David Saks: Former Hotel Broker Gets 11 Years in Prison for $55 Mil Fraud Schemes

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Former Hotel Broker Gets 11 Years in Prison for $55 Mil Fraud Schemes

Former Hotel Broker Sentenced to 11 Years in

Prison in $55 Million Fraud Schemes


Defendant Illegally Flipped Hotels Using Straw

Buyers, Conducted Ponzi Scheme with Escrow

Accounts, and Extorted Pittsburgh Hotel Owner

U.S. Attorney’s Office August 19, 2014
  • Eastern District of Virginia (703) 299-3700

ALEXANDRIA, VA—The president of an international hotel brokerage firm was sentenced today to 11 years in prison for conducting a wide-ranging set of multi-million dollar fraud schemes involving the sale of several hotel properties.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Timothy A. Gallagher, Acting Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the defendant was sentenced by U.S. District Judge Liam O’Grady.

Robert Timothy Koger, 48, formerly of Oakton, Virginia,

was the president and sole owner of Molinaro-Koger, an international hotel real estate brokerage and advisory firm headquartered in Tysons Corner, Virginia. Koger pleaded guilty on Jan. 16, 2014 to wire fraud and conspiracy to commit wire fraud.

According to court records, the charges arose from three separate schemes executed by Koger, which resulted in losses exceeding $55 million.

The first scheme involved Koger’s illegal flipping of hotels and promissory notes securing hotels in which Host Hotels and Resorts, L.P. (“Host”) and others were victims.

In the second fraud, Koger executed a Ponzi scheme to steal and launder funds received from prospective buyers of hotels that were to be held in escrow while Koger negotiated with the hotel’s owners regarding the terms of the sale.

In the third scheme, Koger defrauded a Tampa, Florida-based physician and businessman in connection with the latter’s ownership of a hotel in Pittsburgh, Pennsylvania.

In the first scheme, after Koger was hired by Host as a broker to sell two of its hotels, Koger located legitimate buyers for the properties at a fair market price. Rather than selling the hotels directly to the legitimate buyers, however, Koger recruited straw buyers controlled by him to whom he arranged the sale of the hotels by Host for considerably less than the legitimate buyers had agreed. The straw buyers then immediately turned around and sold the hotels to the legitimate buyers at the higher price previously arranged by Koger. Koger pocketed the difference between the legitimate purchase price and the straw buyer’s price, plus the commissions that Host paid Koger for arranging the “front end” sales with the straw buyers. In a similar manner, Koger defrauded Host by having a straw buyer purchase promissory notes securing European hotel properties in which Host was interested. The straw buyer then resold the notes to Host for considerably more than it paid for them. In total, Koger defrauded Host of over $22 million.

In the second fraud scheme, Koger received deposits from prospective buyers of hotels that were to be held in escrow while Koger negotiated with the hotel’s owners regarding the terms of the sale. Contrary to his representations to the prospective buyers, Koger was not actually holding their funds in escrow. Instead, he used their funds to pay for personal and business expenses, including to repay prospective buyers whose funds previously were purportedly held in escrow by Koger.

Finally, Koger defrauded “K.P.,” a Tampa-based investor who owned the Wyndham Grand Hotel in Pittsburgh. A management firm that held a promissory note secured by the hotel decided to sell the note, and K.P. submitted an offer to buy the note for less than its face value. In what is described in court records as a “walk-away fraud,” Koger used an alias (“Rick Thompson”) to contact K.P. about his bid for the hotel’s promissory note. As part of this process, Koger (acting as “Rick Thompson”) falsely claimed to K.P. that “Thompson” had submitted a higher bid for the note than K.P.’s bid, but “Thompson” then offered to withdraw his bid if K.P. paid “Thompson” $2.5 million to walk away from his purportedly higher bid. After K.P. paid off “Thompson,” Koger used a different alias (“John Stern”) to contact K.P. again about the property. In what is described in court records as a “break-up fraud,” “Stern” falsely offered to buy the hotel from K.P., but then threatened to sue K.P. over an alleged breach of contract related to the sale, unless K.P. agreed to pay “Stern” $15 million.

This case was investigated by the FBI’s Washington Field Office. Assistant U.S. Attorneys Michael E. Rich and Chad I. Golder prosecuted the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.

http://www.fbi.gov/washingtondc/press-releases/2014/former-hotel-broker-sentenced-to-11-years-in-prison-in-55-million-fraud-schemes?utm_campaign=email-Immediate&utm_medium=email&utm_source=fbi-in-the-news&utm_content=346235

 




David Saks



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Comment balloon 4 commentsDavid Saks • August 20 2014 09:03AM

Comments

Now this genius can stay in a "hotel" where he will get three free meals a day.

Posted by Fred Griffin Tallahassee Real Estate, Licensed Florida Real Estate Broker (Fred Griffin Real Estate) over 5 years ago

And become a skilled license plate manufacturer, Fred.

Posted by David Saks ((retired)) over 5 years ago

Nice to see that justice has prevailed in this case, David.

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) over 5 years ago

That swindler can enjoy the kool-aid and peanut butter and jelly sandwiches that room service will provide him, Gabe, like Fred mentioned.

Posted by David Saks ((retired)) over 5 years ago

This blog does not allow anonymous comments