a heist at a Diamond District store, prosecutors said.
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Manhattan District Attorney's Office

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