Va. Bollywood Investor Admits $33 Million Fraud
Friday, November 14, 2008
He was an icon in the local Indian community, a flashy movie producer who invested millions in Bollywood films and brought Indian musical acts to the Washington area.
Vijay K. Taneja had an aura about him, a celebrity image that made people trust him, according to people who know the Fairfax County businessman. Problem was, Taneja admitted in federal court yesterday, his entertainment ventures were financed with money obtained through an extensive mortgage fraud scheme.
Taneja pleaded guilty in U.S. District Court in Alexandria to a fraud enterprise that cost banks at least $33 million, 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 refinancings.
"That's an incredible amount of loss," said 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.
Taneja, 47, of Fairfax City entered his plea to one count of conspiracy to commit money laundering in a soft, hesitant voice. U.S. District Judge Claude M. Hilton asked him no specific questions about the case, and he declined to comment afterward. His attorney, Robert P. Trout, declined to comment as well. Taneja faces up to 20 years in prison when he is sentenced Jan. 30.
Prosecutors told the judge that Taneja invested millions of his mortgage proceeds in Indian films and theatrical productions through one of his companies, Elite Entertainment, and that they are still trying to untangle the financial web. "He has millions of dollars unaccounted for," Assistant U.S. Attorney Stephen Learned said as he asked Hilton to order Taneja to be electronically monitored to ensure that he doesn't flee before sentencing. "There's so much money, and it's difficult to figure out where it all went."
Trout emphasized that Taneja, a U.S. citizen, has cooperated extensively with the government, and Hilton ordered him released on a personal recognizance bond.
Members of the Washington region's tightly knit Indian community said Taneja was revered by many because of his show business connections and insistence on doing business mainly with others in the community.
He brought renowned Indian acts to the United States and also invested in the entertainment industry in India.
"He knew people in the film and music industry, and he produced these shows," said Anuj Sud, a Maryland lawyer who said several of his relatives were victimized by Taneja. "People see this guy out there involved in Bollywood and the attraction is, 'Hey, this guy is popular.' "
David Lamb, a Washington lawyer who represents several of Taneja's victims, said that "everyone looked up to him. He had all this big flashy money, and they thought he was a star. He could get them to do things for him."
Although the $33 million loss was borne by four financial institutions -- First Tennessee Bank, Franklin Bank, Wells Fargo Bank and EMC Mortgage Corp. -- prosecutors said numerous area residents were victimized as well. They 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.