ATF beginning to investigate group buys of firearms

[meplatgroup]

Gentlemen,

I have no first hand knowledge of this situation, but there is a board that I'm on (it's restricted to FFL holders) where this has become a topic of discussion.

There is one report of the ATF investigating a group buy organizer here:

http://www.northeastshooters.com/vbulletin/general-discussion/211422-neser-needs-your-help.html#post3249038

The ATF has stated in a bulletin here on page 6that:

Individuals who engage in the business of brokering firearms by buying firearms from a manufacturer, selling those firearms to a licensed third person, and then arranging with the manufacturer to have the firearms dropped shipped to the purchaser, are required to obtain a Federal firearms license.

Basically, what they are saying is that if you are the guy that collects the money for the group buy, you MUST have a FFL even if you never see the guns. Therefore, I recommend that either 1) everyone send their money straight to the manufacturer/dealer selling the firearms, or 2) the group buys be organized through a FFL who will collect all of the money.

I'm not trying to rain on anyone's parade or discourage group buys---I think they are great. I use the same concept when setting up my deals of the week. I just don't want to see anyone get in trouble.

Please be cognizant of the ATF's position on this moving forward.

Best,
Kenny

 

[Cheesy Lasagna]

In all honesty, I wonder what took them so long.
I have seen some sketchy group buys on the Internet- where there's abuse you often find regulation and monitoring seeping in.
Not that I am a fan of this at all, but it seems expected to me.
And yes, most people seem to do group buys in a respectful and transparent manner from what I have seen.
But there's always someone out to make a buck.

 

[Lokin4AReason]

thanks for the heads up on this ...

 

[Vermiform]

When I sponsor a group buy, I collect all the funds and pay for the rifles with a credit card. They are then shipped to a local ffl where individual members pick up their rifle and do the background check. Is this the type of group buy they have a problem with now?

Sent from my DROID3 using Tapatalk 2

 

[JNieman]

When I sponsor a group buy, I collect all the funds and pay for the rifles with a credit card. They are then shipped to a local ffl where individual members pick up their rifle and do the background check. Is this the type of group buy they have a problem with now?

Sent from my DROID3 using Tapatalk 2

Exactly

 

[sportsbud]

Exactly

Really?! the ATF, is a a bunch of pricks! This makes no sense... how is this illegal? For example a group buy I did a while ago, I made zero profit, and did not sell the guns myself... How is it illegal? now if you had an C&R there may be some validity...

Also I did not pay the manufacture myself I collected the funds then the FFL paid them...

 

[JNieman]

Really?! the ATF, is a a bunch of pricks! This makes no sense... how is this illegal? For example a group buy I did a while ago, I made zero profit, and did not sell the guns myself... How is it illegal? now if you had an C&R there may be some validity...

Also I did not pay the manufacture myself I collected the funds then the FFL paid them...

I think it sucks, but I can't disagree with the ATF.

How is it different to organize a group buy and control the funds, than it is to buy a bunch of guns and put them up for sale?

If the FFL paid the manufacturer, you're fine. Because the FFL is the one buying the guns and selling them.

Here, let me put it another way. Say I organize a group buy for 20 guys to buy some custom 1911s. We all get a big dick engraved on the side, or something. I get the quote. I tell everyone it'll be $10 more than the quote. I just made money off a group buy. I just made a profit off of guns with no intent otherwise. I was then, in the business of dealing guns.

Let's put it an additional way. I collect everyones money for the Big Dick 1911 Series pistols. I go and buy 20 of them from STi or whoever. I just bought 20 handguns and I had no intentions of ever possessing 19 of them. Even though I didn't fill out a 4473 for them, I bought them - they were on my card. Then they all go to a dealer and we all show up and do our transfers. So I bought those handguns but someone else filled out the 4473. Sounds suspiciously straw-purchasey, if I'm an auditor. The only way to defend against it is to have line-item receipts of every step of the way, which is about as reliable as Hipernt with holler points.

Yes, many people, all over, routinely conduct group buys in which no one is really profiting, no one made a straw purchase, and no abuse was made. But the mechanism used to engage in the group purchase is, however, the same mechanism that one could use to engage in straw purchases or dealing without a license, without doing anything different, as far as evidence goes. The ATF can't just take you at your word that everyone paid you money AND how MUCH MONEY, when they ask you to prove you're not dealing, or not what not.

 

[JNieman]

Anyways, it's not like it stops you from being able to do anything. The /only/ difference here is that you have to have an FFL do the purchase for you, rather than you making the purchase directly.

So for example, that Mosin group buy a while back - those were all sent to one FFL anyways... set it up the same way, but work with an FFL that is willing to take delivery of the money and purchase the guns for the group himself. That way an FFL is the one completing the transaction.

 

[meplatgroup]

When I sponsor a group buy, I collect all the funds and pay for the rifles with a credit card. They are then shipped to a local ffl where individual members pick up their rifle and do the background check. Is this the type of group buy they have a problem with now?

Sent from my DROID3 using Tapatalk 2

Yup, if you collect cash you are considered to be in the business of "brokering" firearms by the ATF. They may not win in court on this, but if I can go my whole life without being a "test case" I will die a happy man. Winning in court is expensive and time consuming (hence the collection being taken up for the defense of the poor bastard in the link I posted).

I find this very sad and very scary.

Kenny

 

[rockmup]

When I sponsor a group buy, I collect all the funds and pay for the rifles with a credit card. They are then shipped to a local ffl where individual members pick up their rifle and do the background check. Is this the type of group buy they have a problem with now?

Sent from my DROID3 using Tapatalk 2

Yes Sir it is.

 

[Sugarbug]

Yup, if you collect cash you are considered to be in the business of "brokering" firearms by the ATF. They may not win in court on this, but if I can go my whole life without being a "test case" I will die a happy man. Winning in court is expensive and time consuming (hence the collection being taken up for the defense of the poor bastard in the link I posted).

I find this very sad and very scary.

Kenny

That is relevant to about how every group buy I've witnessed has ever been done. Utterly foolish, IMO, but since when has all of their rules made sense?

16": OK.
Less than 16: MOTHER OF GOD.

New Machine Gun: Absolutely not.
Pre 1984 Machine Gun: Well....

Thank you for posting this, though. It's good to know.

 

[Vermiform]

Well, I guess I will have to let our FFL handle the money from now on.

 

[stancel]

Does this apply to group buys by illegal immigrants who are members of Mexican drug cartels?

 

[LaBelle]

Does this apply to group buys by illegal immigrants who are members of Mexican drug cartels?

Of course not - only law-abiding citizens will run afoul FAST of the rules and have FURIOUS charges leveled at them!

 

[03protege]

In all honesty, I wonder what took them so long.
I have seen some sketchy group buys on the Internet- where there's abuse you often find regulation and monitoring seeping in.
Not that I am a fan of this at all, but it seems expected to me.
And yes, most people seem to do group buys in a respectful and transparent manner from what I have seen.
But there's always someone out to make a buck.

What do you see that is sketchy?

 

[SpeedRacer]

What do you see that is sketchy?

The recent lower group buy here on BS is one example...

 

[03protege]

The recent lower group buy here on BS is one example...

From a fraud point of view I can see where that would be an issue but I don't think the ATF are too worried about people getting scammed out of their money.


I always assumed that the whole point of having to have an FFL for selling firearms as a business was due to "safety" related reasons such as background checks and having a paper trail in the event a gun is found to be used in a crime. I guess there are other reasons for it.

 

[CUJOHUNTER]

ATF is probably monitoring this conversation right now......

 

[general mills]

count me in on the STI 1911 Big Dick series

 

[general mills]

ATF is probably monitoring this conversation right now......

Oh no, them and the NSA now know I'm looking to purchase Big Dick!!!