In the following press release Dana Boente, Acting United States Attorney for the Eastern District of Virginia announced that Vijay K. Taneja, age 47, of Fairfax, Virginia, pleaded guilty to one count of conspiracy to commit money laundering in connection with a mortgage fraud scheme involving his company, Financial Mortgage, Inc., (“FMI”), which originated and sold mortgages on residential properties in the Washington, D.C., metropolitan area. Joseph Persichini, Jr., Assistant Director in Charge of the FBI Washington Field Office, and C. Andre Martin, Special Agent in Charge of the Washington Field Office of the Internal Revenue Service, Criminal Investigation Division, also made the announcement today following the plea before Judge Claude M. Hilton. Sentencing is set for January 30, 2009. The maximum potential penalty for conspiracy to commit money laundering is 20 years incarceration and a fine of $500,000.

According to court documents in support of the guilty plea, before FMI sold its mortgages to financial institutions as long term investors, FMI utilized another group of financial institutions (referred to as “warehouse lenders”) to temporarily fund the mortgages before they were sold. Beginning in 2001, FMI began defrauding a series of warehouse lenders and eventually two other financial institutions serving as long term investors, causing an accumulated loss of at least $33 million to four financial institutions by the time FMI filed for bankruptcy in June 2008. The financial institutions were First Tennessee Bank, Franklin Bank, Wells Fargo Bank, and EMC Mortgage Corporation, a wholly owned subsidiary of JP Morgan Chase & Co. Taneja accomplished the scheme by (i) creating fictitious loans with bogus loan closings, (ii) selling the same legitimate loan to multiple investors, and (iii) pocketing the proceeds generated from refinancing loans, when the bulk of those proceeds were intended to payoff prior mortgages on the same properties. Court documents state that for at least part of the scheme Taneja conspired with the owner of TitlePro, a Fairfax title company. The company went out of business in May of 2008.

The investigation involving Financial Mortgage, Inc., was conducted by Special Agents of the FBI and the Internal Revenue Service. The prosecution of the case is being handled by Assistant United States Attorney Stephen Learned.

Update on Friday, January 30, 2009 at 1:25PM by The Editor - Ian Shuter - ACFE, DMS

In a press release Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia announced that Vijay K. Taneja, age 48, of Fairfax, Va., was sentenced today to 84 months in prison, followed by three years of supervised release, and ordered to pay $33 million in restitution to four financial institutions: Franklin Bank, First Tennessee Bank, Wells Fargo Bank, and EMC Mortgage Co., a wholly owned subsidiary of J.P. Morgan Chase & Co. Franklin Bank is currently under FDIC receivership.

Vijay K. Taneja - Courtesy Washington Post

An Associated Press story on Taneja desribes him as a Bollywood Promoter and reports thay

“Two films he produced in 2006 and 2007 — “Humko Tumse Pyaar Hai” and “Aap Kaa Surroor: The Moviee - 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 Arts.

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.”