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Flashy Taneja caught in
multi-million mortgage scam
WSN Network
 FAIRFAX
COUNTY: A flashy movie producer with well known links with Bollywood
industry and a known ability to bring major musical and
entertainment acts to the United States has now courted shame when
he admitted to extensive mortgage frauds. Much of his business was
funded with money earned through these frauds and sleuths are saying
they still have to track down millions of dollars.
He now faces up
to 20 years in prison. Sentencing is scheduled for January 30.
Vijay K Taneja,
the 47-yr-old
Fairfax County
businessman, had all it takes to be a celebrity; and he was
definitely one. There was no dearth of people in the Diaspora who
virtually envied the man with a slight paunch, and many often talked
about his investments in Bollywood films, a sort of enigma as well
as a major attraction for Indians abroad.
Taneja's
admissions came in a federal court, the U.S. District Court of Judge
Claude M. Hilton in
Alexandria. His
fraudulent activities cost banks at least $33 million. Many Diaspora
Indians are shocked by the sheer scale of the scam which was
characterized by The Washington Post and a few others as the
"largest mortgage fraud case in
Virginia
in almost 20 years and among the largest nationally."
Prosecutors said
he created bogus mortgage loans, sold legitimate loans to more than
one buyer and pocketed the proceeds of refinancing.
The Post quoted
Adam Lee, supervisory special agent for financial crimes in the
FBI's
Washington field office, which operates one of 42 new bureau task
forces nationwide focusing on escalating mortgage fraud as saying:
"That's an incredible amount of loss."
Taneja ran Elite
Entertainment, his firm through which he invested millions of his
mortgage proceeds in Indian films and theatrical productions. The
web that Taneja weaved is still being untangled, said the sleuths,
and court was requested for his electronic monitoring. The judge
ordered him released on a personal recognizance bond.
A report said
the $33 million loss was borne by four financial institutions --
First Tennessee Bank, Franklin Bank, Wells Fargo Bank and EMC
Mortgage Corp. but many area residents were victimized as well.
Describing the
modus operandi, one report said Taneja prepared some legitimate
mortgages, mostly for members of the Indian community, but would
dupe people into signing dual sets of loan documents. He would then
create a fictitious mortgage based on the second set of documents
and sell the phony loan to an investor, which would leave the
victims with mortgages they didn't know they had.
Apart from this,
Taneja's main firm, Financial Mortgage Inc., also did refinancings
and defrauded banks by not paying off the first mortgages, as per
the court documents quoted by leading newspapers. "For example, a
customer would borrow $500,000, intending to receive $100,000 as
cash and use $400,000 to pay off his first mortgage. Taneja would
give the customer the $100,000 and pocket the $400,000. The bank
that held the first mortgage wouldn't notice because it didn't know
there had been a refinancing," one report said.
Sleuths said
banks were so eager to lend money in view of the soaring housing
market that Taneja escaped detection throughout.
Interestingly,
as the housing loan crisis increased, so did Taneja's handiwork. In
his other avatar as a real estate developer, he went in for more
fake or phony mortgages as housing prices fell.
Now, at least
four of his companies are known to have filed for bankruptcy
protection.
Northern
Virginia has witnessed a high rate of foreclosures.
17 November
2008
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