A Washington, D.C.-area hotel broker has been sentenced to 11 years in prison after being found guilty of "orchestrating a series of fraudulent schemes resulting in more than $55 million in losses," reports The Washington Post, citing the U.S. Attorney’s Office of the Eastern District of Virginia.
Robert Koger, president and sole owner of Molinaro Koger, a hotel real estate brokerage firm in Vienna, Va., was tied to various schemes, which included a a pair of deceptive sales of Host Hotels & Resorts' properties, costing the REIT more than $22 million.
As The Post reports it, Koger had been hired by Host to sell two properties, but instead of selling to the highest bidders, Koger allegedly sold the properties to straw buyers, who then immediately resold them to the interested buyers for a profit. Koger allegedly orchestrated a similar deal in which a straw buyer purchased promissory notes backing European hotels that Host was interested in and then resold them to Host at a higher price, pocketing the difference. Molinaro Koger was ordered to pay $22.7 million to Host in 2012.
Other incidents included an alleged Ponzi scheme to steal and launder funds held in escrow for prospective hotel buyers and an extortion claim involving the owner of a Pittsburgh hotel. Koger pleaded guilty in January to wire fraud and conspiracy to commit wire fraud.
"Koger’s sentencing ensures that he can no longer abuse his trusted position as a broker to defraud his clients. Host is grateful for the government’s investigation and efforts," Elizabeth A. Abdoo, general counsel and secretary for Host Hotels, said in a statement, adding that Host will continue to pursue its complaints against Koger’s law firm, Fox Rothschild.