Author: Grumpy

• The ATF revoked the Federal Firearms Licenses (FFLs) of Morehouse Enterprises, a gun shop that after they sued the federal government over the now-defunct frames & receiver rule.

• The ATF cited 5 violations, including 2 paperwork errors & 2 more severe violations related to firearm transfers & background checks.

• Gun Owners of America (GOA) & Morehouse Enterprises claim that the ATF’s actions are arbitrary, vindictive, & a violation of due process & 1st Amendment rights.

VALLEY CITY, North Dakota — The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) has revoked both Federal Firearms Licenses (FFLs) belonging to a gun shop that sued the federal government over the now-dead frames and receiver rule.

Morehouse Enterprises in North Dakota teamed up with Gun Owners of America (GOA) to fight the ATF’s attempt to regulate unfinished frames and receivers through bureaucratic Fiat. The ATF created a rule in response to a White House order to ban 80% firearms that President Joe Biden calls “ghost guns.” This lawsuit was the first case in the country to challenge the now-vacated rule.

Shortly after Morehouse Enterprises filed suit, the ATF launched an inspection of the gun shop. This ATF visit was the first inspection that the store ever received from the ATF. The Industry Operations Inspector (IOI), Jacob Temp, jokingly told the store owner that the ATF discussed whether the inspection would look like retaliation for the court case. The IOI said that the ATF originally would delay any inspection for at least three years, pending litigation, but the Bureau decided to inspect the store anyways.

IOI Temp said that the store did well on their overall level of compliance and expressed approval for the job the shop has done to ensure they followed ATF regulations. Every single firearm was accounted for. All 2700 guns that the store acquired were documented. So were the 2400 dispositions of firearms. The shop felt good about the inspection, but that was all about to change.

Then on March 6, 2023, the ATF issued a “Report of Violations.” The ATF found five policy violations, three of which or simple paperwork errors. The first violation was the store forgetting to record the return of a firearm to a customer that brought the gun in for gunsmithing. The second violation was the store accidentally writing a customer’s Social Security number in the NICS transaction number (NTN) box. A third clerical error was a number left off a NICS transaction number.

The store had two other more serious violations. The store had transferred a handgun to a Georgia resident. FFLs are not allowed to transfer handguns to residents of another state due to the differing gun laws surrounding handguns. In this case, Georgia law is not stricter than North Dakota law.

A second violation was allowing the customer to use a Georgia concealed carry permit in place of a NICS background check. The Brady law allows exceptions to background checks. One of these exceptions is if a state’s concealed carry permit meets or exceeds the same scrutiny as a NICS check. Georgia’s concealed carry permit does that, but it can only be used in lieu of a NICS check in the state of issue.

On May 23, 2023, the ATF informed Morehouse Enterprises of its intent to revoke both of the company’s FFLs, even though the second FFL did not have any violations. President Biden has pressured the ATF to shut down FFLs through his zero-tolerance policies.

FFL revocations are up 500% since Biden took office, but even under Biden’s zero-tolerance policy, the store’s violations do not rise to the level for revocation. Under the president’s policy, the violations only merit a “Warning Conference.”

GOA has once again teamed up with Morehouse Enterprises to defend the company against the ATF’s actions. The gun rights group claims the Bureau’s actions are “Arbitrary, Capricious, an Abuse of Discretion, and Not in Accordance with Law.” The plaintiffs also claim that the ATF is violating the right to bear arms by restricting the acquisition of guns.

The plaintiffs also claim that the ATF is acting in a vindictive manner. They claim that Morehouse’s due process rights have been violated via retaliatory prosecution. They also claim that Morehouse’s First Amendment rights have been violated because the ATF is interfering with the plaintiff’s right to sue the government.

Whether or not the ATF move was retaliatory because of the guns store’s lawsuit is up for debate and will be settled in a court of law, but the optics are not good for the ATF.

Trying to shut down the business of a company suing you looks retaliatory and vindictive regardless of the reason.

---

About John Crump

John is a NRA instructor and a constitutional activist. John has written about firearms, interviewed people of all walks of life, and on the Constitution. John lives in Northern Virginia with his wife and sons and can be followed on Twitter at @crumpyss, or at www.crumpy.com.

Russell Fincher is a high school history teacher, a Baptist pastor, and a part-time gun dealer. He also coaches Little League in his hometown of Tuskahoma, Oklahoma, which has a population of around 151 souls.

Fincher, 52, has had a Federal Firearm License for three years. He has no brick-and-mortar gun shop. He’s what used to be called a “kitchen table FFL.” He sells most firearms at gun shows, including Wanenmacher’s Arms Show in Tulsa.

“Living in Southeast Oklahoma, if you don’t have a gun under $400, people ain’t buying it,” he said Thursday. “Rarely do people come to my house to buy a gun.”

In April, Fincher received a call from the Bureau of Alcohol, Tobacco, Firearms and Explosives. They wanted to do an inspection at his home.

“I told them they were welcome anytime,” Fincher said.

Two ATF inspectors arrived a few days later. They spent three hours in his home. They took pictures of his 4473s with their cell phones, which Fincher has since learned is an illegal, although common practice.

“Honestly, they were way nicer than I expected,” he said. “They said I had some guns that had traces on them, which concerned them. It concerned me too.”

The inspectors returned two weeks later. They had some “concerns” involving Fincher’s penmanship, which they couldn’t read on several forms. They also found he had juxtaposed the model number of a firearm with the weapon’s serial number, which Fincher was attempting to rectify.

On June 16th, 2023, Fincher and his son were packing for a gun show in Tulsa when the phone rang. It was the ATF. They said they wanted to talk to him before he left for the gun show.

“We can come out to your house,” he recalls the agent saying. “I told them sure; I’d be home.”

That is when seven vehicles roared up to his home and disgorged a dozen ATF agents wearing tactical gear, armed with AR-15s.

“It was like the Trump raid. They called me out onto my deck and handcuffed me. My son was there and saw the whole thing. He’s 13 years old,” Fincher said. “They held me on the porch for about an hour. I was surrounded by agents. One by one, they yelled at me about what I was doing. In my mind I decided if they were going to beat me up over every little thing, I’m done. As soon as I said, ‘If you want my FFL, you can have it,’ one of the agents pulled out a piece of paper and said, ‘Well then sign here.’ He had made three copies in case I screwed one up. It was exactly what they wanted. I was shocked.”

As soon as Fincher relinquished his Federal Firearm License, the ATF began loading up his guns, including a Colt Commander, five Glocks, and a mint AK – a Polytech Pre-ban milled under-folder, which is worth thousands of dollars.

“They took more than 50 of my personal guns,” Fincher said. “I asked them why, and they said they were ‘evidence.’ I’d estimate they took $50,000 to $60,000 worth of guns.”

ATF Threats

After ATF’s SWAT team cleared Fincher’s home, they called the agent in charge of the raid – Special Agent Theodore Mongell – and told him it was “safe to come up.”

“You’re done. We have to shut you down,” Fincher recalls Mongell saying. “You tell all your FFL buddies we are coming for them. We are shutting the gun shows down.”

“One agent told me they hate home FFLs,” Fincher said. “He said if I wanted to sell a Browning shotgun to someone at a gun show with no paperwork, that’s no problem, but when I sell a Glock or an AR lower that’s a ‘gangbanger.’ I asked him where it said that in the regs. He said no gangbanger would be shooting people with a $2,000 Benelli. To me, that was one of the dumbest statements he could have made.”

Several agents accused Fincher of making too much money through his gun show sales. He told them at the last show he attended, he only sold $75 worth of ammunition, but spent $1,200 on hotels, tables, gas, and food.

“They said I was basically using my FFL to sell guns personally,” Fincher said. “They said I was going around the system, putting guns on the street that should not be.”

Fincher was told to load the firearms ATF didn’t want into the back of his pickup, which he later took to another FFL. Toward the end of the ordeal, Fincher asked Mongell about his guns they had seized.

“He told me, ‘If you’re willing to forfeit them, we can make a lot of this go away,’” Fincher said. “This sounds to me like a shakedown. They seized my guns as punitive damage. They knew how to get me, by taking all my guns. There was no rhyme nor reason to what they took. Honestly, they took the most expensive and rarest ones.”

ATF Response

The Second Amendment Foundation’s Investigative Journalism Project contacted ATF Special Agent Theodore Mongell on his cellphone Thursday afternoon and asked him why he raided Fincher’s home and seized his guns.

“I can’t answer any questions,” he said. “I’m not supposed to do that, per my agency. Actually, I’m not supposed to talk to anyone until I get approval from my higher ups. I have to verify who you are, take down your info and go through my agency.”

Despite his promises, Mongell never called back.

Takeaways

There does not appear to be any justification for a SWAT team raid or such a massive show of force. After all, Fincher invited the ATF into his home.

After berating him for more than an hour, the agents never even told Fincher if or when he would be charged with a crime. He fears he would lose his teaching job if he’s charged with a felony.

“They have my life in the palm of their hands, and they have very little accountability,” he said. “I’m just trying to make a living and it takes three jobs just to make ends meet. Dealing as little as I have with the ATF, when you ask them a specific question, they’ll tell you it’s a grey area. Well, a grey area can send you to jail. I’m not Hunter Biden. I’m not going to get my weapon charges dropped.”

---

About Lee Williams

Lee Williams, who is also known as “The Gun Writer,” is the chief editor of the Second Amendment Foundation’s Investigative Journalism Project. Until recently, he was also an editor for a daily newspaper in Florida. Before becoming an editor, Lee was an investigative reporter at newspapers in three states and a U.S. Territory. Before becoming a journalist, he worked as a police officer. Before becoming a cop, Lee served in the Army. He’s earned more than a dozen national journalism awards as a reporter, and three medals of valor as a cop. Lee is an avid tactical shooter.