A straw purchase is when someone buys goods or services on behalf of someone who cannot legally do so. This is often done with firearms, automobiles, real estate, and alcohol using forged documents and stolen identities. Straw men can be punished with fines or imprisonment, and dealers or lenders are not guilty if they did not know. Straw purchases with criminal intent can result in penalties such as fines, community service, or jail time.
Any purchase made by a person on behalf of someone who is unable to do so legally is a straw purchase. While there can be many types of goods purchased this way, the most common are firearms, automobiles, real estate, and alcohol. Some transactions involve the use of forged documents and stolen identities, especially when dealing with real estate. If criminal intent can be proven, these purchases can sometimes be punishable by fines or imprisonment.
A person who makes a straw purchase is known as a straw man. In most cases, these purchases are illegal for both the person making the transaction and the individual receiving the goods. For this reason, many firearms sales contracts warn buyers against conducting a transaction on someone else’s behalf.
Before a transaction can be considered a straw purchase, the buyer must be aware that he is obtaining goods or services for someone else because the other party is unable to legally do so. This may be because in some cases that person has poor credit. Other times, it’s because they may be too young to buy certain goods, such as alcohol or tobacco. It may also be because federal firearms laws prohibit certain groups of people from purchasing firearms.
Straw men can dupe lenders by providing false names, IDs, or social security cards. Fraudsters often look for individuals to act as agents when dealing with financial institutions, providing them with the necessary documentation to make the straw purchase. These individuals often disappear shortly after transactions are completed, taking the illegally purchased goods with them. If the scheme is eventually discovered, the straw man can probably expect to be held accountable for his and the fraudster’s actions.
Although a straw man purchase is an illegal act, a dealer or lender is not guilty if he did not know he was dealing with a straw man. Even so, people who suspect unauthorized purchases are being made should notify the authorities. This is especially true if it appears that someone has provided false identification documents.
An individual who completes a straw purchase with the intent to further a criminal action can be punished in many jurisdictions. This could happen anytime firearms are obtained illegally so that a crime can be committed. It could also include providing alcohol to minors. Penalties for committing this act vary from country to country, but often include fines, community services or even jail time.
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