“Straw Donors,” “Straw Dogs,” “Straw Owners”: Straw Burns Fast, Run Like Hell!

By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law I was just reading an article on a congresswoman (actually an ex-congresswoman now) who was accused of stealing millions of dollars in federal funds using “straw donors” to then filter it into her campaign for Congress. Immediately, the term “straw dogs” popped into my mind as well as the term “straw owners.” Since I am routinely being consulted by clients, including physicians and nurse practitioners, about being made the “straw owner” of a medical practice, medical spa, or our healthcare clinic, I thought I would write a short blog about how health professionals should immediately turn their backs on and run away from any such proposal.

What Is a “Straw Dog”?

The term “straw dog” is a Chinese expression referring to something that is treated with respect and reverence initially, but then is given up as being valueless and sacrificed within a short period of time. In some Chinese customs, goals or manikins of dogs were made out of straw and then used as a reference in certain celebrations as protectors of the temple, feast, or community. Immediately afterwards, they would be thrown on a bonfire and burned.

What Is a “Straw Owner”?

A “straw owner” is a term used in the law to describe someone who is not actually the owner but is being used, in effect, as a sacrificial puppet that can be sacrificed and discarded at a later date. We often have clients and potential clients come to us who state they had been made the owner of a medical clinic, medical spa, or healthcare clinic without having to put up any money or do anything in the form of actually purchasing shares of stock or a legitimate ownership interest in that business. What is actually going on is that they are being conned and manipulated and being naïvely used as a tool by someone else who is supposed to have a legitimate medical doctor or licensed healthcare professional as the real owner of the business. I am speaking of someone willing to violate the law by finding a sucker willing to allow the use of his/her name, medical license, and provider number to violate the law indirectly. Federal case law and Black’s Law Dictionary define “straw owner” as a nominal owner, one “who holds legal title to property on behalf of another, often to conceal the true owner’s interest or to disguise the illegal source of the property.” I have clients and potential clients contact me and tell me that they are the “owner on paper,” “non-equity,” or “owner-in-name-only” of a medical business. The issue that seems to escape them is that they are being used for a business or purpose that requires a “real owner,” not a “straw owner.” They are, in fact, a “straw owner” or “sham owner” only, and, as such, they are being used to perpetrate a fraud on someone or some government agency.

The Illicit Purposes of Having a “Straw Owner.”

There are many states in which a medical practice or business is required to be owned and operated exclusively by medical doctors or other licensed healthcare personnel and not by businesspeople who are not healthcare professionals. The purpose of this “corporate prohibition on the practice of medicine” is to prevent business people from making medical decisions, which either because patients are or result in the fraudulent practice of healthcare to increase medical fees paid. Some states, such as Florida, do allow certain medical practices, otherwise known as “health care clinics,” to be owned and operated by laypeople who are not licensed health professionals, but only after meeting certain strict requirements and obtaining a license from the Florida Agency for Health Care Administration (AHCA). To avoid having to meet the strict requirements, including inspections by healthcare professionals, they create organizations and claim that they are owned by physicians or other licensed healthcare professionals when, in truth, they are not. This allows them to illegally skirt such regulations and inspections. There are some types of health-related businesses in Florida that have an absolute prohibition on being owned by laypeople. These include dental clinics, optometry practices, and chiropractic practices. We often see attempts made by businesspeople who are not licensed healthcare professionals to use “straw owners” for these.

If Offered Such a “Business Opportunity,” Run.

Remember, “straw owner,” “owner on paper,” “nominal owner,” and “sham owner” all mean the same thing. People often forget the old adage, “You get what you pay for.” They also forget the maxim: If it seems too good to be true, it isn’t.” Both apply in this situation. We are often consulted by clients and potential clients who have a number of problems with the “real owners” of these healthcare businesses. They are not allowed to make decisions or are forced to make decisions that are not in the best interest of the patient. The owners may be using their name, medical license, and provider number to order medically unnecessary services. Fraudulent billing under their name and license may be occurring. Often, they are not being paid because of the profits being reaped by the real owners. Working conditions, including decisions on hiring and firing experienced medical personnel, may be completely out of their hands. Regardless, it is a bad situation. The remedy is to avoid any such business relationship opportunity. If you are in one, consult with an experienced healthcare attorney regarding how to get out of it.

Contact Health Law Attorneys Experienced in Representing Health Care Professionals and Providers.

At The Health Law Firm, we provide legal services for all health care providers and professionals. This includes physicians, dentists, nurses, resident physicians, mental health counselors, social workers, pharmacists, and health facilities. Our legal representation also includes medical students, medical school professors, and clinical staff. We represent health facilities, individuals, groups, and institutions in investigations, contracts, sales, mergers, and acquisitions. The lawyers of The Health Law Firm are experienced in complex litigation and both formal and informal administrative hearings. We also represent physicians and other healthcare professionals accused of wrongdoing, patient complaints, and Department of Health investigations. To contact The Health Law Firm, please call our office at (407) 331-6620 or toll-free at (888) 331-6620 and visit our website at www.ThehealthLawFirm.com. About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Avenue, Suite 1000, Altamonte Springs, FL 32714, Phone: (407) 331-6620 or Toll-Free: (888) 331-6620 “The Health Law Firm” is a registered fictitious business name of and a registered service mark of The Health Law Firm, P.A., a Florida professional service corporation, since 1999. Copyright © 2026 The Health Law Firm. All rights reserved. No part of this work may be reproduced in any fashion in any medium for any purpose without the written permission of the copyright owner. The copyright owner asserts the right to have its name associated with the use of any part of this work.