A WELL-known Bollywood promoter and film producer from northern Virginia was sentenced to seven years in prison on Friday (January 30) for one of the largest bank fraud scams in the state’s history.
Vijay K Taneja, 48, of Fairfax, Virginia, was also ordered to pay $33m (£29m) in restitution to the four banks he swindled in a complicated mortgage fraud scheme.
Taneja pleaded guilty in November in US District Court in Alexandria to conspiracy to commit money laundering.
Both prosecutors and the defense had agreed on the seven-year sentence as part of the plea bargain. While US District Court Judge Claude Hilton could have imposed a higher sentence, he accepted the recommendation.
Prosecutor Stephen Learned said Taneja’s fraud in which four banks lost a combined $33m was the largest bank fraud scheme prosecuted at the courthouse in at least 20 years.
"It’s a very significant sentence," Learned said of the seven years.
Taneja owned his own mortgage loan business since 1990, focusing on the South Asian community. He was better known in northern Virginia’s large Indian community, though, as a concert promoter and producer of Bollywood films. He also donated large amounts to Hindu temples in the region.
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 $16.5m (£11.4m), very large by Bollywood standards.
At his sentencing hearing, Taneja apologized for his actions ‘and the embarrassment to my family and the aggravation to my victims’.
Though the details were complicated, Taneja defrauded the banks in large part by creating fictitious loans and mortgages, and then selling them to investors. In other cases, he sold legitimate mortgages to multiple banks.
Court records from parallel proceedings in bankruptcy court include letters from distressed and confused homeowners who refinanced their mortgages through Taneja and within a few months received demands from multiple banks demanding payment.
The scheme ran from 2001 through June, when Taneja’s company, Financial Mortgage, Inc., filed for bankruptcy.
Taneja’s defense lawyer, Robert Trout, said Taneja 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 juggled,’ Trout told the judge.
While Taneja owes $33m in restitution, the four banks that were defrauded Franklin bank, First Tennessee Bank, Wells Fargo bank and a JP Morgan Chase and Co. subsidiary called EMC Mortgage Co. are unlikely to collect anything more than a small fraction of their losses.
Taneja is in bankruptcy and Hilton’s restitution order requires Taneja to make payments of $300 (£200) a month after he is released from prison.
