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Tuesday, April 29, 2003 - Page updated at 12:00 AM

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Errant gun dealer, wary agents paved way for Beltway sniper tragedy

Seattle Times staff reporters

Gun dealer Brian Borgelt says he doesn't know how his store ended up arming the Beltway sniper suspects with a deadly accurate $1,600 military-style carbine.

But law-enforcement sources, for the first time, explain what happened: Not only did sniper suspect John Muhammad hone his marksmanship at Bull's Eye's firing range, but alleged accomplice Lee Boyd Malvo has told investigators he shoplifted the 35-inch-long carbine from the supposedly secure store.

The Bushmaster XM15 had been prominently displayed last summer at Bull's Eye. Next thing Borgelt knew, federal agents were swooping in, seeking the federal sales record that would show who bought the laser-scoped rifle.

Borgelt had no sales record. Nor could he produce records for scores of other missing guns.

Bull's Eye's negligent operation and the government's timid enforcement of errant gun dealers contributed to the tragedy, according to recently released documents from the Bureau of Alcohol, Tobacco and Firearms (ATF) and numerous interviews with current and former agency employees.

Long before last fall's sniper slayings, Bull's Eye was among a minuscule group of problem gun dealers that, willingly or not, "supply the suppliers" who funnel guns to the nation's criminals, the ATF says. Studies show about 1 percent of gun stores sell the weapons traced to 57 percent of gun crimes.

As a result, these few gun dealers have a vastly disproportionate impact on public safety.

In theory, such dealers cannot hide from enforcers. In the early 1990s, the ATF developed indicators, or red flags, that alerted it to gun dealers that might be illegally trafficking in guns.

Bull's Eye displayed every one of these indicators for years:

• Guns stolen from inventory.

• Missing federal sales records, needed by police to solve crimes.

• Having 10 weapons a year traced to crimes.

• Frequently selling multiple guns to individual buyers.

• Short times between gun sales and their involvement in crimes.

An analysis of records obtained by The Seattle Times through a freedom-of-information lawsuit against the ATF shows that between 1997 and 2001, guns sold by Bull's Eye were involved in 52 crimes, including homicides, kidnappings and assaults — a rate the ATF considers alarming.

"What you have in front of you is a case study in what is wrong with this system," said Jerry Nunziato, a former director of the ATF's National Tracing Center who reviewed Bull's Eye's 283-page file.

"This shop has all of the obvious indicators that something's wrong. When the bureau looked at it and found the problems were true, nothing was done."

Four inspections in five years

On average, the ATF looks at less than 4 percent of dealers in a year. But the agency inspected Borgelt's operation four times in five years — 1998, 2000, 2001 and 2002 — and cited it for violations at least 15 times.

"He had a lot of attention," said Richard Van Loan, the ATF regional director for industry operations in Seattle. "The guy wasn't ignored."

But Borgelt is open for business today, even though he can't account for 238 guns or say whether they were stolen, lost or sold, or if their buyers underwent felony-background checks.

Borgelt blames this problem on employees who didn't record sales, fill out required federal forms, or simply stole the guns.

With thousands of dollars in possible inventory thefts, he managed to thrive in an industry known for paper-thin profits. Federal prosecutors offer a possible explanation:

They allege that Borgelt hasn't filed personal or business federal tax returns for eight years, while making estimated tax payments of only $10,500. During this time he purchased his store's $350,000 building and a $400,000 house on American Lake in Lakewood, Pierce County.

Borgelt says he's done nothing illegal. He says he tried to get control of Bull's Eye's paperwork and inventory, but the store expanded too quickly, employees came and went, and he didn't get them to follow federal regulations.

"Yeah, these are excuses," he said during a lengthy interview. "But, dammit, these are my excuses."

Easy to get federal firearms license

Bull's Eye Shooter Supply — "The Biggest Little Gun Shop Around" — is a brick building a few blocks from the Tacoma Dome, with a two-story frieze of an African savanna populated by big game. Dominating the mural is a huge water buffalo bracketed in a telescopic sight, its crosshairs superimposed on the bull's left eye.

A customer today can walk into the sprawling shop and buy a Bushmaster XM15 semiautomatic carbine or just about any other legal gun of choice. Upstairs at the firing range, you can shoot pistols at one of 12 lanes while benefiting from such deals as "Mondays — Ladies Shoot Free!!" or "Children under 12 yrs. shoot FREE with an accompanying adult."

Borgelt, a fit, 38-year-old former Army Ranger, got his first federal firearms license in 1986. It was easier than obtaining a driver's license. He had to fill out and sign a form swearing that he was over 21, didn't have a felony record, give a business address — home or apartment sufficed — then pay the license fee: $10.

At the time, there were more than 250,000 licensed gun dealers in America, about half of them not doing any retail business at all. Instead, they were doing what Army Staff Sgt. Brian Borgelt was doing, using the license to get inexpensive weapons for himself and his buddies in the 2nd Ranger Battalion at Ft. Lewis.

He called his business Pacific Shooters Supply and ran it out of his Tacoma home, quietly at first.

The first visit from ATF

In November 1994, ATF inspector Eric Younger, unannounced, knocked on Borgelt's door to ask about the sale of an AK-47-style assault rifle at a Yakima gun show.

The assault rifle was part of a criminal investigation, and Younger was tracing its owners.

No one answered, but Younger found a note saying Pacific was now closed and referred customers to Bull's Eye Shooter Supply. Borgelt had become a partner in Bull's Eye with Charles N. Carr, an Army buddy who's now a police officer in Bridgeport, Conn.

Suddenly, Younger had another issue to check with Borgelt — whether he had turned in Pacific's license.

Younger still had to trace the assault rifle, a cumbersome process. There is no registry or centralized filing system to trace guns as there is with cars. If a getaway car is found after a bank robbery, police can quickly use its license plate or its vehicle ID plate (in plain sight on the dashboard) to determine its current owner and begin investigating the crime.

And unlike cars, guns aren't registered. To track a suspicious weapon, the ATF must first send its serial number to the manufacturer to learn to which licensed dealer the gun had been sold. The ATF then assigns its closest field office to contact the dealer, review the federal sales form and find out who bought the weapon.

During its investigation, the ATF learned the Yakima assault rifle was owned by a woman who told agents that she had purchased it at a gun show from a dealer named Brian Borgelt.

Individuals selling guns at gun shows do not have to document the sale or do a background check on the buyer. But dealers at gun shows, by law, must.

When Younger asked him about the rifle, Borgelt denied ever owning it.

The inspector doubted him, though, since Younger had also located the man who sold the rifle to Borgelt — at another gun show — as well as the woman who bought it.

Younger also confronted Borgelt over his individual dealer's license, which the law said he should have surrendered when he joined in with a partner and opened Bull's Eye. The partnership was required to have a separate license and pay the fee, now $200.

Penalty: only a note in ATF file

The ATF inspector later wrote up Borgelt for not recording the gun-show sale and for improperly mailing in felony background-check forms.

Younger had to decide how to punish Borgelt for breaking the law. If Borgelt's violations had occurred a decade earlier, he might have been charged with a felony. The 1968 Gun Control Act, which Congress passed in wake of the assassinations of Sen. Robert F. Kennedy and the Rev. Martin Luther King Jr., set standards for gun dealers. They had to maintain sales records so police could trace crime guns, refuse to sell to felons or minors, and follow other safeguards.

Since then, Congress loosened certain gun-control provisions. In 1986, President Reagan signed the Firearm Owner's Protection Act, a law pushed by the gun lobby, which reduced most record-keeping violations to misdemeanors and required that the ATF prove that dealers "willfully" violated the law before revoking their licenses.

Also, ATF could inspect dealers only once in 12 months unless it had evidence of a crime.

In Bull's Eye's ATF file, Younger noted to future inspectors that when they visited Borgelt again "any subsequent violations of these specific regulations should not be found upon inspection at his new business."

That was the extent of the punishment.

Inspectors returned to Bull's Eye in 1998. Under the Clinton administration, the ATF began focusing inspections on dealers that showed warning signs of sloppy operation or misconduct.

That year, the ATF ordered inspections of the 87 licensed gun sellers that had reported four or more stolen or missing guns in the previous three years. While it wasn't the worst offender, Bull's Eye was the only one in Washington state. It had reported eight.

ATF sent another inspector, Clinton Bonney, to conduct the audit. He found that the dealer couldn't produce federal sales records for four guns no longer at the store, records show. Even so, he noted for the file that Bull's Eye had "very complete and accurate records."

Borgelt said Bonney's praise may have led him to drop his guard.

He and his employees were supposed to log each new gun acquisition and sale in a ledger, fill out a federal firearms-transfer form, and note results of background checks.

Whether deliberate or not, Borgelt let the filing fall apart.

Most dealers go many years without being inspected again. But ATF inspectors were back at Bull's Eye in June 2000.

"We just weren't taking a shot in the dark," the ATF's Van Loan said. "There were indicators that we needed to take a look at it."

Spike in crime guns, other red flags

In fact, the number of crime guns traced back to Bull's Eye had been growing from three in 1997 to 10 in 1998, 18 in 1999, and 11 in 2000.

This likely sparked the ATF's scrutiny, said Joseph Vince, former chief of the ATF's Crime Gun Analysis Branch and partner in Crime Gun Solutions, a Frederick, Va., consulting firm. "There's a spike in crime guns. Something wasn't right."

Several of the weapons traced back to Bull's Eye were associated with violent crimes, including one of Washington's most heinous mass murders, the Trang Dai Cafe killings in Tacoma.

On July 5, 1998, four gunmen burst into the Tacoma restaurant and opened fire, killing five diners and wounding five others. Detectives blamed it on warring Asian gangs. When Tacoma police searched the home of one of the suspects, they found an AK-style assault rifle that matched the caliber of one of the murder guns, although it had not been used in the killings. Bull's Eye had sold it three months earlier.

Bull's Eye displayed two other red flags.

Between 1997 and 2000, Bull's Eye had sold 663 guns to 265 individual buyers — sometimes as many as 10 guns at a time, ATF records show.

Vince said these were a remarkable number of "multiple firearms sales" and an indicator that buyers might be reselling the weapons on the street.

Felons are barred from buying guns from retail dealers, so they either have to buy them from individuals, steal them, or employ "straw buyers" with clean records to purchase the guns for them.

If guns from a particular dealer quickly and frequently are used in crimes or possessed by criminals, the ATF gets suspicious.

The ATF's median "time to crime" for traced weapons — from time of purchase to recovery by police — is about 6-1/2 years. A dealer with many weapons with a "time to crime" under three years raises a red flag for the ATF, which may assign inspectors to take a look.

Seventy percent of Bull's Eye's traced crime guns fell under the three-year time to crime — clearly of concern to the ATF, according to a Times analysis of the 52 traces of Bull's Eye-supplied guns between 1997 to 2001. So it was not surprising that inspector John Dimond and others began a compliance audit of Bull's Eye, starting in May 2000.

Dimond quickly determined that Borgelt was unable to account for 421 guns — nearly a quarter of his inventory, ATF records show. Other firearms dealers say this is a staggering number. A dealer typically might have missing records for only a couple of gun sales over many years.

Dimond's routine 8-hour audit turned into a major review with several inspectors working 186 hours at the Tacoma gun store over two months.

Lax reporting of thefts, other violations

Borgelt was cited for nine record-keeping violations.

Then the ATF took one of the toughest actions it can use against a dealer, short of revocation: It ordered Borgelt to appear at a warning conference.

"The significance of the violations found at your premises raises a serious question as to your willingness and / or ability to conduct business in accordance with laws and regulations," an ATF official wrote in a July 2000 letter to Borgelt. "As a result, we are contemplating the revocation of your Federal Firearms License."

At the August conference, Borgelt promised to clean up his books and said he planned to computerize his inventory records. He assured the ATF that no more violations would occur.

In the meantime, he had found records or proved sales for 201 of the unaccounted-for guns, bringing the tally of the missing weapons down to 220 and finally, a year later, to 160.

Federal law requires that a dealer must report a missing or stolen gun to the ATF and local police within 48 hours of the discovery of its disappearance.

It took him a year to file the report with ATF, claiming he was still trying to find the guns.

He never did file one with Tacoma police. Borgelt blamed an employee for the lapse.

Former employees of Bull's Eye said that during their time there things were run by the book. "I always saw the paperwork done correctly," said Carl Shanks, an employee in 1997 and 1998 who is now a sheriff's deputy for Pierce County.

Again, the ATF had to weigh Borgelt's punishment.

In a follow-up letter Aug. 31, 2000, an ATF supervisor told Borgelt that future violations would be viewed as "willful in nature and may result in revocation of your license." ATF planned to inspect him again "to ensure your compliance."

ATF authority shackled by Congress

Despite Bull's Eye's history of breaking the rules, ATF did not revoke his license. The warning letter the agency sent Borgelt was its only other option; Congress has never given the ATF the authority to suspend or fine an errant gun dealer.

ATF also chose not to refer the violations to prosecutors. Federal prosecutors are reluctant to bring misdemeanors to court when there are more serious felony crimes to pursue.

And felony charges against a gun dealer are even rarer because prosecutors must show the dealer willfully violated the law, a difficult burden to prove.

Further, the ATF considered Bull's Eye's 2000 meltdown as its first major offense, said Van Loan of the Seattle ATF office. Borgelt was given a chance to fix problems. "It was a judgment call at that time," Van Loan said.

Weighing heavily, he said, was that Borgelt and his 14 employees would lose their livelihoods if the ATF went through the time-consuming process of pulling its license. "Revocation is forever," Van Loan said.

Borgelt did make improvements, which were noted in a July 2001 follow-up inspection. But Van Loan said that, in retrospect, the audit had problems. It was conducted by a new inspector and could have been more thorough.

Also, Van Loan said a serious lapse was failing to bring Borgelt's misconduct to the attention of top officials in the Seattle ATF office.

At the same time, the ATF was shifting focus to explosives and terrorism, the result of the December 1999 arrest of Ahmed Ressam, the Algerian terrorist caught coming into Washington with a trunkload of explosives.

"If we hadn't been distracted, we would have been down there and I think we would have found something," Van Loan said of Borgelt. "... He got past us in 2001."

The ATF cited Borgelt for two record violations in 2001. And he was allowed to keep selling guns.

Missing gun tied to sniper shootings

In October 2002, sniper suspects John Muhammad and Lee Boyd Malvo were arrested outside Washington, D.C., following 23 days of terror that left 10 dead and three wounded. Police found the Bushmaster rifle in the trunk of their blue Chevrolet Caprice.

The ATF's National Tracing Center quickly determined the gun had been sold by the manufacturer to Bull's Eye in July 2002.

When FBI and ATF agents descended on his store, Borgelt recalled, there was a long silence when he told agents his records showed the gun was still on the shelf.

Borgelt's claim that he never knew the gun was missing has been met with incredulity. The expensive weapon, fitted with exotic accessories, had been prominently displayed.

"It would be like being a car dealer and having a Cadillac disappear from the sales floor without anybody noticing," said Vince, the former ATF official.

The missing paperwork on the sniper rifle prompted yet another audit by the ATF, which determined that another 78 firearms from the shop could not be accounted for.

Former ATF supervisors say Borgelt's federal license should have been revoked after the disastrous 2000 audit.

"He's a poster boy for gun control," said William Vizzard, a retired ATF supervisor and California State University, Sacramento, criminal-justice professor who wrote "In the Crossfire: A Political History of the Bureau of Alcohol, Tobacco and Firearms."

"But it doesn't surprise me he's still in business. The agency is always conservative, because they're afraid. They have no backing in Congress or this administration."

The ATF has been "kicked around" by the National Rifle Association for so long, Vizzard said, that it shies away from confrontations that might attract NRA's ire.

Art Gordon, a 27-year ATF veteran in Baltimore, helped investigate the Beltway sniper slayings.

"For years, ATF got beat into the ground by the NRA and got gun-shy," said Gordon, speaking as president of the ATF branch of the Federal Law Enforcement Officers Association. "They are leery of being aggressive on federal firearms licenses."

Revocations take time. Dealers can appeal while staying in business. The 1986 law also gave gun dealers the right to go before a federal judge and review the entire matter all over again. Usually, a federal agency's administrative actions can only be reversed when the other party can show the government acted arbitrarily.

The bureau is also hamstrung by a lack of resources. In 2000, the agency had 440 compliance inspectors responsible for overseeing not only the 83,000 federal firearms licensees, but also hundreds of explosives manufacturers and dealers and thousands of liquor and cigarette manufacturers and distributors.

All these hurdles have made ATF reluctant to revoke licenses except in the most serious cases, said Kristen Rand, legislative director for the Violence Policy Center in Washington, D.C., which tracks firearms policy.

"Dealers understand that," Rand said. "You really have to do something egregious and outrageous to initiate revocation proceedings."

In 1999, the ATF revoked just 20 firearms licenses.

The sniper killings may have finally tipped those scales against Borgelt.

ATF investigators have asked the U.S. Attorney's Office in Seattle to file a rare felony charge against the gun dealer for willful disregard of gun laws, said a source who spoke on the condition of anonymity. No charges have been filed.

Borgelt's lawyer, James Frush, says there are no grounds for criminal charges. His client is only guilty of being a sloppy businessman, Frush says, and was given bad advice by the ATF on how to keep records.

As for his tax returns, Borgelt says any money owed has been paid and an accountant is getting his tax forms in order.

Meanwhile, he says he may just stop being a gun dealer, sell his store and concentrate instead on running his pistol range.

"I've given it my best go," he said. "But it's grown exponentially into something I can't chew."

Mike Carter: 206-464-3706 or mcarter@seattletimes.com

Steve Miletich: 206-464-3302 or smiletich@seattletimes.com

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