Corruption: Guilty plea in $33 million laundering and fraud case

ALEXANDRIA, Va., Nov. 13 /PRNewswire-USNewswire/ -- Vijay K. Taneja, 47, of Fairfax, Va., 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. Dana Boente, Acting U.S. Attorney for the Eastern District of Virginia, 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 (IRS), Criminal Investigation Division, made the announcement today following the plea before Judge Claude M. Hilton. Sentencing is set for Jan. 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 creating fictitious loans with bogus loan closings; selling the same legitimate loan to multiple investors; and 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 FMI was conducted by Special Agents of the FBI and the IRS. The prosecution of the case is being handled by Assistant U.S. Attorney Stephen Learned.

Source: U.S. Department of Justice

Published by Mike Hitchen, mikehitchenconsulting.com
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