FFL Horror Story

20131218-111250.jpgWe’ve all heard of the “Gun Show Loop Hole” and know that no such thing actually exists. Private sales happen the same way inside gun shows as they do outside gun shows. Federal Firearms License holders use 4473 in their stores or if they sell their inventory elsewhere. This was a given as far as I was concerned, until a few days ago when a former FBI informant shared with me this story.

A long time gun shop owner and FFL decided to open up a new revenue stream by selling his inventory at gun shows. Some of his employees would take a few guns, set up tables and make some cash. For whatever reason, whether it be malice, laziness or both, they didn’t have customers fill out 4473s during these transactions. When the sales guys returned to the store they would take the serial numbers of the sold merchandise and write them on to old 4473s.

Skip ahead 15 years and the ATF finds a number of these guns in police evidence. They trace the guns from the manufacturer to the distributor to the this shop and then begin auditing the records. As you might expect, this is where the trail goes cold. The unsuspecting customers whose 4473s don’t match their purchases, can’t explain the confusion and the sales people who signed each form aren’t much help either.

The story will end after federal indictments are handed down. Which is expected any day now.
Obviously, many people were involved in carrying out these criminal acts, and many more people looked the other way, but I have to point out how bad this looks for those of us who do the right thing. If you were an employee in this store and you realized what was going on, would you blow the whistle? Do you think what the FFL did was, indeed, wrong?

33 thoughts on “FFL Horror Story”

  1. Yup, the FFL and his employees were in the wrong. The employees failed to follow the law, and the FFL either accepted this as OK, or at the very minimum, failed to ensure HIS BUSINESS was operated in accordance with law.

    It’s no different than if “store inventory” guns were sold “under the table” without a gun show being involved. Guns were sold without proper documentation and the documentation that was done was forged by store employees.

  2. Gotta blow the whistle on this one. We have the right to own firearms but we also have the obligation to follow the existing laws surrounding buys and sells.

    Not saying this was the buyers fault or even their responsibility; far from it. The seller clearly knew they were toeing a line, or outright wrong, selling these weapons without a 4473. Doctoring completed 4473’s, though is criminal and, it appears, will be punished. No grey area there.

  3. It has been proven time and again that no matter the law, criminals still exist. There has never been a law introduced that prevents criminals from obtaining anything from drugs to weapons. America played this out during the Prohibition Era to the same effect. The more you try to control a population, the more that population fights against it. Politicians have taken the long view and slowly reduced freedom for “security theater” and lazy Americans eat that up. In the truest sense the FFL did nothing wrong . Background check and forms are to convince the general public that owning a firearm is too much of a hassle and to depend on their government for security (of which it has no legal duty to perform for the individual)

    1. Just to throw a wrench in here: what do we think of the informant, working with ATF, who would go to gun shows to spot FFL employees?

      1. Per your article that isn’t what happened. The guns were sold none the wiser, no one “went to the show and spotted the employees.”

        It was when guns were recovered years later and traced to the store that the discovery of the crime was made.

        1. Yes, but the informant, as it turns out, did not inform on this case. He was just sharing a story with me. His work with ATF agents went on for years as well.

          1. But his work had nothing to do, apparently, with this kind of crime.

            All law enforcement agencies use informants. As Caleb noted, I’m not aware of anyone in the mainstream gun community, particularly in the industry itself, who promotes turning a blind eye to patently illegal sales to patently prohibited persons, whether by FFLs or anyone else.

          2. Maybe I just expected some to feel that his actions were not 2A friendly.

            I think it’s courageous of him to point out those who are circumventing the laws. Too often, I feel, the gun owning community fears speaking up out of a preference for showing a united front.

    2. the actions you described that the FFL and his employees performed are 100% illegal.

      Note just illegal, but immoral; i.e., falsifying the 4473s and purchase records of other customers.

  4. According to some guys in a shop up here (Anchorage) a similar crime happened here in town. The owner selling guns at a premium to know criminals. The business was shut down and charges filed.

    What this shows isn’t any sort of “weakness” in the system, it is no different from any other bookkeeping-based fraud at root, rather it shows the system worked as designed and that the ATF and local law enforcement have all the tools they need using the existing bound book system to track when criminals acquire guns illegally through dealers.

    As the DOJ has acknowledged, there is simply no possible way to monitor transactions -outside- the dealer system without also having an universal and absolutely complete gun registry which must include every gun currently lawfully and unlawfully in private hands. Both logic and the experience of every registry, everywhere they exist, shows such a registry to be a pipe-dream. Canada couldn’t do it, Australia couldn’t do it, the UK couldn’t do it, etc, etc.

    To think the US, with a low estimate of 300 million plus firearms -lawfully- in private hands, could pull it off when a majority of the population would refuse to comply on Constitutional grounds is an asinine fantasy.

      1. Why would that be necessary? They caught these crimes after the guns were recovered in the usual way by local law enforcement after the usual traces were run by local law enforcement that are run on almost every recovered gun. The ATF then sent the usual agents to do the usual follow-up.

        “Adding more agents” would do nothing to impact any part of that usual process, it is purely driven by local police recoveries.

          1. How, exactly, would “more ATF agents” help? The burden is on those recommending restrictions or government expansion to justify them.

            Think logically and systematically…

            It took 15 years because it took 15 years, the only way the agents could possibly know to audit his books to find the illegal sales was -after- the guns were recovered by local law enforcement in the course of normal investigations of other crimes and them performing traces.

            Hiring more ATF agents would merely result in more ATF agents standing around waiting for criminals to get busted by local cops so their guns could be recovered. We know from ATF data the average “time to crime” is about a decade, so 15 years is about normal. No additional numbers of ATF agents would increase the speed of criminals using them in local offenses and getting them recovered to start the trace process.

          2. If more agents were available to do audits more regularly, there would be very few FFLs abusing the privilege.

            Selling guns is not like selling shoes. It should be held to a high standard and regarded as a skilled profession.

          3. Gabby, audits do not work that way.

            When agents do audits they (essentially) compare the inventory with the bound book. If every serial number that is on the inventory has a corresponding entry in the bound book and a 4473 to match then there is nothing to “catch.”

            In the case you cited the FFL was going back and writing the serial numbers of the guns he sold “off the books” onto old 4473’s and into his book. You could put agents into the store until the Fire Marshall started issuing citations and they wouldn’t catch anything as all the numbers would add up.

            The only way to detect it is to have a gun -trace- come up to an individual who says they never bought that gun.

            Many stores will now draw a line through all the blank lines on each 4473 as it is filled out to prevent that (that’s how I learned of the local case, the clerk volunteered why he was doing it) but, again, unless the ATF has an agent in every store all day every day there is no way to prevent an FFL wishing to do the same scam from doing so.

            There will never be enough agents to do more than spot checks and given the low number of incidents and even lower statistically insignificant incidences of actual harm to individuals, there is no rational justification to spend the time and money to even try.

  5. I don’t understand your reasoning when it comes to retail sales. Besides the burdensome regulations and licensing, firearms retailers sell things the same as everyone else. You give them the money, they give you the merchandise. What puts guns on so high a pedestal that you think sales of such would be a privilege? None if the laws on the books truely prevent crime. They are there solely for the procecution of criminals.

  6. If more agents were available to do audits more regularly, there would be very few FFLs abusing the privilege.

    Uh, no. Earlier this year, I traded a Ruger 1911 for an HK USP 45 Compact from a private party on ArmsList without a background check, which was still legal in Colorado at the time (before July 01, 2013).

    When I got home, noticed that the serial numbers had been removed from the gun (something I should have checked at the time, lesson learned). I contacted the BATFE, and — long story short — they were not interested in investigating this.

    There’s only two reasons I can think of why a serial number would be removed from a gun:

    (1) the gun was stolen, and/or
    (2) the gun was used in a crime.

    A friend of mine who owns a small gun shop told this story to his cop-customers. Their response was that BATFE agents are basically lazy, and more interested in enforcing paperwork compliance checks on licensed dealers than going after real (and potentially violent) criminals.

    1. Holy crap dude! I’d find a way to shed yourself of that gun ASAP. I might be wrong, but if an “interested” ATF agent catches you with it, it’s still illegal. Or at least have some form of documentation from the ATF that says it’s okay.

      1. have some form of documentation from the ATF that says it’s okay.

        I did get that documentation. When I wrote “long story short”, there’s a lot of details I left out for the sake of brevity.

  7. yes is was wrong to not follow the law.(period) These kind of stories do not help our cause at all. Do it right. We know many facets of our government are
    corrupted , but two wrongs do not make a right.

  8. Pre federal government slide into absolute corrupt ruin and disregard for freedom and justice- I would have said follow the letter of the law and campaign to tune poor law into better law while following law. Now – I can’t say I care to uphold or endorse any law relevant to firearms. I have no doubt that any record of any type that ties a citizen to a firearm will be used against that citizen in the very near future.

    This government and it’s handlers have finally reached the point where they can play their hand and the lawful citizens can no longer “tune up” bad law.

    The only thing for lawful citizens to decide is at what imminent point in time it will be to say enough or whether to succumb to a tyrannical government.

    1. Except this guy put innocent gun purchasers at legal risk by putting his criminally sold guns into their names without their knowledge. There is no possible moral “rightness” in his actions.

      Further, not abiding by the law as a private individual as a civil protest is one thing. Choosing to get a license, freely enter into a contract on known terms, and then deliberately -break- that contract freely entered into – not for moral reasons as some sort of civil protest – but rather to enrich oneself is -not- defensible under any philosophical take on gun rights that includes any moral compass whatsoever.

  9. Actually there is a gun show loophole, it does exist; it’s called private sales. That’s the loophole all the anti-gun folks are referring to. Illegal activity by a licensed FFL is not a loophole, it’s criminal activity, plain & simple.

      1. Sure there are laws that say many things are against the law; people break them everyday, because they can. Why are they able to? Loop holes in the ability to enforce laws. Of course, no matter how many laws you make, there will always be the opportunity to bypass the law if one chooses to do so.

  10. Alas, people take the “gun show loophole” to mean that every gun purchased at a gun show was bought with no background check. The media does little to help dissuade the notion that gun shows are some sort of bazaar of unlicensed private sellers giving guns to guys with prison tats…

  11. OK, he broke a “book keeping law”. Keeping books was and always will be a method to make collecting of taxes more efficient for the revenue collectors. Sure, your business will probably run better if you keep good books. But the government is not interested in how well your company runs; only that the government collects its “fair share” of the revenue. The government cannot assign a tax collector to work at every point of sale; so it requires accurate book keeping to the point of felony incarceration for failure.

    All book keeping laws are about tax collection. This FFL failed to collect the proper tax revenue for the government. The other details are just irrelevant details

    1. No.

      Full Stop.

      He broke a “book keeping law” that he freely agreed to abide by as a condition of getting his license (which no one forced him to do) merely to enrich himself. That is dishonorable.

      In doing so he put other individuals, who entrusted him with their personal information, at legal risk by concealing his fraud using their identities. There is no honor or morality in that either.

      This crime cannot be justified by any intelligent, morally competent being as acceptable. It was selfish greed, pure and simple. There was no “civil protest” or “honorable resistance to tyranny” involved.

  12. Working in a gun shop I’m not sure if I’d blow the whistle. I wouldn’t work there anymore but the ATF seems to want honest people more then criminals. I’d be afraid that they would hand out an arrest warrant for all involved including me as the whistle blower. And that would suck!

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