A straw purchase is when a person (the "straw purchaser" or "straw buyer") buys a good or service on behalf of someone else who is unable or unwilling to make the purchase themselves. The straw purchaser acquires the item and then transfers it to the actual intended recipient, who is often the true buyer but may be legally barred or financially unable to buy the item directly
. Straw purchases can be legal or illegal depending on the circumstances. They are legal when done without fraud or criminal intent, such as buying groceries for someone who cannot shop for themselves or helping a relative obtain a car when they cannot get financing
. However, straw purchasing is often illegal when it involves concealing the real buyer's identity to commit fraud, when the goods are illegal for the end user (e.g., firearms for someone who fails a background check), or when used in scams like mortgage fraud or illegal gun sales
. In summary:
- Definition: Buying on behalf of another who cannot or will not buy themselves.
- Legal uses: Assisting those unable to purchase; no fraud involved.
- Illegal uses: Concealing identity to commit fraud, buying for prohibited persons, or engaging in criminal schemes.
- Common examples: Firearms bought illegally for others, mortgage fraud, car purchases for someone with poor credit.
Thus, straw purchasing is a form of proxy buying that can be lawful or unlawful depending on intent and context
