Corrupt Dealers Expose Weakness in Gun Laws

Riverside police officer Mike Pelissero survived his close call with a weapon sold illegally by B and E Guns. A drug suspect fired at him and missed--then the gun jammed.

At least two homicide victims were less fortunate, killed by guns that reached the street through B and E of Cypress, which operated for years despite repeated violations of federal law. The gun merchant, formerly one of the state’s highest-volume dealers, had illegally falsified records to conceal transfers of thousands of firearms, according to court documents and records obtained by The Times under the Freedom of Information Act.

The B and E case and others like it show how unscrupulous dealers, with the imprimatur of a federal firearms license, can be enablers of gun violence on a large scale. Such dealers can be difficult to put out of business or to prosecute, and when convicted they can expect far more lenient treatment than the crooks who buy their wares.

Gun-rights groups blame such illegal gun dealing on lax enforcement of existing laws. But legal experts say the federal Bureau of Alcohol, Tobacco and Firearms and federal prosecutors have been hamstrung by limited manpower, by loopholes in the gun laws and by federal sentencing guidelines that punish convicted felons with serious prison time simply for owning a gun but treat arms trafficking as a relatively minor offense--less serious, for example, than possessing a small amount of crack cocaine with intent to sell, or sending a child pornography image over the Internet.

“It is an anomaly of the way the federal sentencing system works,” said Bradley A. Buckles, the head of ATF.

President Clinton’s crusade for a preventive approach to gun violence has brought such infirmities into sharper focus. For the better part of 30 years, firearms enforcers have put their energies into locking up gun-toting criminals one at a time, rather than focusing on the role of illegal suppliers.

That approach stemmed, in part, from the view that guns almost invariably fell into the hands of criminals through thefts from homes and firearms stores, making the supply nearly impossible to control. In recent years, however, a wealth of gun-tracing data has highlighted the importance of direct purchases from licensed dealers--whether by straw buyers who illegally transfer guns to criminal associates, or through deliberate complicity by dealers.

Besides targeting armed thugs, “we’re trying to go after the criminal behind the criminal--the illegal gun trafficker,” said James E. Johnson, deputy undersecretary for enforcement at the U.S. Treasury Department, of which ATF is a part.

But the strategy has exposed weaknesses in oversight of the firearms trade, which were evident in the B and E case.

Julius Wachtell, a former special agent with ATF, recalled B and E as “the largest corrupt dealer case that we had ever worked in Southern California.” This was not evident from the handling of the case, however.

Although the violations were systematic and exposed by two separate ATF investigations in the 1980s and ‘90s, B and E both times was able to stay in business. And though two key figures in the scheme were eventually convicted of violating federal firearms laws, they were allowed to plea bargain their sentences to a year in prison and a year of home detention, respectively.

Dealers Got Around License Revocation

B and E was owned by Robert and Esperanza Komor, who did not respond to interview requests for this story. Their gun business first hit the radar screen in 1989 when it was run from their Lakewood home.

Federal law requires gun dealers to keep accurate records of all firearms they buy from distributors and sell to the public--a rule meant to stop sales to juveniles and crooks and to create a paper trail when a gun later turns up in a crime.

Inspectors found that B and E had falsified records to conceal who was getting its guns--and from 1986 to 1989 had transferred more than 4,000 guns without keeping any records at all. According to their findings, at least some of these guns were illegally supplied to felons, juveniles and foregin nationals.

Such offenses can be prosecuted as felonies, but no charges were filed. Instead, ATF revoked the federal firearms license of B and E’s Robert Komor. But B and E found an easy escape. By the time Robert Komor had his license revoked, his wife, Esperanza, had taken out a new license in her name to keep B and E afloat.

ATF officials said that their hands were tied because federal law gives them little discretion--stating that a firearms license shall be issued to any adult nonfelon who has not willfully violated gun laws.

Other gun dealers have taken the same approach as B and E. When Romulo A. Reclusado, operator of RNJ Guns & Ammo in Carson, was convicted a few years ago of illegally selling machine guns, his wife took out a license in her name.

Following its first run-in with ATF, B and E moved its base of operations to a Cypress strip mall. But when ATF inspectors showed up a few years later, they found the modus operandi was little changed.

Late in 1993, an inspector noted suspicious entries in B and E’s record books reflecting sales of thousands of guns to several other licensed dealers.

The putative buyers were all home or “kitchen-table” dealers--typically, hobbyists who take out a license in order to pay wholesale when buying guns for themselves or their friends. These small-fry dealers typically carry photocopies of their licenses to gun shows and firearms stores, and some of these copies B and E had obtained and saved.

According to the firm’s records, a single kitchen-table dealer, David Siperek, had purchased 1,290 guns from B and E in a few month’s time. That seemed especially odd since Siperek had moved from Southern California to Florida and was living 3,000 miles away at the time.

Even so, Siperek was unnerved when agents came to his door in April 1994. “Obviously, somebody had forged my signature on the documentation,” Siperek told The Times, but “how do I prove that it wasn’t me?”

Another licensee, Robert Guerin of La Habra, had never made a purchase from B and E, yet was shown in the records as buyer of 301 guns. Guerin found out when police showed up with questions about one of these guns, which had turned up in a drive-by shooting.

After taking handwriting samples to compare with invoice signatures, agents determined the B and E records were a sham. In reality, they found, the guns had been diverted to a suspected Riverside County trafficker and to the operator of another Orange County firearms store, Southland Guns, which then sold them to unknown persons.

Altogether, since the original inspection, B and E had created false records to hide transfers of at least 3,000 more guns and had failed to keep any records on another 5,000 to 6,000 firearms, ATF officials said.

Some of the guns were intercepted by customs officials in Australia and Japan as they were being smuggled in. Another 200 or so were seized in criminal investigations, such as those involving the attack on Pelissero and an August 1994 killing in Los Angeles’ MacArthur Park.

This time, ATF referred the case to the U.S. attorney in Los Angeles, who filed charges against Zak Komor, Robert and Esperanza’s 29-year-old son, and against Ramin Esmaeili of Southland Guns.

The scheme had involved scores of illegal transactions and false entries in record books. But prosecutors agreed to let Zak Komor plead to charges involving just 24 guns. Sentenced in 1998 to a year in federal prison, he wound up serving 10 months. He didn’t respond to interview requests. Esmaeili also pleaded guilty and was sentenced to a year of home detention.

Wachtell, the former ATF special agent who teaches criminal justice at Cal State Fullerton, was outraged by the result. “The evidence was overwhelming,” Wachtell said. “There was no need whatever to bargain with anybody.”

U.S. Atty. Alejandro N. Mayorkas, who took office after the case was resolved, said he was not familiar with the details.

However, federal sentencing guidelines do not provide for tough sentences for illegal gun suppliers except in isolated circumstances. Had Komor fought the charges and been found guilty of all counts, the maximum sentence under the guidelines would have been 33 months.

Meanwhile, B and E soldiered on--until last December, when the Komors closed the firm to launch another business.

During the six years following the second wave of violations, ATF didn’t try to revoke the company’s license. In April, when the firm was already defunct, ATF served it with a revocation notice and B and E surrendered its license.

Southern California has no monopoly on problem dealers. A particularly notorious case involved a pair of Alabama firearms stores, Traders Gun Shop and Traders Two, that contributed to violent crimes to the north and east.

Federal authorities said the stores illegally supplied more than 2,000 guns to straw buyers and unlicensed street dealers from the early to mid-1990s. At least 900 of the guns were later recovered in crime investigations in 10 states, including in at least 50 homicides, officials said.

Fifteen participants in the trafficking scheme entered guilty pleas. But in September 1998, two of the alleged ringleaders, Traders Gun Shop principals William Dollar and his sister, who pleaded innocent, went free when a federal judge dismissed all charges--ruling, among other things, that prosecutors had failed to turn over evidence that might have been helpful to the defense.

False Records Hid Transactions

John R. Thompson, a West Covina gun dealer recently sentenced to four years in prison on a variety of firearm charges, was not as fortunate. But in his meteoric career as a licensed dealer, Thompson showed how much damage a rogue operator can do.

Soon after launching his business, Verde Firearms, in 1996, Thompson began smuggling guns into Mexico. Thompson, who declined interview requests, made at least five smuggling trips, according to his indictment--once hiding guns in a vehicle he drove to Guadalajara, and other times smuggling guns onto commercial flights by using phony police credentials to badge his way around metal detectors at Los Angeles International Airport.

About the same time, Thompson created false records to hide transfers of 116 firearms to unknown buyers. Before long, at least nine of these “clean” guns were linked to crimes in the Los Angeles area, including two murders, according to papers filed by the U.S. attorney in federal court in Los Angeles.

The bogus records reflected the sale of these guns to another licensed dealer, Conrad M. La Grasta, doing business as DC Sales. La Grasta is a promoter of gun shows in Glendale, where he and Thompson had grown acquainted.

Thompson seemed like “a very nice man,” said La Grasta, whom authorities viewed as a victim of the scheme. “I can’t believe that he did all these things.”

Thompson also funneled arms to a ring of violent Asian gangsters led by Hung Thanh Mai (a.k.a. Henry Mai), convicted last year of murdering California Highway Patrol officer Donald Burt during a routine traffic stop.

While awaiting trial for the Burt killing in the Orange County Jail, Mai continued directing the activities of gang associates, including trafficking in arms obtained from Verde.

Straw Buyers Can Dupe Dealers

According to court records, between December 1997 and March 1998, Verde supplied four silencer-equipped machine guns to a Mai associate, along with 15 semiautomatic pistols. Undercover officers wound up buying the guns.

Some trafficking schemes are carried out by straw buyers, with dealers sometimes none the wiser. Acting as surrogates for those who can’t legally buy or own firearms, straw purchasers fill out the paperwork and pass the background check, then transfer the guns to criminal associates.

Other schemes involve unlicensed dealers buying quantities of arms and peddling them on the street--as occurred at Slims Gun Shop in Riverside in 1995.

Four free-spending customers, all from Los Angeles County, made repeated buying trips to Slims over a four-month period, purchasing 253 handguns and rifles in all, according to an affidavit filed by ATF in federal court in Los Angeles. (Such high-volume sales remain legal under federal law, although a California law in effect since January now limits sales to one gun per person per month).

The buying spree drew the attention of ATF agents, who launched an investigation. A member of the ring, Christopher Wheeler, later was convicted, although the three others were never charged.

Arthur Stephenson, owner of Slims, recalled being told by one member of the ring that he was buying the guns for his security service. “I had no reason not to believe him,” Stephenson said.

Legally speaking, Slims had no more duty to inquire than would a seller of gum or shampoo. “There was nothing that the store did incorrectly,” said ATF spokeswoman Kelly Long. Dealers aren’t obliged to ask, “ ‘Hey, what are you buying 20 guns for?’ ”

Indeed, in the Slims case the regulatory system worked basically as designed, showing the margin it leaves for terror.

Firearms dealers must send a notice to ATF when a person buys more than two guns in a five-day period. Slims faithfully mailed the notices, which is how ATF was alerted.

By then, however, the guns were leaving a trail of misery and blood. Within 20 months of the purchases from Slims, 37 of the guns had been recovered in crimes, including at least four homicides, according to ATF.

One of the weapons, a Bryco 9-millimeter pistol, was used by Keith Russell, an 18-year-old Willowbrook gang member, during a killing and carjacking spree that earned him a life prison term.

Victim Jose R. Machado, 38, had just returned from a family trip on a Sunday evening in October 1995 and was standing beside his truck when Russell rode up on a bicycle and shot him in the face.

In all these cases, authorities eventually got wind of trafficking schemes and took action. But how often do illicit arms transactions go undetected?

Experts believe it happens quite often, due partly to a gross mismatch between staffing at ATF and the vast army of licensees it is supposed to monitor.

At the peak in the early 1990s, the U.S. had 285,000 firearms licensees--more than it had gas stations.

Higher license fees and tighter requirements since then have whittled the total to 103,000--including about 83,000 firearms dealers and another 20,000 licensed manufacturers, importers and collectors. But experts say the number still makes serious oversight impossible.

Unique among law enforcement agencies, ATF has not grown over the last 30 years. It has about 2,400 inspectors and special agents with responsibility over firearms, explosives, alcohol and tobacco--virtually the same total as in 1973. The full-time equivalent of 200 field inspectors are supposed to be monitoring the 83,000 gun dealers.

The agency’s hands are tied in other ways. Under restrictions imposed by Congress in 1986 at the urging of the National Rifle Assn. and other gun-rights groups, ATF is barred from conducting more than one surprise inspection of a dealer in a single year. It also lacks intermediate sanctions, such as fines or temporary license suspensions, to impose on problem dealers.

Other than the rare criminal referral, the agency’s only weapon is license revocation, a sanction seen as so drastic it is rarely used, although in some cases, such as B and E, it proved ineffective anyway.

Indeed, ATF has never revoked more than 44 licenses in a single year, and in many years it has revoked fewer than 10.

While debate in Washington over trigger locks and background checks at gun shows has seized the most attention, the Clinton administration also has asked Congress to take steps to invigorate ATF and strengthen its regulatory powers.

One proposal calls for funding for 500 more ATF agents and inspectors, and another 1,000 state and federal prosecutors to handle firearms cases. Proposed legislation also would give the agency power to impose fines and suspend licenses and to conduct surprise inspections whenever it sees fit.

The administration also has appealed to a more obscure forum--the U.S. Sentencing Commission--for tougher sentencing guidelines for illegal gun suppliers.

Intended to encourage uniform sentencing, the guidelines usually are followed by federal judges in punishing criminal defendants. While providing tough penalties for using guns to commit crimes and for possession of guns by felons, the guidelines fail to treat most trafficking offenses as serious crimes, prosecutors and legal analysts say.

On two occasions--and most recently in January--Johnson, the Treasury undersecretary, has written the Sentencing Commission to urge harsher guidelines for traffickers.

In his letters, Johnson cited the case of a licensed dealer who was convicted of illegally supplying more than 3,000 guns--and got a 34-month sentence only because an angry judge decided to exceed the recommended sentence.

Punishment for gun traffickers is “disproportionally low given . . . the threat to public safety,” Johnson wrote. A commission official said the panel may take up the matter next year.