O.C. Man in Hate Plot Had Gun Dealer Permit : Probe: Josh Daniel Lee, 23, obtained a weapons license about two years ago. Officials say he supplied arms to skinheads.

The 23-year-old Orange County man who supplied machine guns and other high-powered firearms to white supremacists accused of plotting attacks on blacks and Jews in Southern California was a licensed gun dealer who operated out of his parents’ home in a peaceful Costa Mesa neighborhood.

Federal records show that Josh Daniel Lee, one of the eight suspects arrested Thursday, has held a federal license to deal in firearms since he turned 21 and was employed at the Firing Line indoor range, situated in a quiet industrial park in Huntington Beach.

Agents said he supplied some weapons to the Fourth Reich Skinheads, but other guns that were seized, including dozens of machine guns, revolvers, sawed-off shotguns and pipe bombs, did not appear to come from Lee.

Federal agents are trying to trace those weapons--which may lead to other suspects--as they continue to investigate the violent workings of a shadowy band of skinheads in Southern California accused of plotting to start a race war.

“This thing is still moving very quickly,” said one person familiar with the investigation. “There could still be more people pulled in” and arrested.

Meanwhile, records show that Lee’s gun license--issued by the Bureau of Alcohol, Tobacco and Firearms--allowed him to buy guns through the mail and sell them to others, but it did not permit him to sell machine guns or illegal weapons.

Authorities said Lee sold a machine gun and four other guns to an undercover FBI agent who had infiltrated the Fourth Reich Skinheads, who were allegedly plotting to kill Rodney G. King and blow up the First African Methodist Episcopal Church in Los Angeles.

“If this case shows us anything,” said George Rodriguez, special agent in charge of the BATF office in Los Angeles, “it’s the relative ease with which groups like this can come up with weaponry like that.”

BATF officials in Washington said they had little choice in issuing Lee a license to sell guns.

“Political philosophy has nothing to do with it,” agency spokesman Jack Killorin said. “The way the law is written, unless you’re a convicted felon, you get a license. . . . If, in fact, you want to put down on your application ‘American Nazi Gun Shop,’ we have no ability under the law to shut you down.”

News of the investigation became public Thursday, when officials announced that they were filing charges against six adults and two juveniles accused of violating federal weapons laws. One of the adults, Christopher David Fisher, 20, of Long Beach, also was accused of leading the Fourth Reich Skinheads in plots to kill King and blow up the First AME Church. The two juveniles also are reputed members of the Fourth Reich Skinheads, but the other five suspects are not.

In other developments Friday:

* The Los Angeles County district attorney’s office filed a single felony count against one of the two minors arrested this week in connection with the federal investigation of alleged white supremacist groups. The 17-year-old Long Beach resident, who was not identified because of his age, was charged with the sale and transportation of a pipe bomb in addition to the charges lodged against him Thursday in federal court.

* Federal prosecutors were weighing the evidence against the various suspects and, sources said, they were considering possible civil rights charges against Fisher and any other suspects tied to the plot to bomb the First AME Church. Those sources added, however, that the civil rights laws may be difficult to apply in this case.

* Some of those who were allegedly mentioned as targets of the skinheads protested that they had never been warned by authorities. FBI agents responded by saying that only King and leaders of the First AME Church were thought to be in real danger, and that they were warned.

The FBI had investigated the suspected white supremacists for 18 months, but abruptly ended the covert portion of the inquiry this week because agents feared that they could no longer keep the activities of the Fourth Reich Skinheads in check.

During the last few days, the group had grown increasingly violent in its rhetoric and had begun pushing forward with its plans to launch attacks, investigators said Friday. On Wednesday night, members of the skinhead group allegedly gathered and began preparing mail bombs that Marc R. Greenberg, the lead prosecutor in the case, said were going to be sent to members of the Orange County Jewish community.

Those bombs were going to be sent imminently, investigators added. The raids were launched Thursday morning.

When investigators decided to close the investigation of Fisher and the Fourth Reich Skinhead group, they also ended their other white supremacist investigations because they feared publicity would expose their undercover operatives, officials said.

Although that prematurely concluded an 18-month undercover investigation, agents collected a large inventory of weapons during that time. Friday, as they catalogued that arsenal, agents for the first time disclosed exactly what they had seized.

The eight suspects, agents said Friday, had stockpiled 34 firearms or explosives including nearly two dozen machine guns as well as rifles, sawed-off shotguns, revolvers, bayonets, four pipe bombs and a Molotov cocktail.

The bulk of the arsenal consisted of 21 Sten machine guns. First made in World War II for use by British troops, the Sten has a reputation for being simple, reliable--and lethal. It is capable of firing 550 rounds a minute.

Agents on Friday would not discuss specifically how or where the suspects got their weapons, other than to note that some of the guns seized during the investigation were still being traced.

Gun control advocates, meanwhile, used the case to criticize federal firearms regulations.

“It’s outrageous that the government licenses Nazis as firearms dealers,” said Jeff Muchnick, legislative director for the Coalition to Stop Gun Violence, based in Washington. “Individuals who have the stated purpose of destroying the U.S. government and killing people on basis of race should not be allowed to engage in the business of firearms dealing.”

As investigators searched for new suspects, federal prosecutors worked to distill the charges that they hope to bring against the suspects in custody. Most of those suspects are charged with breaking federal weapons laws but Fisher is also accused of plotting to blow up the church.

Fisher allegedly told an undercover FBI agent that he led the Fourth Reich Skinheads, and sources familiar with the investigation said prosecutors are considering bringing civil rights charges against members of that group.

Conceivably, Fisher and other members of the Fourth Reich Skinheads could be charged with conspiring to violate the civil rights of the Rev. Cecil Murray, the pastor of the First AME Church, as well as the rights of his parishioners. According to a federal affidavit, Fisher and the Fourth Reich Skinheads had begun amassing weapons for an attack on the church and were planning to spray the congregation with machine-gun fire.

The civil rights statutes contain stiff sentences, but applying them in this case could prove difficult, sources said. That is because prosecutors would have to prove that the defendants intentionally sought to violate a constitutionally protected right.

In the case of Murray and his parishioners, that would probably be the right to the free exercise of their religion, but the statute that defines violations of religious institutions is narrowly defined and difficult to prosecute.

In addition to plotting against King and the First AME Church, members of the Fourth Reich Skinheads also allegedly discussed killing other prominent African-Americans. On Friday, after learning that they had been mentioned as possible targets by the group, some of those people expressed surprise that federal officials did not warn them that they might be in danger.

Activist Al Sharpton called a news conference to complain that he was not warned, and rapper Eazy-E also issued a press release in protest.

“Call it what you want,” the statement said. “Again, the FBI has shown their true feelings. We . . . demand an explanation from the FBI of why they did not take precautions to warn a rapper.”

Charlie J. Parsons, the special agent in charge of the FBI’s Los Angeles Field Division, responded by saying that agents did not believe anyone other than King and leaders of the First AME Church were in danger.

“FRS (Fourth Reich Skinhead) members narrowed their possible targets and began to seriously plan steps to carry out terrorist acts against specific individuals,” Parsons said in a written statement. “These individuals, including Mr. Rodney King and the Rev. Cecil Murray, were notified of the FRS plots and informed of the FBI’s awareness of the situation. Other individuals mentioned in passing by the FRS but not targeted in any assassination / terrorist plots were not notified as their safety was not endangered.”

Sources close to the investigation added that federal agents did not want to notify anyone who was not genuinely at risk because they did not want news of their investigation to leak prematurely. An FBI agent and two informants were operating undercover, and their lives could have been endangered if the subjects of the investigation had learned of the probe.

Amid the furor over their arrests, most of the suspects remained in custody, but details of their lives were revealed in interviews with those who know them. Some of the suspects were portrayed as violent racists, while friends described themselves as being shocked that others would ever be tied into white supremacy groups.

Jonathan Bernstein, regional director of the Anti-Defamation League, said his organization was familiar with all the suspects who were publicly identified.

Fisher’s actions are under the greatest scrutiny because he is the only adult accused in connection with the plot to bomb the First AME Church and kill its pastor. But to those who know him, Fisher is the epitome of the All-American boy.

To his neighbors, he was the friendly kid next door who went to church on Sundays and shot hoops outside his home with friends of all races. He practically grew up in the Boy Scouts, where he reached the highest honor and became an Eagle Scout, they said.

To his boss at a Subway sandwich shop, Fisher was the courteous, prompt and responsible employee who willingly volunteered to fill someone else’s shift. While to his co-workers, an ethnically diverse group, he was the guy who liked to whistle as he worked.

Tom Metzger, founder of the White Aryan Movement, vehemently disassociated himself from the group of skinheads that Fisher allegedly led and said does not remember ever meeting Fisher.

Moreover, Metzger said he did not remember meeting any of defendants in the case except Geremy C. Von Rineman and Jill Scarborough, both 22, of Fullerton. In 1989, Rineman and two other men were shot on a Van Nuys street after running from one black and two Latino youths at a market. Police said all three men were skinheads.

An issue of the White Aryan Resistance group’s newsletter during that time notes that Rineman was pursuing legal action in the case and needed assistance from “all racialists.”

A note from Scarborough, listed in the newsletter as his fiancee, explains that Rineman was shot by a “mud gang member”--common white supremacist slang for any minority--and asked for financial support for possible legal action.

Unlike Scarborough and Rineman, the associates of Josh Lee, the licensed gun dealer, said he did not harbor white supremacy notions. Lee graduated from Mater Dei High School in Santa Ana. His father is Chinese-American, and his mother is Hawaiian, according to Lee’s former boss.

“How does that make him a white supremacist?” asked Ron Flett, the manager of a Huntington Beach firing range. “Looks like some people got their story crossed. . . . Unless he made a lot of changes in the last year, I cannot see him as a skinhead.”

Although most of those arrested Thursday were in their early 20s or younger, two suspects, Christian Gilbert Tony Nadal, and his wife, Doris Nadal, were adult professionals--he a flight engineer, and she is a real estate saleswoman.

The Nadals live in a middle-class neighborhood, where they own a home valued at $230,000. Their combined income, according to court documents, comes to about $8,000 a month.

But neighbors recounted seeing pictures of Adolf Hitler and Nazi flags in the couple’s home, and agents said Chris Nadal boasted that he routinely jotted swastikas on paper money--an undertaking begun when he once received a $1 bill with a Star of David drawn on it.

He also owns a plane that sports a swastika on the tail.

Glen Porter, airport manager at the Chino Airport, said the swastika had been on the aircraft’s tail for at least six months, but had not really stirred much conversation because of a predominance of some 125 World War II era historic airplanes at the airport.

“He was a reasonable gent,” Porter said of Christian Nadal. “Always polite.”