A federal judge in New York dismissed criminal fraud charges against Indian billionaire Gautam Adani and several co-defendants on Monday following a request by the Justice Department. U.S. District Judge Nicholas G. Garaufis granted the dismissal for Adani but refused to dismiss two counts against five other co-defendants, citing an insufficient explanation from government officials. The ruling included specific criticism of the Justice Department's handling of the matter and its rationale for dropping the case.
The case, which involved allegations of foreign bribery, was initiated during the administration of former President Joe Biden. The Justice Department and the Securities and Exchange Commission (SEC) later reviewed the pending charges under orders from President Trump. In May, the Justice Department moved to dismiss the indictment after meetings between government officials and Adani's legal team from the firm Sullivan & Cromwell. During those meetings, defense counsel reportedly argued the case was politically motivated and noted Adani's willingness to invest $10 billion in the American economy.
In a 47-page ruling, Judge Garaufis focused his criticism on Trent McCotter, the principal associate deputy attorney general. The judge stated that McCotter appeared to have acted without input from the FBI and SEC agents who investigated the case or the career prosecutors who originally brought the charges. Two career prosecutors withdrew from the case after the motion to dismiss was filed. McCotter had argued that the case was a "name-and-shame exercise" by the previous administration, an assertion the judge described as "unbecoming" and lacking evidence.
Judge Garaufis noted that while he accepted some arguments regarding generic language in financial documents, he was unpersuaded by claims that India was better suited to manage the matter or that the case would cause "diplomatic strife." The judge emphasized that under Federal Rule of Criminal Procedure 48(a), the court maintains a role in scrutinizing the government's decision to dismiss charges once a grand jury has returned an indictment. Adani previously told the court that no quid pro quo arrangement existed regarding the dismissal.
The scale of the case involves an alleged bribery scheme and a potential $10 billion investment in the U.S. economy that defense counsel suggested could follow a dismissal. While $10 billion represents a significant sum for national economic activity, the source does not detail how these funds would be distributed or which specific sectors would see the investment. The ruling sets a procedural precedent by affirming the court's authority to review and reject Justice Department motions to dismiss if the court finds the provided reasoning inadequate or the process "highly unusual."
What happens next depends on a deadline set by the court. Judge Garaufis ordered the Justice Department to provide its reasons for seeking to dismiss the remaining counts against the five co-defendants by Aug. 31. Additionally, the attorneys for those five individuals must inform the court whether their clients consent to the dismissal. The Justice Department spokesperson declined to comment beyond the filings already submitted to the court, and Adani’s lawyers have been reached for comment. Admission of new evidence or further arguments regarding the remaining counts are expected by the end of August.