Gun dealers often stay in business with new licenses after ATF shuts them down

By David S. Fallis
Washington Post Staff Writer
Tuesday, December 14, 2010; 12:27 AM

About a hundred times a year, regulators strip gun dealers of their licenses for violations of federal law, an extreme step taken only when repeated infractions are deemed a threat to public safety.

But a year-long Washington Post investigation documented about 60 cases since 2003 in which the businesses stayed open, often re-licensed through relatives, employees, associates or newly formed companies.

"We'll just have to play musical licenses," the owner of the Highland Gun Barn in Michigan said when a federal inspector served him with a final notice to surrender his license.

A California sports shop had its license revoked after inspectors from the Bureau of Alcohol, Tobacco, Firearms and Explosives said the 87-year-old owner's repeated violations of gun laws showed she was unable to run a gun business. Before she forfeited her license, the woman's son obtained a permit to sell guns at the same shop. He said he would be at the shop two days a week and that his mother would "exclusively direct all day-to-day business."

A Maryland gun store that ATF said lost track of weapons and failed to do background checks was forced to surrender its license after the owner lost a court battle. Six months later, ATF issued the dealer's wife a license at his old shop in Fallston, Md.

A Georgia gun dealer had its license revoked after ATF said it could not account for hundreds of guns. The dealer's daughter and son-in-law secured their own license to keep the business going.

It is all legal.

"This is the way Congress wrote the law," said James Zammillo, who was with ATF for four decades and served as deputy assistant director of industry operations before retiring this year. "The spirit of the law is that unless the applicant is prohibited, you have to issue a license. There is no discretion."

Because of the secrecy Congress imposed on federal gun records in 2003, the details of inspection violations are typically redacted from public records unless a case ends up in court. When revocations are pursued, the problems can include sales done without background checks, improperly completed forms or missing weapons, one of ATF's chief concerns.

Revoking a gun dealer's license is ATF's most aggressive enforcement action short of criminal prosecution. It is a rare last resort for less than one-quarter of 1 percent of dealers annually. It often follows years of warnings for serious violations and sometimes leads to years of appeals. Although gun dealers complain that ATF harps on clerical errors, the agency says it revokes licenses only when dealers continually fail to comply with gun laws and the violations threaten public safety.

The Post investigation is the first to document the extent of the re-licensing practice, in which about 7 percent of the gun merchants that had licenses revoked continued to operate.

Several merchants involved in the re-licensings told The Post it was the only way to keep their family businesses going.

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