Indian Entrepreneur Pleads Guilty In $33 Million Fraud—"Virginia Man" In Headline
November 17, 2008, 10:34 PM
A+
|
a-
Print Friendly and PDF
A typical headline in the  Vijay Taneja case is Virginia man pleads guilty to mortgage fraud, Forbes, November 14, 2008.That is, except in Virginia, where it was Man Pleads to Mortgage Fraud.

As usual, the Times Of India manages to get the main point in the headline, as the American press refuses to do:Indian-American pleads guilty to $33m fraud, November 15, 2008.

The whole point about Mr. Taneja's life for many years has been that he's an Indo-American businessman, and before he got caught in mortgage fraud, the Washington Post used to run stories about him importing Indian talent to entertain the Indo-American community in the Washington area:

"Backstage, promoter Vijay Taneja paced between the stars' makeshift dressing rooms and a VIP room where an Indian dinner buffet was being served. Nearby, a group of men staged an even more exclusive party, its entertainment the more mainstream likes of Jack Daniels and Johnnie Walker.

Outside, stretch limousines waited. Their names might twist the average American tongue, but these stars travel in style — along with their managers, makeup artists, security guards, back-up dancers, families and anyone else they can't live without for two weeks or so.

By now, promoters know immigration policies. They must apply for performer visas months before scheduling a tour and make sure the dancers really dance, the singers really sing and all really intend to return home. In 2003, Daler Mehndi, one of India's most popular performers of an upbeat Punjabi folk music known as bhangra, and his brother were accused of accepting tens of thousands of dollars to facilitate passages out of India by allowing people to pose as part of their troupe. The charges were later dropped.

Besides tougher questions and more-thorough background checks at U.S. embassies, Taneja said he has not observed a reduction in visas granted. If anything, he finds himself sponsoring more, the talent tumbling out of his rented limos.

....

For years, Taneja had a lock on the South Asian entertainment scene in Washington, running the concert business in addition to his mortgage lending company. He partners with promoters in other cities who often have better luck marketing concerts through ethnic media, music shops and grocery stores on their own turf. And sometimes, he serves as the local promoter himself."

Concert Promoters Gamble on Bringing Global Stars to U.S. By S. Mitra Kalita, Washington Post, June 13, 2005

Mr Taneja was also featured very regularly in the Home Sales column of the Washington Post: I'm not quite sure why the Edinburgh Drive property is mentioned twice in November, 2007, but the flip in December would be suspicious even if you didn't know that Financial Mortgage Inc was Taneja's own company. The main Washington Post story explains what he did with his money:
Prosecutors 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. "He has millions of dollars unaccounted for," Assistant U.S. Attorney Stephen Learned said as he asked Hilton 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."

Trout emphasized that Taneja, a U.S. citizen, has cooperated extensively with the government, and Hilton ordered him released on a personal recognizance bond.

Members of the Washington region's tightly knit Indian community said Taneja was revered by many because of his show business connections and insistence on doing business mainly with others in the community.

[Va. Bollywood Investor Admits $33 Million Fraud, By Jerry Markon, Washington Post, November 14, 2008]

The details of his fraud aren't important, but they're very interesting:
Court documents say Taneja's main company, Financial Mortgage Inc., also did refinancings and defrauded banks by not paying off the first mortgages. For example, a customer would borrow $500,000, intending to receive $100,000 as cash and use $400,000 to pay off his first mortgage. Taneja would give the customer the $100,000 and pocket the $400,000. The bank that held the first mortgage wouldn't notice because it didn't know there had been a refinancing.
What's  more important is the differences in the press response to an "immigrant entrepreneur" when he gets indicted. If he's succeeding, it's Immigrant Entrepreneurs Shape a New Economy , but when they get arrested it's Virginia man pleads guilty to mortgage fraud.