Straw purchase

A straw purchase or nominee purchase is any purchase wherein an agent agrees to acquire a good or service for someone who is unable or unwilling to purchase the good or service themselves, and the agent transfers the goods/services to that person after purchasing them. In general, straw purchases are legal except in cases where the ultimate receiver of goods or services uses those goods or services in the commission of a crime with the prior knowledge of the straw purchaser, or if the ultimate possessor is not legally able to purchase the goods/services. In some jurisdictions straw purchases are legal in spite of the fact that the end user is not legally able to purchase the good or service him or herself.

Examples of legal uses

Examples of legal straw purchases would be purchasing groceries for a senior citizen who is unable to go to a supermarket oneself because of poor health, or a financed automobile for someone who cannot obtain it himself because of poor credit. In some cases, the agent in the straw purchase may receive money or recompense from the ultimate possessor. Obtaining loans through a straw buyer is legal except when the agent and ultimate user of the funds defraud the lender or foreseeable ultimate lender (such as by signing false mortgage documents designed to be mingled with other mortgages and securitized) or when the loan terms expressly prohibit use of an agent to obtain funds.. In cases where 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, while the straw buyer who was legally able to make the purchase is generally not held liable for his actions.