Receiving gun from a soon-to-be felon, advice needed.

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essayons21

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I recently have found myself in a sticky situation. I have a friend who recently plead guilty as part of a plea deal with the FBI and US attorney's office to a few counts of wire fraud and bank fraud. He basically lied on some federal forms in order to get millions in tax credits, which were then sold to corporations for millions of dollars. Part of his plea agreement is to become a cooperating witness for the feds against another person involved in the same scheme, who apparently the FBI wants to see in jail for a long time.

Obviously he will soon be a felon and lose his 2A rights. He has a massive gun collection. As part of the deal, he is allowed by the the FBI to give his collection away, and I am receiving about a third of it, although I am getting the most valuable pieces because he knows how much I appreciate fine guns. I also will be getting most of the ammunition, which he bought by the pallet. This arrangement is being supervised by the FBI, I am signing for each gun by serial no. and they may be contacting me to verify I which guns I have received so that they can account for all of his firearms.

Now that is the simple part. What I am concerned with is the civil forfeiture proceedings and his eventual bankruptcy hearings. Both the indictment for the man he is testifying against and his plea deal include civil forfeiture. My friend's deal only lists a certain number of properties which were bought with ill-gotten gains, and a few vehicles. The other guy's civil forfeiture includes pretty much everything he bought in the past 8 years, and specifically lists numerous firearms. Also, when the dust settles I am sure that my friend will be declaring bankruptcy and that court will be going after all of his assets.

So my main questions is, can I sell or trade away any of these guns? There are far too many for me to keep, I simply don't have the room. I am going to have to buy a new safe, which I will have to sell at least one gun in order to afford. I am worried though that the bankruptcy court might try to come after the guns and any proceeds from the guns, even though he was ordered to transfer them out of his possession as gifts by the FBI.

I am also worried about how a sentencing or bankruptcy judge might view him transferring tens of thousands of dollars worth of assets immediately before his conviction, again even though he was ordered to do so by the FBI.

Further complicating matters is the fact that I have a C&R FFL, and if I do start selling large amounts of firearms I don't want to look like I am in the business of selling them and lose my FFL.

I am going to be in contact with his lawyer, and may contact a lawyer that specializes in firearms law, but I wanted to get some opinions from THR first.

Thanks
 
I'm pretty sure the ATF specifies that selling off all or part of a collection is NOT being in the business of selling firearms. Going by that, you could go ahead and sell all of them at once if you really wanted to.
 
If you are getting these guns for free then I'd figure out a way to keep them until the bankruptcy court concludes it's matters. Or, if you must sell the guns, "freeze" the assets in your own account.

I was involved in a corporate bankruptcy where the court ordered almost all the money paid out in the last few weeks to be returned, there were some mighty upset vendors but that's the way it goes, the court does not allow preferential treatment. Your concerns are well-founded.
 
Looks to me like the key is this: "My friend's deal only lists a certain number of properties which were bought with ill-gotten gains..."

If the guns weren't bought with ill-gotten gains and thus are not listed, you should have no problem--particularly since you are being "blessed" by the FBI.

Once the guns are gone from his possession, they are no longer part of whatever assets remain to him--and thus should not be of interest in any bankruptcy proceedings.

Whether you keep or sell, make sure you have a file of all pertinent information such as nomenclature and serial number, as well as prices realized from any sales.
 
Sounds like you also need an expert in property/finance law.

I don't know bankruptcy law, but I would think that gifts to another before filing would be protected as long as the gift wasn't to shelter assets from the government...in this case it is an attempt to make things right with the government.
 
I have heard that bankruptcy trustees can go after pre-bankruptcy assets under certain circumstances.
 
Had I been you?
Talk to his lawyer, And get your own lawyer like you said who specialize in that kinda of area. Keep copies of EVERYTHING and don't do anything with anything until the dust settles. Make sure to get to that lawyer just in case of anything and do what is best to keep you out of hot water. Ask every question you can to your lawyer and document what ever you have to. Leave no stone unturned.
 
Ask every question you can to your lawyer
Click to expand...

Just remember that every question you ask a lawyer comes with a billing fee, won't take long to where you have to sell every gun to pay the lawyer :uhoh:
 
There's the rub. I checked some fees for nearby lawyers who specialize in firearms. $300+ an hour. Anyone know a Virginia lawyer who wont charge me an arm and a leg to answer a few questions?

Thanks for all the replies and advice so far. Right now I am still receiving guns a carload at a time, and researching rough values.

My interpretation of federal law leads me to believe he can keep all of his antique arms? Anyone know if this is correct?
 
Perhaps he has a safe or 2 that he will no longer need that could go with the carloads of guns? could put off your having to sell any right away to buy one on your own....
 
You do NOT need a firearms lawyer. You need a lawer who specializes in "creditors remedies/secured transactions" and/or bankruptcy.

If he doesn't know the ins and outs of "article 9," go to another lawyer.

I'm about 2 weeks from graduating law school. I just took a semester on creditor's remedies & secured transactions. To say that this is way too complicated even for a "lay lawyer" is more than a little bit of an understatement.

FWIW, I would imagine that the transfer of these firearms to you would not be deemed a "sham" transaction by an adjudicating court (unless you are trying to turn his guns into money for him), but that hardly means that someone couldn't come after you for those guns regardless. It probably depends on when the people in the civil forfeiture action get liens against your friend's property (and maybe when/whether they perfect those liens). It might well depend on the civil forfeiture laws of your state, which could have a huge impact, or none at all, depending on what they say.

This is a problem you probably need a lawyer for. It sounds like a lot of guns, and therefore a lot of money, which probably means the piece of mind is worth it.
 
Sorry to hear about your friend. Personally, I would get an attorney and do what you have to do. He gives them to you, you can do with as you wish. Good luck! Jeff
 
You say "I am receiving..." Does that mean you have not yet taken possession of the guns?

IMHO, if you have not done so, don't. The deal is tempting, but IMHO it can turn into a can of worms you don't need to open. The FBI can make all the deals they want and then BATFE can arrest you for doing what the FBI said was OK, or a civil suit could be filed to take the guns and penalize you for conspiring to "hide" assets. Not to mention the tax issues (the guns are assets and therefore income). The whole thing is like a "tar baby", and I strongly recommend you don't get involved.

At best, the situtation is way beyond the expertise of most of us, and could turn into a very costly and time consuming legal mess.

Jim
 
I'm willing to do my part and take five of the firearms you won't have room for in your collection. Since you'll be gifting them to me - no problems with your C&R!
 
If the FBI is involved then you definitely need an attorney. My main concern would be a gift tax if these guns are as valuable as you say. I assure you that the people looking to get their money back will go after every asset this guy has ever owned, including the guns that are gifted to you. that does not mean they have any legal claim on this property but it will be worth it to hire a lawyer. If you need to sell some guns to pay legal fees then I would gusee that that would be okay as long as you keep close records and sell the guns at something close to the actual value.

As much as I hate dealing with attorneys this case screams for legal advice.
 
If you're a member of the VCDL, there are a couple lawyers that offer reduced rates.

http://www.vcdl.org/static/discounts.html

edit: if you're not a member, it's a good organization that's done quite a bit for VA gun rights, and since most of the attorneys are offering free initial consultation and heavily discounted rates for members, it's probably a pretty good place to start.
 
That seems like a good problem to have. Just have your own legal counsel and keep meticulous records of every firearm that is "gifted" to you by your friend. I would wait for a bit to sell them; maybe sell some of your personal firearms to fund a couple of large storage safes.

IMO if the FBI already cleared you to receive them and you have all your paperwork, you should be ok. But your own lawyer would be the best person to research this for you.
 
I think the rule is if the asset was given specifically to hide the asset from the court. In your case, this would not be true as the government is forcing him to dispose of (gift) these assets.

In any case, you may or may not need an legal help. It would be a good idea to at least retain a lawyer that is knowledgeable about bankruptcy procedings.
 
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