Court documents cited by the Department of Justice say Vijay Taneja of Fairfax, Virginia cost four financial institutions a total of at least $33 million after they invested in fictitious loans he had created through his company, Financial Mortgage Inc (FMI).
An investigation involving special agents from the FBI and the Internal Revenue Service found that FMI created mortgages and used a group of "warehouse lenders" to temporarily fund the deals.
He then sold the mortgages to banks including Wells Fargo and the JP Morgan-owned EMC Mortgage Corporation, who were acting as long-term investors.
Mr Taneja then pocketed the proceeds of this refinancing when the bulk of the money should have been used to pay off prior mortgages secured on the same properties, the department said.
The Washington Post described the case as the largest mortgage fraud seen in Virginia since the 1980s and "among the largest nationally".
Sentencing is scheduled for January 30th, 2009.