ALEXANDRIA, Va. – Vijay K. Taneja, popular in the Indian American community for his Bollywood shows in the US, pleaded guilty to a massive $33 million mortgage fraud case, the largest mortgage fraud case in Virginia in almost 20 years and among the largest nationally. The money was apparently used to fund Taneja’s Bollywood ventures, including investment in several films, the investigating agency said.

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.

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.

Prosecutors, led by Assistant U.S. Attorney Stephen Learned, told the judge 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.

The guilty pleas announced following the plea before Judge Claude M. Hilton. Taneja and his attorney, Robert P. Trout, declined to comment.

“He has millions of dollars unaccounted for, there’s so much money, and it’s difficult to figure out where it all went,” said U.S. Attorney Stephen Learned.

Taneja faces the maximum penalty for conspiracy to commit money laundering, 20 years prison and a fine of $500,000. His sentencing is set for Jan. 30, 2009.

He was the producer of Himesh Reshammiya’s debut movie, Aap Kaa Surroor – The Real Luv Story in 2007 and Bobby Deol, Amisha Patel, and Arjun Rampal starrer Humko Tumse Pyaar Hai in 2006.

According to Elite Entertainment, he had promoted shows for Shahrukh Khan, Aamir Khan, Amitabh Bachchan, Salman Khan, John Abraham, Shahid Kapoor, Zayed Khan, Malika Sherawat, Kareena Kapoor, Esha Deol, Jagjit Singh, Gurdas Mann, Hrithik Roshan, Karishma Kapoor, Aftab Shivdasani, Arjun Rampal, Sunil Shetty, Akshay Kumar, Saif Ali Khan, Urmila Matondkar, Ravena Tandon, Sunjay Dutt, Aishwarya Rai, Rani Mukharjee, Madhuri Dixit, and many more Indian artists.

The investigation involving FMI was conducted by Special Agents of the FBI and the IRS.

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