Man collecting Walker Colt revolvers scammed by gun dealers.


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jsalcedo
December 20, 2005, 03:43 PM
A duel sparked by value of rare ColtsBY JOHN SHIFFMANKnight Ridder NewspapersPHILADELPHIA - The legendary Samuel Walker, dashing and headstrong Texas Ranger, survived a Mexican Army death camp and a Comanche's battle lance to the gut.
On a trip East in late 1846, Walker joined with another legend-to-be, Samuel Colt. Together, they developed the world's first Magnum revolver, a six-shot, .44-caliber handgun that launched Colt from obscurity and bankruptcy to fame.
Walker barely got a chance to test the new weapon. Fatal bullets struck him as he battled Mexicans in late 1847. According to eyewitness accounts, as he died, Walker handed a pair of his new Colts to a colleague and declared, "Don't give up, boys."
One hundred fifty years later, the revolvers would be reunited in Bucks County, Pa., to great acclaim - and soon after, would become a centerpiece of a modern-day scandal.

"Few firearms in history have captured the imagination of collectors and historians as the Walker Colts," said Philip Schreier, museum curator for the National Rifle Association, which has declared them national treasures.
"The Walker Colts are the Hope Diamond of the gun-collecting industry - it's like having Henry Ford's Model T," Schreier said. "From those guns, rusted and ugly, come all others. It's unfortunate what's happening now."
The scam broke quietly in 2000, when a wealthy New Hope, Pa., man who paid $2.2 million to acquire the Walker Colts discovered that he had been had.

The weapons were worth about half that, authorities said. A lawsuit and criminal investigation followed. In 2003, a grand jury indicted two nationally respected gun dealers on conspiracy charges.
"This prosecution has brought to great light the underbelly of the gun-collecting industry," Assistant U.S. Attorney Robert E. Goldman said in a court filing. "Collectors, investors, brokers and dealers are watching the outcome of this case with great interest."
The victim from New Hope is Joseph A. Murphy, a semiretired investor and high-end collector, who also acquired $17 million worth of classic American cars.

The gun dealers who conspired to con Murphy are Richard Ellis, 44, of LeClaire, Iowa, and Michael Zomber, 55, of Franklin, Tenn. Zomber, convicted at trial, will be sentenced Thursday. Ellis, who pleaded guilty, will be sentenced next month.
The scheme has its roots in 1997, as Murphy began to build a serious collection of antique firearms.
Murphy hired Ellis as his expert consultant and agreed to pay a commission on each weapon purchased, 10 percent up to $1 million and 5 percent beyond $1 million.
All told, Ellis helped Murphy spend $30 million to create one of the nation's foremost private collections of antique revolvers.
"The pieces aren't just guns," Robert Wittman, senior agent on the FBI's Art Crime Team, said of Murphy's collection. "They're considered works of art."

The scheme was simple: Ellis led Murphy to believe that Zomber was a disinterested dealer, a competitor. Zomber wrote letters feigning interest in pieces Murphy sought, driving up the price. In return, Ellis paid Zomber more than $1 million in kickbacks, authorities said.
Murphy realized that Ellis might be inflating sales prices during a gun show in Reston, Va., in 2000, according to trial testimony.
At the show, Ellis urged Murphy to buy a set of 1860 Colts. Ellis said they were worth $1 million. When Murphy asked other dealers, they told him the weapons were worth about $350,000.
"I started to question Mr. Ellis' loyalty to me," Murphy testified in federal court in 2003.
A few months later, Murphy invited one of the other dealers, Martin Lane, to examine his Colts.
"I asked him at the time, 'What's the matter with my collection? Are the guns real?' He says, 'No, they're good guns, but they're way overcharged.'"

Lane told Murphy he had overpaid by about $12 million.
"I trusted this man," Murphy said of Ellis.
Of Ellis and Zomber, Murphy testified: "If they just would have treated me fairly, the money they would have made doing it legitimately, getting their regular commissions, would have made them very rich men."
Furious and embarrassed, Murphy sued Ellis. The civil lawsuit was settled for $4.7 million, payable in antique firearms, according to a court record.

Ellis did not fight the criminal charges. He pleaded guilty to conspiracy to defraud Murphy. Prosecutors will seek a "significant" prison sentence, but less than three years.
Zomber went to trial. His lawyer, Gilbert J. Scutti, unsuccessfully argued that it was not a crime to sell an antique for whatever price the market will bear. A jury convicted him of conspiracy.

At Thursday's sentencing, prosecutors will ask U.S. District Judge Cynthia Rufe to sentence Zomber to about three years in prison.
Zomber's new lawyer, Gerald B. Lefcourt, said his client deserved probation, not prison. Zomber has led an "upright and honest" life but now "feels debased and humiliated" by what happened, Lefcourt wrote in a recent filing.
Lefcourt argued that the verdict was unfair because Lane was not a qualified weapons expert and Ellis' and Murphy's commission agreement was informal, not contractual. Lefcourt also cited the civil settlement agreement between Ellis and Murphy, which says "the evidence as a whole does not support any claim of fraud or intentional misconduct" - a line that caused authorities pause before following through with the indictment.

"Phony letters were written to induce the purchase of a valuable one-of-a-kind antique firearms at prices that may or may not have been inflated," Lefcourt argued. "There is no dispute that Murphy received very valuable guns for his money. The only dispute is whether they were really worth what he paid for them."
True enough, said Schreier, the NRA historian who traced the history of the Walker Colts.
Among the best evidence, Schreier said, is a letter written to Walker's mother shortly after his death. In the letter, a soldier wrote that as Walker lay dying on the battlefield, "he gave his pistols to young William Ashbaugh."
Ashbaugh gave them to a superior, and "the guns moved through the chain of command and back to Walker's mother in Greenbelt, Md.," Schreier said.

The Walker Colts remained together with the Maryland family for nearly a century, Schreier said. "During a family wake in 1945, there were cousins from out of town, the guns were on a dresser, and someone took one," Schreier said.
Many years later in California, the errant revolver was purchased by a well-known dealer. It subsequently passed through several dealers, including Ellis.

In 1997, Murphy, working with Ellis, paid $2.2 million to reunite Walker's Colts.
"What are they worth?" Schreier asked. "I don't know. These guns revolutionized modern warfare. I've seen people spend more on less."

http://www.bradenton.com/mld/bradenton/news/nation/13448615.htm

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WT
December 20, 2005, 03:52 PM
Very interesting writeup. The collector should have gotten multiple opinions instead of relying on the word of one person.

As an aside, a number of original Paterson Colts were recently stolen from the Paterson, NJ Museum. I wonder where they reside now?

Sistema1927
December 20, 2005, 03:58 PM
"A fgool and his money are soon parted."

jsalcedo
December 20, 2005, 04:11 PM
At least he got real ones.

I wonder how many fakes are out there.

Justin
December 20, 2005, 04:13 PM
Duplicate.

http://www.thehighroad.org/showthread.php?t=172115

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