Published on:

Stranger than fiction? A closer look at the Molinaro Koger criminal convictions regarding deals with Host . . .

By Jim Butler and the Global Hospitality Group®
Hotel Lawyers | Authors of
21 February 2013

US Attorney’s Office announces criminal convictions arising from Host’s claims against Molinaro Koger

On February 19, 2013, the US attorney’s office announced that Jonathan Propp, 48, of McLean, Va., pleaded guilty today to conspiring with others to steal more than $20 million from Host Hotels and Resorts L.P. (Host), one of the nation’s largest hotel owners, by executing a series of illegal sales of hotels.”

According to court records, Propp was the chief operating officer of Molinaro-Koger, an international hotel real estate brokerage firm headquartered in Tysons Corner, VA From 2009 through 2012, Propp conspired with others to illegally sell hotels owned by Host to straw buyers, who would then immediately sell the properties to a buyer at a higher price, with the conspirators pocketing the difference. Propp admitted that he posed as a straw buyer, forged signatures, and obtained a driver’s license for one of the straw buyers who had died before the fraudulent sale could be completed.

Todd Lawyer, 53, of Fairfax, VA, also pleaded guilty today for his role as a straw buyer in the conspiracy. The conspirators earned more than $20 million by illegally flipping the hotels.

In addition, Propp admitted that he participated in a scheme to steal and launder an additional $15 million from deposits provided by prospective buyers of hotels, which they purported to hold in escrow but instead used to pay for personal and business expenses. Propp used the money to pay Molinaro-Koger’s expenses and employee salaries, despite knowing the escrowed funds were obtained fraudulently.

What were they thinking?

These criminal convictions obtained by guilty plea have been widely reported in the press, including Kris Hudson’s article in the Wall Street Journal. See “Former Brokerage Executive Pleads Guilty in Flipping Case.

This case and its underlying facts are pretty amazing. I first wrote about this matter in August 2011 after reviewing the high-profile civil lawsuit that Host Hotels & Resorts filed against Robert T. Koger, personally) and his firm. See “Hotel Lawyer on the fiduciary, contractual and agency duties of hotel brokers – Host Hotels & Resorts LP v. Molinaro Koger litigation“.

The guilty pleas suggest that the nearly unbelievable allegations in the civil complaint are pretty close to the truth. Use of straw men, forged signatures of a dead man, notarized by Koger’s secretary . . . directing sales to straw men to deprive the client of maximum sales price and convert it to the broker and straw men . . . This real story is stranger than fiction.
Click here to take another look at the Host complaint.

For other articles on this case see:

Robert T. Koger — Hotel Lawyer with the FBI affidavit that helped put Koger behind bars

Rob Koger — putting the whole story into perspective

Robert T. Koger of Molinaro Koger is arrested and put behind bars. A shocking course of continuing fraudulent conduct is unveiled.

Stranger than fiction? A closer look at the Molinaro Koger criminal convictions regarding deals with Host . . .

Hotel Lawyer on the fiduciary, contractual and agency duties of hotel brokers Host Hotels & Resorts LP v. Molinaro Koger litigation

This is Jim Butler, author of and hotel lawyer, signing off. We’ve done more than $60 billion of hotel transactions and have developed innovative solutions to help investors be successful in bidding for hotel acquisitions, and helping investors and lenders to unlock value from troubled hotel transactions. Who’s your hotel lawyer?

Our Perspective. We represent hotel owners, developers, investors and lenders. We have helped our clients find business and legal solutions for more than $60 billion of hotel transactions, involving more than 1,300 properties all over the world. For more information, please contact Jim Butler at or 310.201.3526.

Jim Butler is a founding partner of JMBM, and Chairman of its Global Hospitality Group® and Chinese Investment Group™. Jim is one of the top hospitality attorneys in the world. GOOGLE “hotel lawyer” and you will see why.

Jim and his team are more than “just” great hotel lawyers. They are also hospitality consultants and business advisors. They are deal makers. They can help find the right operator or capital provider. They know who to call and how to reach them.