Vijay Taneja jailed 7 years for mortgage fraud scheme
Virginia, Jan 31, 2009
NRI Vijay K. Taneja, 48, of Fairfax, Virginia was sentenced 7 years
in jail on Friday for defrauding banks of $33 million. It was one
of the largest bank fraud scams in the Virginia state's history.
He also cheated NRIs with phony home loans.
U.S. District Court Judge Claude Hilton could have been sent him
20 years in jail, but Taneja has cooperated extensively with the
government. He was ordered to pay $33 million in restitution to
the four banks he swindled in a complicated mortgage fraud scheme.Taneja
is in bankruptcy and restitution order requires Taneja to make payments
of $300 a month after he is released from prison.
Prosecutor Stephen Learned said:
- It was the largest bank fraud scheme prosecuted at the courthouse
in at least 20 years, in which four banks lost about $33 million-
Franklin bank, First Tennessee Bank, Wells Fargo bank and a J.P.
Morgan Chase and Co. subsidiary called EMC Mortgage Co.
- He defrauded the banks by creating fictitious loans and mortgages,
and then selling them to investors
- Some cases, he sold legitimate mortgages to multiple banks
Taneja before the federal judge said:
- He apologized for his actions, the embarrassment to his family
and the aggravation to his victims.
- He reportedly admitted his entertainment ventures, which included
numerous Indian musical acts in the Washington area, were funded
by an extensive mortgage fraud scheme.
On November 13, 2008, he appeared in U.S. District
Court in Arlington, Virginia, entered his plea to one count of conspiracy
to commit money laundering and pleaded guilty
According to the Court documents, Taneja operated the scheme and
conspired with the owner of TitlePro, a Fairfax title company that
went out of business in May of 2008. The prosecutors said:
- He invested money into Indian films from his mortgage operation.
His Elite Entertainment company financed the various productions.
- He has millions of dollars unaccounted and difficult to figure
out where it all went.
A lawyer appointed as the trustee in Taneja's bankruptcy
case, H. Jason Gold said:
- Dozens of individuals suffered financial losses. In some cases,
victims appear to have unwittingly signed promissory notes that
were included in the reams of paperwork that accompany mortgage
- Dozens and Dozens of people were defrauded or lost money. It's
the little people who in reality get hurt the most.
- The scheme ran from 2001 through June, when Taneja's company,
Financial Mortgage, Inc., filed for bankruptcy.
Several area residents were victimized, their credit rating has
been damaged and credit cards have been canceled because he sold
their mortgage to three different banks, all of whom wanted to be
paid. Many mortgagees were reportedly duped into signing a second
set of loan documents.
Robert Trout, Taneja's defense lawyer said:
- His client never intended to harm anyone and always intended
to pay the money back. He called Taneja's actions "a misguided
effort for bridge financing
- The scheme collapsed when "the balls could no longer be
Vijay K. Taneja:
NRI Vijay K. Taneja, a U.S. citizen, a real estate developer and
immigrated to the US at age 10 when his diplomat father was posted
here. He worked at several banks and established Fairfax, Virginia-based
Financial Mortgage, Inc., (FMI) in 1990.
Financial Mortgage, Inc., -outsource closing coordination, title
and escrow, post-closing and sub servicing vendor coordination and
delivery to Guardian Mortgage Services (GMS) in order to better
manage fixed costs.
He invested millions in Bollywood films and brought Indian entertainment
shows to the Washington area. He was very popular in the NRI community
and a flashy movie producer. He established Elite Entertainment,
The biggest celebrities from the Indian Bollywood industry have
performed in live concerts since 1993, Stars like Amitabh Bachan,
Shahrukh Khan, Hritik Roshan, Madhuri Dixit, Aishwarya Rai, Preity
Zinta, Rani Mukherjji, Arjun Rampal, Lara Dutta, Fardeen Khan, Aftab
Shivdasani, Salman Khan, Sunjay Dutt, Amer Khan, Saif Ali Khan,
Adnan Sami, Jagjit Singh, Sonu Nigham, A. R. Rahman and group and
Elite Entertainment started as a local promoter in Washington
DC Metropolitan area then later started in on the international
level of bringing the Bollywood actors/stars to UK, USA, Canada
and selling the shows to applicable local promoters. Elite has maintained
the excellent reputation with the type of talent brought overseas
and India (Bollywood stars).
A civil suit filed against Taneja alleges the fraud was motivated
in part by a desire to raise money for the production of "Aap
Kaa Surroor," which carried a budget of $16.5 million —
very large by Bollywood standards.
Two films "Humko Tumse Pyaar Hai" and
"Aap Kaa Surroor: The Moviee were produced in 2006 and 2007
by him. The Real Luv Story" — were major Bollywood releases
that featured established stars including Arjun Rampal, Bobby Deol,
Himesh Reshammiya and Malika Sherawat, said Priya Jaikumar, an associate
professor at the University of Southern California's School of Cinematic
A Bollywood producer, is already claiming the rights to the film.
In fact, he already chose the film’s location –- a U.S.
federal court just outside Washington, D.C.
The problem is Taneja is also starring in this movie –- as
He also donated large amounts to Hindu temples.
He built a palatial home, 25,000-Square-Foot white Mansion.
Tennis Court. Indoor Pool. Gold-Leaf Prayer Room in 2003. This
home was sold for $3.9 million under his bankruptcy
He filed for bankruptcy in debt of $77 million