Washington, Nov 14 (UNI) Indian-American Businessman Vijay K Taneja, known for his connections in Bollywood film circles, pleaded guilty in a U S district court to defraud banks to the tune of at least 33 million dollars.
Taneja (47) pleaded guilty yesterday to one count of conspiracy to commit money laundering in connection with a mortgage fraud scheme involving his company Financial Mortgage Inc.(FMI) involved in selling mortgages on residential properties in the Washington, D.C., metropolitan area.
Sentencing is set for January 30. Taneja faces a maximum of 20 years in prison and a 0,000 fine.
According to court documents, before FMI sold its mortgages to financial institutions as long-term investors, FMI utilised 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 dollars to four financial institutions by the time the company filed for bankruptcy in June 2008.
According to the Washington Post, Taneja 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. He had an aura about him, a celebrity image that made people trust him.
Taneja admitted in the court that his entertainment ventures were financed by money obtained through an extensive mortgage fraud scheme.
The daily says that prosecutors told the court 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 the court 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.'' UNI XC ARB KP1913