By Annie Gowen
Sunday, June 6, 2010; W22
The night his movie opened, Vijay Taneja arrived at the small Falls Church theater in his gleaming Mercedes-Benz GL450, greeting well-wishers gathered for what was surely a first -- a local premiere of a major Bollywood film.
Nearly everyone in Northern Virginia's tightknit community of Indian immigrants knew Taneja, who had come to Arlington from New Delhi as a youth and founded a successful mortgage firm in Annandale. He'd helped many of those in attendance buy their first homes, and he'd built himself a palatial white mansion fit for a raj in a modest Fairfax subdivision. He'd also started his own local entertainment production company that brought Bollywood stars such as Shah Rukh Khan and Aishwarya Rai to tour the United States.
With seemingly deep pockets fueled by the Northern Virginia real estate boom, Taneja, now 49, had realized a longtime aspiration. He'd produced a Bollywood film, bankrolling "Aap Kaa Surroor: The Moviee -- The Real Luv Story," about a rock star framed for murder.
Taneja was a rotund man who mumbled when he talked and had no stage charisma. But friends and family were accustomed to him grabbing the spotlight, and this summer night in 2007 would be no exception. He beamed with pride as the movie played. There was no glimpse of the steep downward spiral his fortunes would take in just a few months, with lives left in ruins, the Indian community betrayed, Taneja in federal prison, and a $150 million bankruptcy case that is far from resolved.
When the film was over, guests milled around the tiny lobby nibbling on samosas. They politely congratulated the host, but everyone could see the movie -- with a wooden young star and a meandering plot -- was hardly hit material.
"It was heavy on everybody's mind: 'Hey, this is not a great movie. What is he going to do? He is going to lose his shirt,'" recalled one guest, who has a prominent job in the Indian community and did not want to be identified. "It was surprising, because we had heard so much about it. It was a letdown."
Taneja had spent at least $10 million. At the time, it seemed like a lot of money.
The palace rose on Summit Drive in a quiet Fairfax County subdivision near Centreville. First trucks arrived, clogging the narrow streets to deliver loads of concrete blocks and marble, disgorging the contents upon what would become a sweeping circular driveway.
It was 2005, and the local real estate market was in a frenzy. Property values were rising by double digits each year, and homes were snapped up after hours on the market. Teardowns were common. Even so, the sheer scope of this project -- a 21,000-square-foot house with a swimming pool, tennis court and sweeping arches evoking temple architecture -- was jaw-dropping.
"We called it the Taj Mahal," said a bemused neighbor. The community buzzed: Who was this guy?
Taneja, who declined to be interviewed for this article, is the son of an Indian diplomat and immigrated to the United States with his family while he was still a teen, according to court documents and interviews with family members. He started working in the banking industry while still in college and ultimately founded a mortgage company, Financial Mortgage, in 1990.
He and his wife, Deepti, sent their three daughters to private school and joined a large Hindu temple, Rajdhani Mandir in Chantilly, funneling as much as $50,000 in donations over the years. Taneja became the de facto head of a large, extended clan that included his elderly parents, according to Shafiq Ahmad, a Northern Virginia restaurateur and friend of Taneja's. "He was top of that family," Ahmad explained. "He had a lot of responsibilities."
Taneja also had a yearning for glamour that set him apart from the thousands of Indian immigrants who made their way to Northern Virginia during those years, drawn by high-tech jobs along the Dulles Corridor and good public school systems.
He formed his own entertainment firm, Elite Entertainment, and began producing U.S. tours for Bollywood stars. The actors, adorned in glittery costumes, would lip-synch to songs from popular films as pyrotechnics blazed. When the shows stopped at the Patriot Center in Fairfax, Taneja would seize the microphone to serve as master of ceremonies. Afterward, he threw elaborate receptions where dozens of guests could mingle with the celebrities from overseas.
"These concerts promote our culture to the generation that's born here," Taneja told a Washington Post reporter in 2002. "They should know their identity, and Indian cinema is the best way of keeping them aware of it. ... It makes me feel I'm keeping India close to the Indians overseas."
He spared no expense when it came to cosseting the Bollywood stars, providing stretch limousines, shopping allowances and funds for travel to and from India, business associates said. When sister singing sensations Karisma and Kareena Kapoor toured, Taneja made sure their dressing rooms were filled with flowers -- red roses for Karisma and yellow blooms for Kareena.
Vaughn Mordenti, a New Orleans event producer who worked often with Taneja, recalls quaffing rum and Cokes with Taneja in a limousine after a show in Houston. "We all kind of drank a little too much," he recalled. The next thing he knew, another guest in the party had commanded the limo driver to speed backward in circles around the emptying stadium parking lot. "Vijay is laughing and rolling on the floor," Mordenti recalled. "I don't know how long we did that. ... We were paying [the driver] to drive backwards, so he did."
Taneja hired McLean architect and builder Ali Gharai to build him what he hoped would be the biggest house in Fairfax.
"He wanted it to be different from other Indian clients, who are super conservative," Gharai said. "He kept adding things as time went on. 'How about a pool? How about a theater? How about a [squash] court?' ... I knew he was never going to use it. He just wanted to have it."
Taneja may have wanted to outshine his fellow immigrants, but his wife felt otherwise, Gharai said. Deepti Taneja preferred her used Honda to her husband's parade of Mercedes sedans, he said.
"It's too big," she told Gharai as he was building the house. "Why do we need it?"
Most Americans were only just waking up to the charms of the colorful musicals made in India, the largest film industry in the world. This was long before the success of the Oscar-winning "Slumdog Millionaire," but Taneja felt it was only a matter of time before the American appetite for such films would explode. He began traveling to India, looking for film projects to invest in. In 2006, Taneja organized a concert tour for a doe-eyed young musician named Himesh Reshammiya who was on the cusp of fame in India. Taneja became convinced he could make Reshammiya a star.
"He was still waiting for that day that someone would give him a break," Taneja recalled in an interview with a local Indian television station, Darshan TV, in 2007. "I said, 'Let's start it.' I believe in the guy."
The two agreed to make a movie together, and "Aap Kaa Surroor: The Moviee -- The Real Luv Story" began filming in Germany later that year.
But when it was released in 2007, critics jeered the film's flimsy plotline and the acting of its young star. It had been optimistically projected to earn box office receipts of up to $37 million but made about $3 million.
In the end, Taneja would recoup only about $1.8 million of his more than $10 million investment, according to a lawsuit he filed against Reshammiya seeking an accounting of the box office receipts in U.S. District Court in the District that was later dismissed.
"He was very disappointed," said Bharat Jotwani, a New Jersey entertainment promoter who knew Taneja well. "In Hollywood, they make movies backed by market research. In Bollywood, in Bombay, you make daydreams."
The audience at Taneja's film premiere in Falls Church included a young Harvard-trained doctor of Indian descent who had been friends with the Tanejas for years. He, his wife and their two young children spent considerable time with the family, he said, socializing at temple events and celebrating holidays and birthdays together.
When the doctor, now 37, was fresh out of medical school and facing a pile of school loans and credit card debt, he turned to Taneja for help in buying his first house. Taneja got him a $780,000 mortgage on a roomy brick Colonial in Howard County for no money down.
"He said he'd make sure I'd get the best deal because I was part of the family," recalled the doctor, who did not want to be identified for fear of the impact his involvement might have on his career. "He said, 'Don't worry.' ... It was a very carefree attitude [as if] he's done mortgages for a long time, and nothing would happen."
But something did happen. In 2007, the doctor did a routine check of his credit score and noticed something odd. Taneja had recently helped him refinance his home to get a better rate, but the credit agencies were reporting that the original loan had never been paid off.
"I asked Vijay about it, and he told me it was just some mix-up, and that I shouldn't check my credit score too often, that it would hurt my credit," the doctor said.
If Taneja was worried about the real estate market beginning to crash around him, he gave no public sign of it, boasting of plans to build a huge entertainment complex in the 'burbs called "Little India." "I'm a very optimistic type of thinker," he told Darshan TV. "Whatever goes down has to come up, and whatever goes up has to come down. I'm predicting a year or two from now we're going to have a robust real estate market once again. I've been through this cycle many times."
Meanwhile, the doctor's mailbox began filling with alarming notices from mortgage companies that he had never heard of, demanding money for payments that were 30, 60 and 90 days late. He called Taneja, mystified. Again, Taneja put him off. He would clear it all up, Taneja reassured him; he just needed some time.
Shortly thereafter, special agents in the FBI's Washington field office began to hear complaints from several large banks about Taneja's business activities, according to Adam Sidney Lee, who was in charge of the case.
The housing bubble had burst, exposing thousands of criminals who had cheated the system during the boom years. Some of the fraud was breathtaking, said Anthony Sanders, a professor of real estate finance at George Mason University who calls Taneja the "Indian Bernie Madoff," referring to the infamous Ponzi scheme operator, because he preyed on his own community.
With his debt mounting and the FBI on his tail, Taneja filed for bankruptcy, hired an attorney and agreed to sit down with investigators.
Lee said Taneja seemed weary as he recited how the scams unfolded. "He was resigned to the fact this whole thing was coming to an end."
Taneja's fraud may have begun as early as 1999, investigators said. He found several ways to get cash, including tapping lines of credit from banks and selling bogus loans that did not exist to secondary investors. He duped his own clients by sitting at the closing table and having them sign several sets of loan documents, including the original mortgage, as well as other mortgages the buyers weren't aware of, authorities said. He had the coupon books for the additional mortgages sent to his Annandale office and kept the payments current to avoid arousing suspicion. He even turned his own home into a cash cow -- writing four bogus mortgages to come up with $14.8 million, much of which went to fund the movie.
Investigators found dozens of local homeowners who had turned to Taneja for help and were left with ruined credit and thousands of dollars of legal fees.
The Howard County doctor said he and his wife fear that they may lose their home if their finances are not untangled.
"It destroyed us completely," he said. "First of all, psychologically my wife is still in dismay. They were her closest friends. It was the biggest shock of my life."
Taneja agreed to plead guilty in a money laundering scheme to stealing $33 million, but the bankruptcy trustee says the true amount could top $150 million, making it the largest solo bank fraud in the history of the Eastern District of Virginia. It could take years and millions more in legal fees before the associated bankruptcy case -- with more than $100 million in claims -- is sorted out.
"He was iconic for us because of the amount he was able to steal as an individual," Lee said. "I've never seen anything like it."
Shortly after Taneja agreed to plead guilty to one count of money laundering in federal court in Alexandria in 2008, his seven-bedroom estate was auctioned off to pay his creditors.
Deepti Taneja, who moved with her children into a more modest house nearby, did not return calls seeking comment. She did not face charges.
Scores of people trooped into the house to inspect the enormous kitchen and the living room with the hand-painted mural of the Lord Krishna and his consort on the wall. Downstairs, they took in the movie theater, the squash court and the swimming pool with the retractable roof. They climbed the wide circular staircase to ogle the prayer room with its gold-leaf walls -- designed by a Hindu priest -- and the master bedroom with a five-room closet "suite" crammed with hundreds of jeweled saris and shoes.
"It would make Imelda Marcos proud," whispered H. Jason Gold, the bankruptcy trustee.
Downstairs, bidders and curious neighbors gathered in the party room, where a disco ball threw patterns of light onto a marble floor. The auctioneer wielded the gavel, starting the bidding, and after a brief frenzy of excitement, the house sold to an Egyptian businessman for around $4 million.
Not long after the auction, Taneja appeared before U.S. District Judge Claude M. Hilton for sentencing. His court file brimmed with letters of support from friends and family, describing Taneja as a loving father and husband who had tried to help his community.
But the glittery crowd of celebrities he used to hobnob with stayed away. Now he was attended only by his grim-faced wife, another female relative and his lawyers. His midnight-blue suit hung awkwardly on his large frame.
In the months ahead, forensic investigators would devote hundreds of hours to unraveling Taneja's complicated business ventures, tracing $700 million that flowed through his various companies over the years. The bankruptcy trustee would sell three mansions and a huge beach house to recoup around $20 million for more than 300 creditors in the case, a fraction of the $150 million believed owed.
And several of Taneja's associates and relatives are bracing themselves for accusations that they also had benefited from the fraud, making them the likely targets of a new round of civil lawsuits by the trustee this summer.
Before Hilton sentenced the man responsible for all the turmoil to seven years in prison -- which he is serving a minimum security prison in Loretto, Pa. -- the judge asked Taneja if he had anything to say about the damage he'd done.
Hanging his head and speaking in his quiet, mumbling way, Taneja said he was "very sorry about my conduct and the embarrassment of my family and the aggravation to all of the victims. Fully accept my responsibility. I'm really, really sorry."
Staff researcher Meg Smith contributed to this report.
Annie Gowen covers wealth, class and income for The Washington Post. She can be reached at firstname.lastname@example.org.