Straw purchase
Encyclopedia
A straw purchase is any purchase wherein the purchaser knowingly acquires an item or service for someone who is, for whatever reason, unable to purchase the item or service themselves. This term can be applied to any such purchase, but it is most widely used in relation to the sale of firearms, especially in United States federal gun laws.
in most cases, as noted below. For example, someone may purchase an automobile for another who, due to poor credit, cannot purchase it themselves. The purchase is illegal; however, most financial institutions (i.e. banks) have very strict policies regarding this practice; if the other party defaults on payment, the original purchaser would be liable for the debt even if they could not collect the debt and/or repossess the car from the other party.
, a straw purchase is defined as any purchase from a dealer holding a Federal Firearms License
where the buyer conducting the transaction is acting as a proxy for another person. The law does not distinguish between someone who is purchasing on behalf of a person who legally cannot purchase or possess a firearm, and one who is not.
Beginning in 1975, ATF
officials apparently reached a judgment that a dealer who sells to a legitimate purchaser may nonetheless be subject to prosecution or license revocation if he knows that that individual intends to transfer the firearm to a nonresident or other unqualified purchaser. This position was never published in the Federal Register and is indeed contrary to indications which Bureau officials had given Congress, that such sales were not in violation of existing law. Rather than informing dealers of this distinction, ATF agents set out to produce mass arrests upon these "straw purchase" sale charges, sending out undercover agents to entice dealers into transfers of this type.
In the United States, straw purchases are a felony
violation of the Gun Control Act of 1968
for both the straw purchaser (who can also be charged with lying on Federal Form 4473) and the ultimate possessor. One of the questions on Form 4473
is “I am the buyer of this firearm” and the purchaser must answer honestly yes or no, by checking the appropriate box in ink. However, purchase of a firearm as a bona fide
gift for someone who can legally own such a firearm is permitted.
Many gun shops have jointly participated in programs (such as: “Don’t Lie For The Other Guy”) to deter such purchases.
sued hundreds of persons, including Federal Conservative
MP Devinder Shory
, for allegedly being involved in a mortgage fraud in which the bank lost $30 million. The Bank claims that "straw buyers" were recruited by fraudsters. In exchange for a cash payment the "straw buyers" would allow their names to be used on mortgage applications to obtain real estate properties in the Calgary
area.
Car purchase
A straw purchase is illegal per seIllegal per se
The term illegal per se means that the act is inherently illegal. Thus, an act is illegal without extrinsic proof of any surrounding circumstances such as lack of scienter or other defenses...
in most cases, as noted below. For example, someone may purchase an automobile for another who, due to poor credit, cannot purchase it themselves. The purchase is illegal; however, most financial institutions (i.e. banks) have very strict policies regarding this practice; if the other party defaults on payment, the original purchaser would be liable for the debt even if they could not collect the debt and/or repossess the car from the other party.
Firearms
In the context of United States federal gun lawsGun law in the United States
Gun law in the United States is defined by a number of state and federal statutes. In the United States of America, the protection against infringement of the right to keep and bear arms is addressed in the Second Amendment to the United States Constitution...
, a straw purchase is defined as any purchase from a dealer holding a Federal Firearms License
Federal Firearms License
A Federal Firearms License is a license that enables an individual or a company to engage in a business pertaining to the manufacture of firearms and ammunition or the interstate and intrastate sale of firearms...
where the buyer conducting the transaction is acting as a proxy for another person. The law does not distinguish between someone who is purchasing on behalf of a person who legally cannot purchase or possess a firearm, and one who is not.
Beginning in 1975, ATF
ATF
- Places :* ISO 3166-1 alpha-3 country code of French Southern and Antarctic Lands* Chachoan Airport , Ambato, Ecuador- Organizations :...
officials apparently reached a judgment that a dealer who sells to a legitimate purchaser may nonetheless be subject to prosecution or license revocation if he knows that that individual intends to transfer the firearm to a nonresident or other unqualified purchaser. This position was never published in the Federal Register and is indeed contrary to indications which Bureau officials had given Congress, that such sales were not in violation of existing law. Rather than informing dealers of this distinction, ATF agents set out to produce mass arrests upon these "straw purchase" sale charges, sending out undercover agents to entice dealers into transfers of this type.
In the United States, straw purchases are a felony
Felony
A felony is a serious crime in the common law countries. The term originates from English common law where felonies were originally crimes which involved the confiscation of a convicted person's land and goods; other crimes were called misdemeanors...
violation of the Gun Control Act of 1968
Gun Control Act of 1968
The Gun Control Act of 1968 , by president Lyndon Johnson, is a federal law in the United States that broadly regulates the firearms industry and firearms owners...
for both the straw purchaser (who can also be charged with lying on Federal Form 4473) and the ultimate possessor. One of the questions on Form 4473
Form 4473
A Firearms Transaction Record, or Form 4473, is a United States government form that must be filled out when a person purchases a firearm from a Federal Firearm License holder ....
is “I am the buyer of this firearm” and the purchaser must answer honestly yes or no, by checking the appropriate box in ink. However, purchase of a firearm as a bona fide
Bona Fide
Bona Fide is a studio album from rock band Wishbone Ash. It is the first studio album in six years and is the only studio album to feature guitarist Ben Granfelt...
gift for someone who can legally own such a firearm is permitted.
Many gun shops have jointly participated in programs (such as: “Don’t Lie For The Other Guy”) to deter such purchases.
Alcohol
Another example of an illegal straw purchase involves alcohol; these purchases are particularly common as persons under the drinking age frequently request that a person above the legal age purchase alcohol for them. If intent can be proven, this action is illegal and punishable according to state and federal law.Mortgage fraud
The Criminal Intelligence Service Canada defines a straw buyer as "an individual who pretends to be a legitimate buyer for a property but in reality is in collusion with another criminally inclined individual to further a mortgage scam. The straw buyer often uses fake or stolen identification to prevent being traced." In May 2010 the Bank of MontrealBank of Montreal
The Bank of Montreal , , or BMO Financial Group, is the fourth largest bank in Canada by deposits. The Bank of Montreal was founded on June 23, 1817 by John Richardson and eight merchants in a rented house in Montreal, Quebec. On May 19, 1817 the Articles of Association were adopted, making it...
sued hundreds of persons, including Federal Conservative
Conservative Party of Canada
The Conservative Party of Canada , is a political party in Canada which was formed by the merger of the Canadian Alliance and the Progressive Conservative Party of Canada in 2003. It is positioned on the right of the Canadian political spectrum...
MP Devinder Shory
Devinder Shory
Devinder Shory is is a Canadian politician, who represents the electoral district of Calgary Northeast as a federal Member of Parliament....
, for allegedly being involved in a mortgage fraud in which the bank lost $30 million. The Bank claims that "straw buyers" were recruited by fraudsters. In exchange for a cash payment the "straw buyers" would allow their names to be used on mortgage applications to obtain real estate properties in the Calgary
Calgary
Calgary is a city in the Province of Alberta, Canada. It is located in the south of the province, in an area of foothills and prairie, approximately east of the front ranges of the Canadian Rockies...
area.