Home-based gun dealers fail ATF inspections nationwide
Federal firearms agents had one major target as they swarmed the parking lot of a
Federal firearms agents had one major target as they swarmed the parking lot of a Texas movie theater hours after a deadly shooting spree in 2019: the shooter’s AR-15-style rifle.
Within hours, they had traced the gun by its serial number – 16020756 – through a West Virginia warehouse of federal gun records to a gun shop called Mulehead Dan’s in Lubbock, Texas, where they knocked on the door.
That door did not lead to a traditional retail store with racks of ammo and gear. It opened into the three-bedroom gray brick ranch home of retiree Danny Delashaw, then 68.
Although the Bureau of Alcohol, Tobacco, Firearms and Explosives inspects fewer than 15% of all firearms dealers each year and rarely revokes licenses, some of those who face the strictest penalties are home-based sellers such as Delashaw, records show. The ATF calls them “kitchen-table” dealers and, based on some estimates, they hold a majority of all gun shop licenses.
These dealers are often targeted by the ATF since they don’t invest in the same inventory tracking and security – treating their business as a hobby – and don’t fight Department of Justice attorneys with the same vigor established chains or stores have displayed in revocation examinations over the past several decades.
In a review by The Trace and USA TODAY of two years of records from ATF inspections, these sellers faced some of the toughest penalties. Of 150 shops that received revocations or warning conferences, the two most serious penalties, 40 were nontraditional sellers.
Home-based sellers run afoul of ATF rules when they don’t record their sales and inventory properly, fail to perform background checks on buyers and sell off premises in places they, by law, should not – everything from parking lots to out-of-state gun shows.
Delashaw operated Mulehead Dan’s as a side business for a decade, selling and transferring firearms. Among his best customers was Marcus Braziel, who bought more than 94 firearms from him over three years. Federal prosecutors in court documents claim Delashaw knew Braziel routinely resold the firearms without subjecting his customers to background checks.
One of those guns became the heart of the rifle Seth Aaron Ator, 36, used to terrorize the West Texas cities of Midland and Odessa before he was shot and killed by police. Ator purchased the firearm privately after being blocked from buying one in 2014 after he failed a background check because a court determined he was mentally unfit.
In 2016, according to ATF records, Braziel purchased the lower receiver, the firing mechanism of the AR-15 that the ATF regulates as a gun. He added the pieces required to make it fire 5.56x45mm ammunition – the stock, barrel, bolt and accessories – before selling it illegally to Ator for $750 on Oct. 8, 2016.
Though Braziel was sentenced to two years in prison in January for selling the weapons without a license, federal prosecutors did not pursue charges against Delashaw. Instead, the ATF quietly asked him to surrender his license during an in-person visit two weeks after the shooting.
Delashaw told ATF investigators he knew Braziel was purchasing, building and selling firearms – and even questioned him about whether that was legal, according to court records. He faces a civil lawsuit brought by the families of Ator’s victims.
Kitchen-table dealers are legal if they meet the same basic requirements for a federal firearms license (FFL) as any other dealer: a $200 fee and a photo, fingerprint and background check.
The review of recent inspections found violations across the country, from a dentist in West Bridgewater, Massachusetts, cited for failing to keep accurate records to a church pastor for illegally selling guns out of his vehicle in Albuquerque, New Mexico.
In Franklin Park, Illinois, a home-based seller got in trouble for saving his official gun sale records in a Microsoft Word document, easily accessible to anyone on his computer. Facing revocation, another – in Auburn, Pennsylvania – submitted a handwritten compliance plan on a sheet of notebook paper.
One man was sanctioned for paperwork errors while selling rifles out of his financial advising office in Texas, and a prison guard in Washington faced punishment for selling to prohibited sellers and falsifying records.
with low licensing fees and minimal barrier to entry to establish a business, kitchen-table dealers boomed throughout the 1970s, ’80s and ’90s even before the proliferation of online sellers. By 1992, the majority of the nation’s 250,000 gun dealers were based in homes or offices, according to the Violence Policy Center, a nonprofit group that advocates for stricter gun regulations.
In 1990, an ATF study of the top sellers of guns linked to Detroit crime scenes found that home-based sellers occupied six of the 10 top spots, including first and second. By 1993, 74% of all dealers operated out of their homes, the agency estimated.
Those statistics drew the attention of the Clinton administration, which suspected many were abusing the license to get wholesale prices on weapons for personal use.
Congress wrapped higher fees and stricter regulations into the Brady Handgun Violence Prevention Act of 1993, raising license fees from $30 to $200. That change acted as a deterrent: Within five years, the ATF said, about half of dealers operated out of their homes.
That may have notched back up to 60% last year, according to Brandon Maddox, a South Dakota FFL-holder who helps businesses – including kitchen-table dealers – obtain licenses. Maddox used ATF data merged with postal addresses to reach that estimate.
ATF regulators say they need more money to inspect shops nationwide more frequently, including home-based sellers. Local authorities also play a bigger role in home-based gun shop oversight since they can use zoning to ban commercial activity in many residential neighborhoods.
The internet has contributed to the most recent uptick. Popular online marketplaces such as Armslist and Gunbroker allow dealers to sell to customers but ship firearms to a licensed gun dealer more convenient to the buyer, often a home-based dealer. That dealer is charged with completing the ATF forms and submitting a background check before handing over the weapon.
A home-based gun dealer may maintain little or no regular inventory, making its money from processing internet-sales transfers from out of state. Storage units and other nontraditional structures can even serve as stores.
No rules require firearms to be safely stored at a dealer, although a 2005 law mandates sellers provide some safe storage options to customers, including trigger locks.
Brady, a nonprofit group pushing for an end to gun violence, targeted home-based sellers with lawsuits in the wake of high-profile crime involving guns, Chief Counsel Jonathan Lowy said.
The reports analyzed by The Trace and USA TODAY were obtained through a Freedom of Information Act lawsuit by Brady.
Lowy hopes that targeting some small-time buyers will raise wider awareness of the criminal and civil consequences of selling to the wrong buyers.
In Delashaw’s case, it’s unclear what ATF investigators found when they inspected his books because criminal investigators with the U.S. Attorney’s Office made the visit and declined to share details, citing an ongoing investigation. He faces litigation from Brady and the Odessa families that will last long after his last sale.
Delashaw’s attorney in Lubbock, Texas, said he freely turned over his license at the ATF’s request but admitted no wrongdoing.
“Mr. Delashaw was doing this as a hobby, but when the ATF shows up with a badge, you’ll do whatever they say,” Grady Terrill said. “He’s devastated about this. as anyone would be, but it’s hard to blame him for this catastrophic event.”
Lowy hopes to overcome the liability protections afforded to gun dealers and manufacturers under the Protection of Lawful Commerce in Arms Act with the theory of “negligent entrustment.” He argues that people such as Delashaw have a legal obligation to recognize illegal buyers and resellers such as Braziel to prevent violence.
Joe Vincent, a former supervisor of ATF’s gun crime unit, testifies as an expert in cases involving dealers who sold weapons to criminals. He said the 1968 Gun Control Act granted special responsibility to gun dealers to be the final check before selling a controlled item, as is the case with liquor or pharmaceuticals.
“There’s a tremendous onus on them because they receive a license to be the eyes and ears of the government,” Vincent said. “They’re the final gatekeepers and know what’s going on, so they have a responsibility to stop illegal activity.”
Kitchen-table sellers, like all licensed gun dealers, are required to complete the physical sale of firearms at the address on their license or at in-state gun shows. When they are tempted to complete “off-premises” deals, the consequences can be dire.
Scott Harrop, a pastor at a New Mexico church, operated High Desert Tactical out of his Albuquerque-area home. The shop was investigated by ATF regulators in 2013 for failing to keep its paperwork in order. That inspection resulted in no penalty, despite the violations.
Harrop received even greater scrutiny after an incident in 2015, when a gun sale in a parking lot quickly turned into a robbery. The buyer, Thomas Martinez, pulled out a shotgun and stole nine handguns and Harrop’s Toyota Tacoma.
Martinez went on a drug-fueled rampage in the following days with one of the handguns he had stolen, an FN 5.7 with rifle-style bullets often described as a “cop-killer,” valued at $1,000.
He carjacked two people, including an elderly woman who fought him while police gave chase. In that chase, he dragged a police sergeant, sending him to a hospital.
Martinez was caught, prosecuted and is serving a 27-year prison sentence. Harrop said five of his nine stolen handguns were recovered – several had been used in crimes, including one in California, according to federal records. Four remain missing.
“It’s people and not firearms that are the problem. It’s also a sin problem,” said Harrop, now a senior pastor at a church in Idaho. “There were a couple things I didn’t do correctly on the forms, and that’s on me, and the ATF did exactly what they should.”
ATF regulators say seemingly minor paperwork errors can break crucial links in criminal investigations. Police nationwide rely on the forms filled out at the point of sale by gun dealers.
ATF inspectors said Harrop failed to record the acquisitions of some firearms and the sale or transfer of more than 430 firearms, failed to file special forms for sales of multiple handguns 21 times – involving 52 handguns – and surrendered his license.
After meeting with the ATF and turning over his license, he transferred 98 firearms into his private collection, according to ATF records, a loophole used by many dealers when their licenses are revoked, surrendered or expire.
When asked whether he still had all 98, he bristled. “We’re done,” he said and hung up.
John Peterson operated his dental practice out of a pink clapboard house with white trim in West Bridgewater, Massachusetts. Up front, people had their teeth cleaned and their cavities filled. In the back and upstairs was an armory with more than 700 firearms.
Peterson operated a gun shop, SEMASS, alongside his dentist business and even combined the two, selling guns to patients. His case shows that strict record-keeping and lax storage can create barriers when law enforcement tries to trace guns used by criminals.
One night in 2015, someone broke into the building on West Center Street and stole at least 11 Colt handguns. Only one has been recovered. It turned up in a basement in September 2020 about 5 miles away, and is in a Brockton police storage locker.
A police investigation found Peterson kept his entire inventory in unlocked safes. An officer responding to the burglary asked why Peterson had such a giant inventory of firearms unsecured. “He shrugged his shoulders and said that he never thought something like this would happen to him and he felt that it was secured just fine,” according to the police report.
Police said Peterson told them most of his gun clients were from his dentistry business, that “while doing work on clients’ teeth, he often talks about his collection with them.”
But police also said the family dentist had befriended a group of strippers from a local club frequented by a violent motorcycle gang.
Putting the pieces together, police theorized that the most likely culprits were strippers, their boyfriends or even bouncers from the club, but no charges were filed against Peterson or anyone else.
Massachusetts authorities seized all of Peterson’s weapons, and the ATF revoked his license for failing to accurately record sales. Police said Peterson violated state laws by failing to store his inventory in locked cases.
Peterson died in 2019 at the age of 70.
Contributing: Daniel Nass with The Trace, a nonprofit newsroom dedicated to improving public understanding of gun violence, increasing accountability and identifying solutions.