A Fairfax City businessman pleaded guilty Thursday to a $33 million mortgage fraud scheme that prosecutors called one of the largest of its kind during the national decline of the housing market.
Vijay Taneja, 47, created fake mortgage loans through his company Financial Mortgage Inc. and then sold those loans to banks as long-term investments. Taneja would work with another group of financial institutions, known as “warehouse lenders,” to temporarily fund the mortgages before they were sold.
By the time FMI filed for bankruptcy this June, the scheme started in 2001 caused $33 million in losses to four financial institutions: First Tennessee Bank, Franklin Bank, Wells Fargo Bank and EMC Mortgage Corp.
Taneja is a well-known member of the local Indian American community, and officials said he invested his proceeds in Indian films.
He faces up to 20 years in prison and a $500,000 fine when he’s sentenced on Jan. 30.
