Nevada Laws for "Straw Buyer Schemes"

In recent years Nevada has seen a spike in mortgage fraud cases involving "straw buyer schemes." Penalties for participating in a straw buyer scheme may amount to decades in prison and millions in fines. But a skilled Las Vegas criminal defense lawyer might be able to get these charges lessened or even dismissed completely.

This article explains the law behind Nevada straw buyer schemes. Keep reading to learn about what constitutes a straw buyer scheme, how courts punish it, and ways these charges may be fought and defeated.

Mortgage fraud in print with a  gavel
Straw buyer schemes are a type of mortgage fraud.


"Straw buyer schemes" are a type of Nevada mortgage and real estate fraud. They typically involve the following six "players":

  • A real estate broker
  • A mortgage broker
  • A person who wants to sell his/her home
  • A person who wants to buy the home but lacks the credit
  • A "straw buyer" who usually has good credit and buys the home for the wannabe homebuyer with bad credit
  • A notary who notarizes all the real estate paperwork

Straw buyer schemes can operate in a variety of ways. For instance, sometimes all of the players are in on the fraud, or sometimes just one of them is perpetrating the scheme. Or sometimes the real estate broker fabricates a fictitious straw buyer, home seller or homebuyer to carry out the fraud. Reno NV criminal defense attorney Michael Becker illustrates a classic straw buyer scheme scenario in Nevada:

Adam, a real estate broker in Henderson, approaches Bill, who has good credit.Adam persuades Bill to buy a house for Charles, who doesn't have enough credit to buy the home himself. Adam agrees to pay Bill $5,000 to front the real estate purchase, and Bill believes he is "doing good" by helping Charles. Adam gets a handsome commission, which he splits with Charles. However, Charles never pays the mortgage, and the bank forecloses on the house. Bill then has to declare bankruptcy and loses his good credit.

Here, Adam, Bill, and Charles could all be booked at the Henderson Detention Center for fraud. Even Bill, who meant no harm, could be prosecuted because he intentionally used his good credit to secure a mortgage for someone with bad credit.

Straw buyer crimes

There is no federal law that specifically prohibits straw buyer schemes. Instead, the U.S. Attorney's Office prosecutes suspected straw buyers by bringing a variety of fraud charges. Elko NV criminal defense attorney Neil Shouse summarizes the three most common federal crimes related to straw buyer schemes:

  1. The federal crime of bank fraud in Nevada: Straw buyer schemes frequently involve bank fraud because the straw buyer is deceiving the bank into selling him/her a home meant for someone with bad credit.
  2. The federal crime of wire fraud in Nevada: If a defendant in a straw buyer case allegedly used TV, radio, the phone or internet in furtherance of carrying out the straw buyer scheme, then the state may bring wire fraud charges. The only requirement is that the wire communication must have crossed state lines for Nevada federal court to have jurisdiction to bring this charge.
  3. The federal crime of mail fraud in Nevada: This crime is meant to punish defendants who allegedly used a mail service (such as the U.S. post office or UPS) to help execute a straw buyer scheme. Unlike wire fraud, there is no requirement for the mail to have crossed state lines for it to be a federal offense.

Suspects in Nevada straw buyer schemes face an array of state crimes as well. These include:

  • The Nevada crime of foreclosure fraud (NRS 645F.400): People who sell foreclosure consultant services face fraud charges if they fail to live up to the terms of their contract. In a straw buyer scheme, purported foreclosure consultants may try to trick someone (the "straw") into buying a home for someone facing foreclosure.
  • The Nevada crime of mortgage fraud (NRS 205.372): Like it sounds, mortgage fraud is intentionally defrauding a party to a mortgage transaction. Any straw buyer scheme involving a straw man taking out a mortgage would qualify as mortgage fraud.
  • The Nevada crime of forgery (NRS 205.090): Forgery is when someone makes or uses a falsified document with the intent to defraud another. Parties to a straw buyer scheme such as notaries who knowingly falsify mortgage or loan documents face forgery charges.

Note that federal authorities aggressively investigate suspected straw buyer schemes in Nevada. Since the Southern Nevada Mortgage Fraud Task Force commenced in 2008, about two hundred people have been charged with mortgage fraud in federal court. Other agencies that investigate straw buyer schemes include the FBI and the Las Vegas Metropolitan Police Department.


There are many different ways straw buyer schemes can be conducted. Consequently, the best defenses to fight straw buying allegations depend on the specifics of each individual case and which charges the prosecution has brought. The following are just some ways to fight Nevada allegations of straw buying schemes:

  • No intent to defraud. Whether the defendant is charged with bank-, wire-, mail-, or mortgage fraud, he/she should not be convicted of a straw buyer scheme unless the prosecution can prove that he/she had an intent to defraud. As long as the defense attorney can show that the defendant didn't mean to deceive anyone, was tricked into making a false statement, made an honest mistake, and had no intent to harm anyone, the charges should be dropped.
  • Not enough evidence to convict. The prosecution bears the burden to prove that a defendant is guilty beyond a reasonable doubt in order for the court to convict him/her. So if the defense attorney can demonstrate that the state's evidence is too insufficient, inconsistent and unreliable to sustain a guilty verdict for engaging in a straw buyer scheme, then the case should be dismissed.
  • Illegal police search. The U.S. Marshals Service may not conduct searches and seizures of evidence that overstep Constitutional bounds. If the cops may have conducted an illegal search in a straw buyer scheme case, the defense attorney could file with the court a motion to suppress evidence in Nevada. If the judge then grants the motion and dismisses all the evidence procured from the faulty search, the prosecution may not be left with sufficient proof to hold the defendant criminally liable.


The punishment for taking part in a Nevada straw buyer scheme depends on the specific charges that the defendant is convicted of and whether the case is in federal or state court. Typically, a sentence can include years or decades in prison and/or astronomically high fines and restitution.

In addition to criminal penalties, defendants convicted of taking part in straw buying schemes in Nevada face civil suits from victims as well as disciplinary measures from professional associations, such as loss of their real estate licenses.

Depending on the case, an experienced criminal defense attorney may be able to get the charges reduced or even dropped so the defendant's record stays clean. Or they may be able to strike a plea bargain with the prosecution where the defendant serves the minimum penalties such as probation with no incarceration.

Arrested? Call . . . .

If you're being charged with engaging in a straw buyer scheme in Nevada, phone our Las Vegas criminal defense attorneys at 702-DEFENSE (702-333-3673) for a free consultation. We'll work our hardest to negotiate and litigate the most favorable resolution we can achieve for your case.

To learn about California straw buyer laws, go to our page on California straw buyer laws.

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