Straw purchase
The examples and perspective in this article deal primarily with the United States and do not represent a worldwide view of the subject. (July 2016) |
A straw purchase or nominee purchase is any
In some jurisdictions, straw purchases are legal even if the end user is not legally able to purchase the good or service themselves.[1]
Legal uses
Examples of legal straw purchases would be purchasing groceries for
If straw purchases are legal despite the good or service purchased not being legal for the end user to receive, the end user may become liable for illegally possessing or receiving the good or service, but the straw buyer who was legally able to make the purchase is generally not held liable for their actions.
Illegal uses
Firearms
This section needs to be updated. The reason given is: Bipartisan Safer Communities Act impacts straw purchases. (December 2022) |
In the
Alcohol
Straw purchases of alcohol are illegal in most jurisdictions when a person under the legal
In England and Wales, buying alcohol on behalf of a person under 18 is a summary offence under section 149 of the Licensing Act 2003, punishable by an unlimited fine (level 5 on the standard scale). There is an exception for beer, wine or cider served to a 16 or 17 year old with a meal at a table.[3]
Tobacco and nicotine products
As of October 2015, it is an offence to buy tobacco, cigarette papers (for the purpose of smoking tobacco) or
Mortgage loans
The use of a straw person to obtain auto or mortgage loan funds is illegal if and when the funds are misused intentionally. In Canada, the Bank of Montreal sued hundreds of people, including Federal Conservative MP Devinder Shory, for allegedly being involved in a mortgage fraud in which the bank lost $30 million.[5] The bank alleged that straw buyers, in exchange for a cash payment, applied for mortgage loans in the Calgary area on behalf of other parties and knew before submitting the applications that the loans would not be paid. The lawsuits were settled out of court.[6]
In United States v. Quintero-Lopez, two men were charged with locating eight straw purchasers for homes and helping the straw purchasers falsify pay history documents in order to obtain $8.3 million in mortgage loans. The government alleged these loan purchases were illegal because the straw purchasers inflated their incomes as part of an attempt to defraud the lenders. In 2011, one of the two straw purchaser recruiters was sentenced to six years in prison and the other was sentenced to one year of probation.[7] Straw or nominee purchases of mortgage loans are legal when intent to defraud is not present.
See also
References
- ^ Merrick, Jane (November 30, 2013). "Labour would make it illegal to buy cigarettes for children". The Independent. London: Independent Print Limited. Archived from the original on 2022-05-25. Retrieved 22 July 2016.
- ^ "ATF P 5300.4 – Federal Firearms Regulations Reference Guide 2005 General Information discusses "straw purchase" on p. 165 (application/pdf Object)" (PDF). www.atf.gov. Retrieved 2010-05-16.
- ^ "Licensing Act 2003: Section 149", legislation.gov.uk, The National Archives, 2003 c. 17 (s. 149)
- ^ The Children and Families Act 2014 ss. 91 and 92 came into force on 1 October 2015. Regulations coming into force at the same time added e-cigarettes, which had become popular since the Act's enactment.
- ^ "Calgary – MP Shory accused in giant mortgage fraud". CBC News. 2010-05-05. Archived from the original on May 26, 2022. Retrieved 2010-05-16.
- ^ "'Straw buyer' seduced into mortgage scheme". CBC News. 2010-05-06. Archived from the original on February 13, 2023. Retrieved 2010-05-16.
- ^ Bell, Alexis (2010). Mortgage Fraud & the Illegal Property Flipping Scheme: A Case Study of United States v. Quintero-Lopez. Archived from the original on 2012-03-28.