US v. Hunter, 92-CR-80769-DT

• Decision Date: 24 January 1994
• Docket Number: No. 92-CR-80769-DT,92-CR-80770-DT.,92-CR-80769-DT
• Citation: 843 F. Supp. 235
• Parties: UNITED STATES of America, Plaintiff, v. Daniel HUNTER, D. Bruce Clark, Kent Lomont, Defendants. UNITED STATES of America, Plaintiff, v. Daniel HUNTER, John Stemple, Robert Landies, George Dodson, Defendants.
• Court: U.S. District Court — Western District of Michigan

843 F. Supp. 235

UNITED STATES of America, Plaintiff, v. Daniel HUNTER, D. Bruce Clark, Kent Lomont, Defendants.

UNITED STATES of America, Plaintiff, v. Daniel HUNTER, John Stemple, Robert Landies, George Dodson, Defendants.

Nos. 92-CR-80769-DT, 92-CR-80770-DT.

United States District Court, E.D. Michigan, S.D.

January 24, 1994.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Asst. U.S. Atty., Diane Donohue, Detroit, MI, for plaintiff.

Richard O'Neill, Federal Defenders Office, Detroit, MI, for Hunter.

Stuart Benis, Colombus, OH, for Clark.

Steven Halbrook, Fairfax, VA, for Lomont.

James Jeffries, Greensboro, NC, for Landies.

Ed Wishnow, Southfield, MI, for Dodson.

OPINION AND ORDER

ROSEN, District Judge.

I. INTRODUCTION

In these consolidated cases, the United States has charged Daniel Hunter, D. Bruce Clark, Kent Lomont, John Stemple, Robert Landies, and George Dodson with conspiracy to violate federal statutes regulating the manufacture, transfer, and possession of machineguns. Defendants are gun manufacturers and dealers from Michigan, Ohio and Indiana. They have raised a number of pretrial motions on which the Court heard oral argument on September 22, 1993. After careful review of the issues raised, the Court is now prepared to rule on these motions. This Memorandum Opinion and Order sets forth that ruling.

II. FACTUAL BACKGROUND

A. PROLOGUE.

Before 1986, any federally licensed gun manufacturer or dealer could make and transfer a machinegun as long as he followed the procedures of the National Firearms Act ("NFA"), I.R.C. §§ 5801-5872, and the Gun Control Act ("GCA"), 18 U.S.C. §§ 921-930. Passed in 1934, the NFA is a taxing statute that generated revenue for the Government by mandating the registration and taxation of certain types of firearms (machineguns, silencers, sawed-off shotguns, etc.). The GCA, for its part, regulates through criminal penalties the interstate flow of all firearms. The Department of Treasury's Bureau for Alcohol, Tobacco and Firearms ("ATF") is the federal agency in charge of enforcing these statutes.

In 1986, Congress enacted 18 U.S.C. § 922(o) as part of a series of GCA amendments known as the Firearm Owners' Protection Act (FOPA). Section 922(o) reads:

(1) Except as provided in paragraph (2), it shall be unlawful for any person to transfer or possess a machinegun.

(2) This subsection does not apply with respect to —

(A) a transfer to or by, or possession by or under the authority of, the United States or any department or agency thereof or a State, or a department, agency or political subdivision thereof; or

(B) any lawful transfer or lawful possession of a machinegun that was lawfully possessed before the date this subsection takes effect.

Daniel Hunter, one of the Defendants in this case, registered approximately 1700 machineguns just prior to § 922(o)'s effective date of May 19, 1986. Both the U.S. Attorney and ATF acknowledge that he should not have been allowed to do so. In fact, an ATF agent looked at his inventory and recommended to ATF that it deny the registrations. ATF overlooked this request and approved the 1700 machinegun registrations.

The essence of the indictments is that Hunter's 1700 machinegun registrations were used to provide a paper cover for the illegal transfer and possession of machineguns. A more specific review of the counts of the indictments is set forth below.

B. NO. 92-80769. UNITED STATES v. HUNTER, CLARK & LOMONT.

1. Count I: Conspiracy To Violate Federal Firearm Laws Under 18 U.S.C. § 371 (Hunter, Clark, Lomont).¹

This count alleges that on May 5, 1986, Daniel Hunter, a federally licensed firearms dealer in the Eastern District of Michigan d/b/a Broadhead Armory, Inc., signed and filed seven ATF Form 2s (Notice of Firearms Manufactured or Imported) showing the manufacture of 75 .45 caliber machineguns, bearing serial numbers HM 001-HM 075. Delwin Wirth, a federally licensed firearms dealer in Wisconsin, approached Defendant Kent Lomont, a federally licensed firearms manufacturer in Indiana d/b/a Lomont's Precision Bullets, in April, 1987, at the Nob Creek Machinegun Shoot in Kentucky. Wirth told Lomont that he wanted registrations for four machinegun receivers which Wirth had in his possession. Lomont directed Wirth to Defendant Daniel Hunter. Wirth spoke with Hunter that same day about the transaction. Wirth later arranged to have Gary Rasmussen listed as the transferee of the receivers; Rasmussen is a federally licensed firearms dealer in Wisconsin.

On August 28, 1987, Hunter submitted four ATF Form 3s (Application for Tax-Exempt Transfer of Firearm & Registration to Special (Occupational) Taxpayer) to ATF requesting permission to transfer four machinegun receivers bearing serial numbers HM 066-HM 069 to Rasmussen. In October, 1987, Hunter gave to Wirth the approved Form 3s. Wirth met with Defendant D. Bruce Clark, a federally licensed firearms dealer (and after July, 1989, a licensed manufacturer) in Ohio d/b/a Fort Howard, in October, 1987. Wirth arranged for Clark to manufacture four machineguns with Wirth's receivers. Wirth and Clark agreed that the machineguns would bear Hunter's serial numbers. Hunter made entries in his books on October 4, 11 and 13, 1987, showing the transfer of four machineguns with serial numbers HM 066-HM 069 to Rasmussen; Rasmussen made entries in his federally mandated bound book on October 16 showing the receipt of four machineguns from Hunter with those same serial numbers.

On November 19, 1987, Rasmussen signed and filed ATF Form 3s requesting permission to transfer four machineguns with serial numbers HM 066-HM 069 to Clark. After these were approved, Wirth shipped the receivers to Clark on December 3, 1987. On December 12, Clark made an entry in his bound book showing the receipt of four machineguns manufactured at the Broadhead Armory. According to the indictment, despite Hunter and Rasmussen's records, only Wirth and Clark ever had possession of the machinegun receivers. On March 8, 1989, Clark still had the four receivers with serial numbers HM 066-HM 069 in his possession. The indictment alleges that all of these acts constituted a conspiracy to violate 18 U.S.C. § 922(o), and also 18 U.S.C. §§ 923(g)(1)(A)², 924(a)(1)(D)³ and 924(a)(2).⁴

2. Count II: Possession of Machineguns in Violation of 18 U.S.C. § 922(o) (Clark).

On or about March 8, 1989, Clark possessed four machinegun receivers with serial numbers HM 066-HM 069 in violation of 18 U.S.C. § 922(o).

3. Count III: False or Fraudulent Statements in Violation of 18 U.S.C. § 1001⁵ (Hunter).

On or about August 28, 1987, Hunter filed false ATF Form 3s requesting permission to transfer machinegun receivers to Rasmussen.

C. NO. 92-80770, UNITED STATES v. HUNTER, STEMPLE, LANDIES AND DODSON.

1. Count I: Conspiracy To Violate Federal Firearms Laws In Violation Of 18 U.S.C. § 371.

Prior to 1986, George Dodson, who was neither a federally licensed firearms manufacturer or dealer, arranged for the manufacture and/or acquisition of M-2, M-10, and M-11 .30 caliber machinegun conversion kits. Before May, 1986, Dodson agreed to transfer the conversion kits to Daniel Hunter, a licensed firearm manufacturer in the Eastern District of Michigan d/b/a Broadhead Armory, Inc. Hunter, in turn, filed registration forms with ATF on May 7, 1986, showing that the Broadhead Armory manufactured the conversion kits.⁶

On May 28, 1987, Hunter signed and forwarded twenty ATF Form 3s requesting permission to transfer twenty M-1 and M-2 .30 caliber carbine conversion kits with serial numbers BAV 082-BAV 101 to John Stemple, a federally licensed firearms manufacturer in Ohio. On August 31, 1987, Stemple made an entry in his bound book showing receipt of the twenty conversion kits listed above from Hunter, even though he allegedly received the weapons directly from Dodson. On September 2, 1987, Stemple filed and forwarded ATF Form 3s requesting permission to transfer the above twenty conversion kits to Robert Landies, a federally licensed firearms manufacturer in Ohio d/b/a Collector's Corner. The Form 3s showed the conversion kits as being .50 caliber machineguns. On September 18, 1987, Landies made an entry in his bound book showing receipt of twenty ".50 caliber full autos."

On December 7, 1989, Landies still had in his possession the twenty .30 caliber conversion kits with serial numbers BAV 082-BAV 101. On December 14, 1987, Hunter had in his possession 328 conversion kits manufactured by Dodson but registered as being manufactured by himself. Similarly, on March 8, 1988, Stemple had in his possession some 75 conversion kits manufactured by Dodson but registered as being manufactured by Hunter. On July 10, 1989, Hunter had in his possession 299 conversion kits he received from Dodson but listed as being manufactured by himself. And, on March 21, 1990, Stemple had in his possession 87 conversion kits which he received from Dodson, but which were registered as being manufactured by Hunter.

The indictment alleges that all these acts violated 18 U.S.C. § 371. In particular, the indictment alleges that the Defendants knowingly conspired to violate 18 U.S.C. §§ 922(a)(1)(A)⁷, 922(o), 923(g)(1)(A), 924(a)(1)(D), and 924(a)(2).

2. Count II: Possession Of Machineguns In Violation Of 18 U.S.C. § 922(o) (Landies).

On or about December 7, 1989, Landies knowingly possessed twenty machinegun conversion kits with serial numbers BAV 082-BAV 101 in violation of § 922(o).

3. Count III: Possession Of Machineguns In Violation Of 18 U.S.C. § 922(o) (Hunter).

On or about December 14, 1987, Hunter knowingly possessed 328 machinegun conversion kits in violation of § 922(o).

4. Count IV: Possession Of Machineguns In Violation Of 18 U.S.C. § 922(o) (Stemple).

On or about March 8, 1988, Stemple knowingly possessed 75 machinegun conversion kits in violation of § 922(o).

5. Count V: Possession Of Machineguns In Violation Of 18 U.S.C. § 922(o) (Hunter).

On...