U.S. v. Scherer

• Decision Date: 31 October 1975
• Docket Number: No. 74-2051,74-2051
• Citation: 523 F.2d 371
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Anthony SCHERER, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 371

523 F.2d 371

33 A.L.R.Fed. 812

UNITED STATES of America, Plaintiff-Appellee, v. Anthony SCHERER, Defendant-Appellant.

No. 74-2051.

United States Court of Appeals Seventh Circuit.

Argued June 12, 1975.

Decided Sept. 4, 1975.

Rehearing Denied Oct. 31, 1975.

Julius L. Sherwin, Marvin A. Brusman, Chicago, Ill., for defendant-appellant.

Samuel K. Skinner, U. S. Atty., Gary L. Starkman, William J. Cook, Asst. U. S. Attys., Chicago, Ill., for plaintiff-appellee.

Before CLARK, Associate Justice (Retired), ^* and SWYGERT and CUMMINGS, Circuit Judges.

SWYGERT, Circuit Judge.

Appellant Anthony Scherer was convicted of violating the firearms registration and recording requirements imposed on all federally licensed firearms dealers by 18 U.S.C. §§ 922(m), 923(g) ¹ and regulations promulgated pursuant thereto. His conviction was based upon six counts of failing to maintain a Firearms Acquisition and Disposition Record in compliance with 26 C.F.R. § 178.125, ² and three counts of failing to complete Treasury Form 4473 as required by 26 C.F.R. § 178.124. ³ Scherer has appealed from this judgment, urging reversal on numerous grounds. Our study of the issues presented convinces us that the ruling of the district court should be affirmed.

The appellant is a federally licensed firearms dealer operating under the firm name of Precision Shooter Supply, Box 197, Route 1, Hampshire, Illinois. He maintains an office connected to a barn on his property from which he is licensed to conduct his firearm business. Between February and August 1972, Government informant George Rivard made four "controlled buys" of firearms from Anthony Scherer. None of these transactions occurred at Scherer's formal business office, nor were the customary 4473 forms completed in order to record the identity of the weapons sold.

Approximately one month after the final sale to Rivard, special agents of the Bureau of Alcohol, Tobacco and Firearms (ATF) obtained a search warrant for Scherer's property. The warrant was executed on October 4, 1972. Over seventy firearms were seized by the Government, along with Scherer's Firearms Acquisition and Disposition Record books. These items served as the basis for Scherer's arrest, indictment, and later conviction. In addition, counts one and two of the indictment charged Scherer with failing to record the sale of three firearms to dealer Joseph Schroeder in November 1971 and April 1972. Defendant was convicted of these charges as well.

I

The heart of Scherer's initial argument centers around his interpretation of the 1968 Gun Control Act. Specifically, Scherer contends that he was not required to maintain records regarding the acquisition or sale of his personal firearms, and argues that the Government is estopped from asserting any duty to the contrary. Reliance is primarily placed upon Industry Circular No. 72-30, released by the Treasury Department in 1972, which specifies guidelines for the identification of personal firearms located on the business premises of licensed dealers:

A presumption exists that all firearms on a business premise are for sale and accordingly must be entered in the record required to be maintained under the law and regulations. However, it is recognized that some dealers may have personal firearms on their business premises for the purpose of display or decoration and not for sale. Firearms dealers who have such personal firearms on licensed premises should not intermingle such firearms with firearms held for sale. Such firearms should be segregated from firearms held for sale and appropriately identified (for example, by attaching a tag) as being "not for sale." Personal firearms on licensed premises which are segregated from firearms held for sale and which are appropriately identified as not being for sale need not be entered in the dealer's records.

According to Scherer's construction of the above guidelines, personal firearms located apart from the business premises need not be tagged or entered in a dealer's records. Since Scherer claims that the weapons seized were a part of his private collection and were stored in his home rather than his business office, he argues that he was exempt from recording their sale or disposition.

The necessary implication of these guidelines indicates that the act of selling a firearm, not its location or the arbitrary distinction between "personal" and "business" transactions, brings a weapon and the parties involved within the purview of federal control. In this regard the terms of 18 U.S.C. § 923(g) and the executing provisions of 26 C.F.R. §§ 178.124, 178.125 are clear. The statutes and regulations are comprehensive in their coverage, and refer to "any firearm" and "each disposition." They were designed to keep a constant record of the transfer and location of firearms in order to reduce the indiscriminate flow of such weapons and the crime that inevitably follows in their wake. ⁴ A licensed dealer must, therefore, comply with the recording provisions of 26 C.F.R. §§ 178.124 and 178.125 each time he disposes of a firearm. In the instant case it is immaterial whether the weapons sold were originally acquired for Scherer's personal use or for business purposes. They became a part of his business inventory the moment they were placed on the market for resale.

II

Scherer also alleges that he is exempt from the recording provisions of the Gun Control Act of 1968 because the sales listed in the indictment occurred at locations other than his licensed business premises. ⁵ Since he was not licensed to carry on a gun trade at any of the locations mentioned, he argues that he was not a federally licensed firearms dealer as to those places and thus not subject to the requirements of 26 C.F.R. §§ 178.124 and 178.125.

Initially we cannot agree that all of the gun sales did not occur on Scherer's business premises. The house where the bulk of these transactions took place was a mere eighty feet from the defendant's office and located on the same property. Scherer's status as a licensed firearms dealer and the responsibilities that attend to that title do not end with a mere step outside the door. Moreover, the language of 26 C.F.R §§ 178.124 and 178.125 is devoid of any reference to location. It requires that Each disposition of a firearm be recorded and kept on file at the dealer's business office, and makes no exception for transactions conducted elsewhere. Although Scherer has not obtained a license for each place at which he does business as required by 26 C.F.R. § 178.41(b), this does not absolve him of the responsibility to record these transactions. A licensed firearms dealer may not avoid this duty simply by changing his location. Scherer, therefore, was required to record the sales noted in the indictment in his Firearms Acquisition Record book within seven days after the disposition of the firearms and to complete Form 4473.

III

The defendant next contends that such disclosures would violate his Fifth Amendment privilege against self-incrimination. Specifically, Scherer's contention rests on two grounds: first, the requirement that he keep records of business transactions which he was not licensed to conduct would disclose violations of 18 U.S.C. § 922(a)(1) and the regulations promulgated thereunder, and second, the requirement that he complete Form 4473 to record the disposition of a firearm to a nonlicensee would disclose his failure to obtain George Rivard's Firearm Owner's Identification Card number as required by Chapter 38, § 83-3(a), (b) of the Illinois Revised Statutes.

An examination of Scherer's claims shows them to be without merit. The Supreme Court's decision in Marchetti v. United States, 390 U.S. 39, 53, 88 S.Ct. 697, 705, 19 L.Ed.2d 889 (1968), makes it clear that "(t)he central standard for the privilege's application has been whether the claimant is confronted by substantial and 'real,' and not merely trifling or imaginary, hazards of incrimination." No such "real" or substantial hazards are created here. The objectionable feature of the statutes found in Marchetti and the related cases of Grosso v. United States, 390 U.S. 62, 88 S.Ct. 709, 19 L.Ed.2d 906 (1968), and Haynes v. United States, 390 U.S. 85, 88 S.Ct. 722, 19 L.Ed.2d 923 (1968), was that the act of registration itself constituted an Ipso facto confession of criminality.

By contrast, the mere act of recording the sales of firearms or engaging in their transfer does not automatically subject a licensed firearms dealer to criminal penalties. He is not, therefore, subject to the incriminating straight-jacket of alternatives created in the cases above. Nor are 26 C.F.R. §§ 178.124 and 178.125 principally directed at persons who have failed to comply with other firearms registration provisions and thus "inherently suspect of criminal activities" as was the case in Haynes, 390 U.S. at 96, 88 S.Ct. at 730. Rather, we find the holding of Shapiro v. United States, 335 U.S. 1, 68 S.Ct. 1375, 92 L.Ed. 1787 (1948), controlling in the instant situation. The statutes cited regulate an essentially non-criminal activity the disposition of firearms and fall within the "required records" standards established by Shapiro and further enunciated in Grosso v. United States, 390 U.S. at 67-68, 88 S.Ct. 722. As noted earlier, the recording procedures are a part of the congressional policy to regulate the sale of firearms, and are required of all federally licensed firearms dealers. Form 4473 and the entries noted in Scherer's Firearms Acquisition Record book have assumed the status of "public documents" by the fact that 18 U.S.C. § 923(g) requires them to be continuously available for inspection by Government officials during business hours. We therefore hold that Scherer's failure to comply with 18 U.S.C. § 923(g) and the regulations promulgated thereunder was not protected by the Fifth Amendment.

IV

Scherer also contends that the trial court erred in admitting...