Legal Loopholes Disarm Government Agents

A Merchant of Menace: The Story of a California Gun Dealer

by Aura Bland, Center for Investigative Reporting (CIR)
(This is an abbreviated version of a story that originally appeared in Muckraker, the Journal of the Center for Investigative Reporting, Winter 1994 issue.)

The night of October 7, 1988, guard Reese Davis was asleep in the security office of a housing project in Oakland, California, when Shawn Garth showed up with two friends. Hours earlier, they had argued with housing authority guards and Garth had left, warning he was going to go "to Traders" gun store. He threatened he was "going to get" the guards.

Traders Garth, 23, had a prior conviction that would have made it illegal for him to buy a gun. But that did nothing to stop what happened next. He went to the home of an acquaintance, Dosia Dean Arnold, where he told Arnold to bring identification so that Arnold could buy a gun.

Along with a third man they went to Traders. Garth pointed to an AK-47 assault rifle and told Arnold, "Get that one." He handed Arnold $500, then went outside and waited while Arnold bought the gun and 550 rounds of ammunition.

They returned to the project and opened fire. Davis was shot and killed. A second guard, Wale Osijo, survived by diving under a table, where he was shot 15 times in the stomach and legs. Garth is serving a prison sentence of 56 years to life.

Garth is only one in a long line of criminals who authorities say have bought guns from Trader Sports, Inc. in San Leandro, a city bordering Oakland. It is one of the largest gun stores in Northern California. The Bureau of Alcohol, Tobacco and Firearms (ATF) frequently traces guns bought by criminals back to Traders, says James Dower, chief of the ATF Oakland office.

This is the story of how Anthony Cucchiara, the owner of Traders, has flourished, even after once losing his license to sell firearms because of "gross disregard" of the law; how he used a loophole in the federal gun law to keep his store open until federal prosecutors abandoned efforts to close it down; and how, despite repeatedly making questionable gun sales, remains untouched both by local police -- who are some of his best customers -- and by ATF agents.

In the end, it is a story about gun laws that critics say have no teeth, that allow gun merchants to profit and prosper by selling weapons of death to virtually anyone willing to pay the price.

Criminal Purchasers

In the fall of 1992, ATF inspectors went through Traders' sales records for the first time in six years.

They found nearly 300 gun sales that they suspected involved violations of federal laws. Most of the purchasers bought multiple assault rifles and high-powered handguns, federal records show.

But ATF agents gave Traders high marks during the inspection, concluding the store had an "excellent record-keeping system." The ATF had no proof that salespeople at Traders knew that guns had been sold to ineligible purchasers.

High praise for Traders' record-keeping is a marked improvement. Federal officials first tried to get Traders to stop selling guns fifteen years ago, citing a record-keeping system so sloppy the store couldn't account for some 200 guns.

But Cucchiara, the store's owner, managed to keep his license after a four-year legal battle. Since then, a CIR review of official documents shows, Traders has repeatedly been connected to improper gun sales (click here for chronology):

-- A San Francisco police inspector wrote in 1992 that Traders had sold more than 800 handguns to a man who in turn sold them "by the case" on the streets of San Francisco. The man peddles the guns to "kids and dope dealers," Inspector Ken King said in an interview. The man purchased the guns using an improper license -- one that allowed him to collect curios and relics, King said. Under federal law, Traders salespeople should not have sold the man firearms that were not classified as collector's items by the ATF without asking him to abide by California's 15-day waiting period, as well as state and federal firearms registration requirements, said ATF lawyer Larry Nickell. [The ATF investigated the case. The man was indicted on one count of dealing firearms without a license and served one year in a federal prison. No action was taken by the US Attorney's office against Traders'.]

-- A man convicted last year in a case that involved his supplying firearms to a notorious Oakland gang boasted during a phone conversation wiretapped by federal investigators that he could buy guns "on the under"at Traders. The man explained during an interview that an employee at the store sold guns with the serial numbers scratched off. ATF agent Dower said the agency has not been able to substantiate the man's claim.

--There have been accusations that Traders has permitted "straw sales" of guns (that is, to people who are merely "fronts" for illegal purchasers). In 1992, ATF agents identified 24 people, all ineligible to purchase guns, who were suspected of getting their guns from Traders through straw sales.

--There have been instances of sales to minors, which is prohibited by law. A teenager blinded a man in the eye in 1987 with a paint-pellet gun bought from Traders; the victim later won a $350,000 settlement from the store, his attorney said. In 1983, a San Leandro police detective reported to the AFT that a minor bought two handguns there.

The record of questionable sales has hardly hampered Traders' business. Boasting the lowest gun prices in the Bay Area and maintaining an inventory of 10,000 firearms, Traders draws a phenomenal number of customers from both sides of the law. In its over-the-counter retail business, its wholesale business to other gun dealers and its international police supply business, Traders sold 22,363 weapons in 1992.

Owner Cucchiara declined to be interviewed at length for this article, saying that because the media favor gun control, his side is never fairly represented. He also said that no one was interested in the "ancient history" of his gun business and that Traders wouldn' t have remained in business for the past 35 years if he or his employees had broken any laws.

But federal officials say the battle they have had with Traders illustrates how difficult it is to regulate gun dealers under federal laws.

Under the Gun Control Act passed [29] years ago, it is not enough for the ATF to prove a gun dealer sold guns in violation of the law. The government must also prove that the dealer intended to break the law, that the violation was more than a careless mistake.

"Most gun dealers who would have a propensity to turn a blind eye are smart enough to realize they arenít going to do anything like that in front of witnesses," says ATF agent Dower. "So where do you go for the information?"

And even when federal officials prove their case (as they did in the early 1980s, when the courts agreed that Cucchiara had violated the law) that may not be enough. George Stoll, one of the prosecutors involved in the case then, says federal officials have concluded that -- because of the weakness of federal laws -- it is " more or less impossible" to shut down a store as large as Traders.

Loophole for Gun Dealers

traders About 15 years ago, federal officials decided it was time to close down Traders' gun business. The store had such a bad record-keeping system that Cucchiara couldn't account for 200 guns that were supposed to be in his stock, documents show. Also, many guns sold were traced back to ineligiblepurchasers.

But when ATF agents decided not to renew Cucchiara's license, they found shutting down the store no easy task. Cucchiara immediately went to court, trying to overturn the decision. In October 1979, U.S. District Judge Samuel Conti ruled that Traders had been involved in "hundreds of violations" of the law and that violations continued even after the store was put on notice in 1973 that any new violations might be considered evidence Traders was "willful" in violating the law.

ATF attorney Nickell says the agency normally gives a store a chance to correct violations before shutting it down. Only if the dealers do not heed the warning, he adds, will ATF move to revoke their license, and then, the dealers are "headed out of business."

Cucchiara may have been headed out of business, but he never got there. He tried, without success, to get Judge Conti to delay enforcing his decision, while Cucchiara appealed. He contended then -- and, in a recent telephone interview, repeated his claim -- that the violations amounted to nothing more than employee errors that should be expected when a store sells as many guns as Traders does.

But Conti's refusal to delay enforcement of his decision did not mean the end for Traders. Two days after Conti's decision, a friend and former employee of Cucchiara's named Everett Studley applied for a license to run Traders' gun store. Studley filed papers showing that he had bought the firearms business for $400,000 from Cucchiara.

The ATF granted the license, after Studley promised that Cucchiara would have nothing to do with the firearms business. By law, the ATF cannot legally deny a firearms license to a person merely because he is a friend of a person whose firearms license has been revoked. That is true even if the applicant intends to conduct business in the very store owned by the person stripped of his license, Nickell says.

For more than a year, Traders continued selling firearms as if nothing had happened. Cucchiara owned the store -- which sold camping and fishing equipment -- and Studley was listed as owner of the gun department.

Then, U.S. attorney G. William Hunter stepped in and wrote to the Treasury Secretary, protesting that by giving Studley his license, the ATF had made futile all the work done to put Cucchiara out of business.

In 1981, the U.S. Court of Appeals upheld Conti's ruling that Cucchiara's license should not be renewed. The ATF then took away Studley's license, concluding that he was merely a "sham" for Cucchiara.

But Cucchiara and Studley filed a $5 million lawsuit against federal officials, charging that their civil rights had been violated. On March 24, 1983, the suit was settled: Traders could continue to sell guns on the condition that Cucchiara close the store for 30 to 45 days.

Assistant U.S. attorney Stoll has a simple explanation for why government officials agreed to the settlement: They concluded they could not keep Traders out of business because of the weakness of federal laws. "He can come up with a new applicant faster than you can come up with revocations," says Stoll. "It's like a joke."

Getting Cucchiara to stop selling firearms for a brief period of time was the best deal the government could get, Stoll concluded.

Murder on the Freeway

Traders Five years ago, when a bullet blew off the back of her husband's head as she sat beside him in their Honda Prelude, Sharon Ellingsen knew nothing about gun dealers or gun laws. In 1991, after suing Traders, the dealer that had armed her husband's killer, she received $400,000 in an out-of-court settlement.

"It wasn't the money,"says the 55-year-old Ellingsen, leaning against the kitchen counter at her home in Newark, California.
"Naive as I was when I went into that lawsuit, I was hoping to put a padlock on Traders' door."

Larry Ellingsen was killed on December 3, 1988, as he and his wife were returning home from a dinner celebrating their 29th wedding anniversary. The Ellingsens were driving in the middle lane of a three-lane highway; a car driven by Darryl Poole was in the far-right lane.

Fifteen-year-old Nioqua Know sat next to Poole as he drove along the Nimitz Freeway in Oakland. She testified in court that she had told Poole at least twice that she had to use a bathroom. When the traffic slowed near the 14th Street exit, Poole announced that he would make the traffic speed up. He reached under the seat and grabbed an assault rifle. While Knox held the wheel, 19-year-old Poole pulled the trigger.

When the bullet smashed through the Honda's rear window shattering it, Sharon Ellingsen thought someone had thrown a bomb into the car. She turned to look at her husband and saw him slumped over the wheel. The car swerved, and she saw the speedometer register 85 mph. Grabbing the wheel she screamed, "Lord help me," and begged her husband to wake up.

Covered with her husband's blood and trying to steer clear of the other cars, Sharon Ellingsen took one hand off the wheel and grabbed her husband's knee. She managed to pull her husband's foot off the accelerator and, as the car slowed down, steered it to the side of the highway and pulled the emergency brake.

"Before I got out of the car, I took Larry's pulse," Ellingsen says. "I was sure he was dead because his ear was almost sitting on his shoulder, and you could definitely see that too much had been blown away for anyone to survive that."

Just after midnight on December 4, 1988, Larry Ellingsen was pronounced dead at the age of 53. Poole was convicted of second-degree murder for the shooting and is now serving a prison sentence of 20 years to life.

Poole and a friend, Marvin Grant, had purchased the assault rifle used to kill Ellingsen at Traders a month before the murder, said Oakland police. Grant told Oakland police he had purchased the gun for Poole.

Grant told Larry Boxer, one of the attorneys representing Sharon Ellingsen in her lawsuit against Traders, that Poole asked the sales clerk questions about the gun, paid for it and took possession of it when the sale was complete, but it was Grant who showed the salesperson his driver's license and signed the federal firearms transaction form that asks purchasers several questions to determine whether they are eligible to buy guns, Oakland police said. The men left the store not only with the assault rifle, but with 100 rounds of ammunition and three black ski masks.

In response to the lawsuit, Cucchiara's attorney, William T. Mulvihill, wrote that employees at Traders were unaware Grant was purchasing the weapon for Poole, if that was indeed what had happened. And, nearly all -- if not all -- responsibility for the murder rested with Poole, Traders contended. Still, it was Cucchiara's insurance company that paid Sharon Ellingsen $400,000, Boxer said. After interviewing Cucchiara, ATF agents concluded they could not establish that Traders had knowingly made a straw sale, ATF documents show.

A 'Candy Store' for Police

Police actually go to Traders all the time -- to buy weapons. Traders offers law-enforcement agencies and individual officers special discounts.

Traders is the largest police supply distributor in the western United States, Cucchiara says. In a 1990 deposition taken in connection with the lawsuit filed by Ellingsen, he stated that he provided weapons to about 300 law-enforcement agencies throughout the United States and overseas. He also said that he supplied firearms to most of the police agencies in the Bay Area.

Mike Shepard, who was employed at Traders from 1973 to 1976, says that Cucchiara is friendly with police and has created a "policeman's candy store" through his special discounts. When Shepard worked at Traders, some of his best customers were police, correctional officers and agents from the ATF, FBI and CIA, he says.

Cucchiara said in the 1990 deposition that his relations with law-enforcement officials have served him well: Former officers are willing to check to see whether a potential Traders' employees have clean records.

While federal officials try to respond to the public's growing support of gun control without alienating gun advocates, Traders continues to sell guns. One day when Alameda County Sheriff Charles Plummer -- who has purchased weapons at Traders -- was in the gun store, he struck up a conversation with a young man standing next to him. As Plummer recounted the story during a public hearing, he pointed to the Chinese assault weapon the young man was examining and said, "Gee, that's a lousy looking weapon. How come you're buying that piece of junk?"

"Oh, this is a fine weapon," the young man said. "It doesn't look good, but it really shoots."

"What kind of game do you shoot with this thing? I mean, I'm an old deer hunter. I used to go deer hunting when I was a kid," Plummer said. "Is this for elk or moose?"

"No," the young man replied, "this is for killing people."

Aura Bland was a 1993 CIR research associate working under a Pacific Center for Violence Prevention grant from the California Wellness Foundation.

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