There are some significant new developments in the saga of Robert T. ("Rob") Koger and the high profile civil and criminal cases surrounding him. Here is the latest. (Earlier articles are cited below.)
On Monday, September 9, 2013, Robert T. Koger, 47, was arrested and brought before a federal judge in the Eastern District of Virginia. At the detention hearing, a court determines whether an accused will be released from jail (on bail or otherwise) before the trial. In Koger's case the court found that Koger is a "flight risk" and he will therefore be held behind bars where he will stay until his trial for mail fraud and other criminal charges.
Background on the case
Koger was one of the principals in the Virginia-based hotel brokerage firm of Molinaro Koger, Inc., until the publicity of Koger's fraud and deceptions of client Host Hotels & Resorts led to the demise of his firm.
Earlier this year, on February 19, 2013, the US Attorneys' office announced that the COO of Molinaro Koger (Jonathan Propp) had pled guilty in federal court to conspiracy to commit wire fraud as part of a 3-year, $20 million "straw buyer" scheme involving the sale of hotels for the account of Host Hotels & Resorts.
It was only a matter of time until action was taken against Koger, and now the public process has started with the arrest and incarceration of Koger.
What happened at Monday's hearing?
In an article dated September 11, 2013 (Broker Arrested Over $2.5 M Real Estate Fraud), Kathryn Brenzel, writing for Law 360 reported on Koger's arrest and detention hearing. She noted that Koger is facing multiple [civil] lawsuits related to real estate fraud.
Remarkably, the affidavits cited in the report by Law360 say that Koger did not stop his fraudulent schemes when Host charged him with fraud. Instead, even during the pending criminal investigation, the report says that Koger continued his fraudulent activities through July and August, 2013. In fact, the federal authorities worked with one of the last victims to document part of the charges leading to his arrest.
According to an affidavit filed in connection with Monday's hearing:
"The methods and means that Koger used to execute the Tampa frauds are consistent with the long-term pattern of criminal tradecraft Koger has used to execute multiple other similar fraud schemes."
"Significantly, Koger has continued his pattern of activity while he knew he was under investigation and in an ostensible attempt to impede that investigation."Authorities estimate that Koger's fraudulent schemes garnered more than $50 million.
The case is USA v. Koger, case number 1:13-mj-00542, in U.S. District Court for the Eastern District of Virginia.
Why is this case significant?
The case of USA v. Koger is significant because it is a criminal case. It involves big names in the hotel industry -- a significant hotel brokerage firm, the largest lodging REIT in the country and other well-known industry players in the roles of good guys and bad guys. This kind of problem is certainly not the norm of hotel brokerage, nor even very common.
But the acts complained of here are flagrant and outrageous. The brokerage firm used straw buyers to defraud sellers into selling properties at one price and then quickly flipped such properties to other buyers for an instant profit. The brokers forged a dead straw buyer's signature. Brokers took funds that were to be placed in escrow accounts and paid salaries and operating expenses with them.
And according to an affidavit in the current case, Rob Koger, practically up to the date of his arrest, was using false identities (posing as "Rick Thompson" and "John Stern" among others), a slew of bogus email accounts and trying to steal millions of dollars through his chicanery.
In addition to the extreme conduct, it appears that the fraudulent schemes were BIG in scope -- perpetrated over 5 or more years, and involved up to $50 million stolen by Koger and his accomplices.
What was Koger thinking?