Firearms charges reveal a mystery http://www.denverpost.com/news/news0605b.htm
By David Olinger
Denver Post Staff Writer
June 5, 2000 - For 20 years as a licensed firearms dealer, Trader Jim Gowda
traveled from gun show to gun show, selling thousands of guns without
paperwork.
One employee at the U.S. Bureau of Alcohol, Tobacco and Firearms office in
Denver called Trader Jim's traveling business the largest gun-trafficking case in
history.
Another wrote that hundreds of guns were traced from suspected criminals to a
single Colorado dealer.
Another reported Gowda had sold thousands of weapons at gun shows in
Colorado and other states, yet had only a handful of federal sales forms
identifying customers.
Gowda maintains he was just taking his personal weapons collection to the
shows, and he didn't know federally licensed dealers had to document all their
sales.
Until recently, "I doubt that 80 percent of the dealers knew you had to keep a
record of your personal sales," he said.
Last November, a federal grand jury decided Gowda's business method was
illegal.
Its indictment reads like a simple case against a firearms dealer accused of
selling eight guns in ways that violated federal laws.
Behind the case lies this puzzle: How did Trader Jim manage to sell guns as a
federally licensed firearms dealer for 20 years in a manner authorities now claim
was criminal? And how did he license his house as a gun business 10 times in a
Denver suburb that prohibited selling guns from a house?
Gowda declined to estimate how many personal guns he has sold in the last 20
years, saying he had been advised not to discuss the details of his case. But his
lawyer, Joe St. Veltri, described Gowda as a man caught in a changing climate of
law enforcement, particularly after the Columbine High massacre focused media
and public attention on private sales at gun shows.
Alcohol, Tobacco and Firearms "now focuses some of its law enforcement efforts
in an area that they had ignored," he said. "I think gun shows, in the last two
years, have become the most important concern of ATF."
Gerald Petrilli, ATF's enforcement chief in Denver, agreed that firearms dealers
are getting hauled into federal court more often these days. But that, he said,
is a result of improved manpower and investigative techniques as well as a
more aggressive enforcement strategy.
In the early 1990s, when 280,000 people were licensed to sell guns in the
United States, a dealer might see an ATF inspector once a decade, Petrilli said.
Moreover, an ATF policy allowed agents to investigate a gun show only if they
could show probable cause that a particular seller was violating federal laws.
Given such limitations, ATF regulation of firearms dealers "was a disaster, as far
as I was concerned," Petrilli said, adding that enforcement has improved
significantly.
In September 1996, 16 years after ATF licensed Gowda to sell firearms, its
agents raided his Arvada home, finding a silencer and 227 guns in the
basement. Federal prosecutors seized all but four of those guns, claiming they
were acquired improperly.
During the raid, agents reported finding tax forms showing that James and
Sharon Gowda listed annual income of only $2,005 to $5,942 in the previous
five years from their gun show business. They also reported finding $41,000 in
cash; platinum, gold and silver bars and coins worth "tens of thousands of
dollars;" art, jewelry, hundreds of knives and several hundred thousand rounds
of ammunition.
The agents left with the guns and all the records they could find. Gowda
returned to the gun-show circuit, where he sold guns for three more years
before a grand jury indicted him.
He continued selling guns after the indictment.
Trouble early on
Gowda, 57, began selling guns as a young man in Colorado, where he first ran
afoul of federal gun laws in 1978. A federal grand jury indicted him and an
associate, Waldemar Drwall, on charges of dealing guns without a license and
selling handguns to people who did not live in Colorado.
Gowda pleaded guilty to one charge, selling a handgun to a Wyoming resident.
The judge then permitted him to enter a pretrial diversion program, and the
indictment was dropped.
By 1980, Gowda was back in business as a federally approved gun dealer. His
licensed business location: 6129 Lee St. in Arvada, in a middle-class
neighborhood. ATF renewed his license in 1981, 1982, 1983, 1984, 1987, 1990,
1993, 1996 and 1999.
Gowda and his wife, Sharon, traveled to gun shows throughout the West during
those two decades, selling under the name Trader Jim's. He bought guns from
people at the shows and sold them to other gun show customers.
According to his lawyer, Gowda regarded these as private trades of used guns at
informal gatherings, distinguishing them in his own mind from federally
regulated sales of new guns shipped to a dealer's store. In his view, "he was
selling from his private collection and buying for his private collection," St. Veltri
said.
Federal law permits private collectors to sell at gun shows without paperwork or
background checks. At the same time, licensed firearms dealers are required to
call for a background check on every gun show customer and keep a record of
each sale.
According to records filed in federal court, ATF realized at least a decade ago
that Gowda was treating gun show sales as private transactions. In February
1990, agency inspector Melanie Shea visited his home, examined his records
and gave him a warning.
"As part of the inspection, gun show regulations were thoroughly reviewed with
James Gowda," ATF agent Kenneth Coffey wrote. "He was therefore on notice of
his rights and obligations as a firearms dealer at that time." Coffey wrote that 6
1/2 years later, in an affidavit seeking permission to search Gowda's home.
By then, undercover agents and confidential informants had reported buying
handguns from the Gowdas without background checks or sales forms at gun
shows in Fort Collins, Adams County, Grand Junction, Aurora, Las Vegas,
Phoenix and Tulsa. In one case the agent reported getting a handwritten receipt
from Gowda, sign ed "Jim Phillips." Few ATF forms filled out
Federal law requires firearms dealers to keep a record of each gun sale on a
yellow sheet known as Form 4473. In Colorado, that form typically holds the
only record of the retail customer if the gun is used in a crime.
The September 1996 raid of the Gowdas' basement found notebooks with
"handwritten entries listing thousands of firearms purchases and sales over the
past 10 years," but "only a handful of ATF Form 4473s," Coffey wrote.
Federal law has required background checks on every customer buying a
handgun from a firearms dealer since 1994, and on all dealer sales since 1998.
The Colorado Bureau of Investigation told Coffey that Gowda called to check on
just 15 customers from 1994 to 1996.
Federal law also requires firearms dealers to document the guns they buy and
sell in an "acquisition and disposition book" separate from their sales forms.
ATF kept all but four of 227 guns found in the Gowdas' basement, claiming a
lack of documentation. Three of the 227 guns had been reported stolen, one
just months earlier in Lakewood.
Chris Eastburn, an inspector specializing in gun-trafficking cases, spent a year
poring over the scraps of information seized in the raid, creating a giant
computer file and an estimate that Gowda had sold perhaps 10,000 guns
without paperwork. In a July 1999 memo, he described Trader Jim's business as
"the largest criminal case we know of involving gun trafficking."
Eastburn entered the serial numbers of thousands of guns that had passed
through Gowda's hands into ATF's national "suspect gun database," in case they
turned up later in criminal arrests.
According to a memo from Petrilli, the Denver office chief, many did. Hundreds
of gun traces are "reflected in the growing body of evidence in this case," he
wrote, documenting that a licensed dealer participated in sales "traced to
firearms possession by convicted felons," as well as gun seizures "connected
with suicide, firearms and drug-related crimes."
In an interview, Petrilli said ATF routinely entered Trader Jim's identifiable sales
into its suspect gun database because "Mr. Gowda, as far as we're concerned,
was trafficking guns all over the place." At the behest of federal prosecutors,
Petrilli declined to answer other questions about the case.
ATF allowed the Gowdas to remain in the gun business for years after the raid,
apparently in the hope that, as agent Coffey wrote, they would "cooperate
pro-actively in the future" about others in the gun show community.
In 1999, ATF even renewed Trader Jim's license.
For two decades, that license has been issued to Gowda's home. According to
Arvada planning and zoning officials, every renewal violated a city zoning
ordinance precluding retail sales from residences.
"In Arvada you can't sell guns from the house," said Mike Elms, the city
planning director. "It's been that way at least since 1979." In the mid-1990s,
ATF sought to improve its inspections of retail gun businesses by reducing the
huge number of "kitchen table" dealers who had licensed their homes. It did so
by requiring dealers to attest under perjury penalties that state and local laws,
including zoning ordinances, permitted gun sales at their licensed premises.
Additionally, gun dealers were required to send a copy of the license application
to the local police chief.
Gowda did. In 1996 and 1999, he sent Ron Sloan, Arvada's police chief, an
application listing a single-family home as the licensed premises of his gun
business, along with a notation that he would be selling "mostly" at gun shows.
But Sloan said he was unaware that Arvada ordinances prohibit gun sales from
homes, so an application listing a residential address "would not necessarily
raise a red flag for me." Since ATF does not require police chiefs to sign or
return such applications, "all I do is receive them and file them," he said.
Familiar charges
The federal indictment of James Gowda, issued in November 1999 and revised
in February, contains a familiar charge. As in 1978, he is accused of selling a
handgun to someone he knew lived in Wyoming. He is also accused of selling
guns to people without listing their name, age or address and of selling a gun
from his house to someone he knew was a felon.
According to the Colorado Bureau of Investigation, which has conducted all
background checks of Colorado gun buyers except for one four-month period
last year, Trader Jim has called for background checks on just 10 gun customers
since January 1999. Most of those came after he was indicted.
Federal regulations do allow a firearms dealer to sell a personal gun without a
background check, but only if he has owned it for at least a year and keeps a
record of the sale.
At trial, Gowda is expected to argue that many of his sales were personal, and
that the record-keeping requirements of ATF are convoluted and unevenly
enforced.
"Was he selling guns from his stock in trade, or was he selling from his private
collection?" St. Veltri asked. "Gowda's point is that the law is not of sufficient
clarity."
Meanwhile, St. Veltri hopes to move the trial out of Colorado, where a high
school massacre with weapons acquired privately at a gun show has been
followed by a referendum campaign to ban all private gun show sales.
"I was thinking Las Vegas," he said.
By David Olinger
Denver Post Staff Writer
June 5, 2000 - For 20 years as a licensed firearms dealer, Trader Jim Gowda
traveled from gun show to gun show, selling thousands of guns without
paperwork.
One employee at the U.S. Bureau of Alcohol, Tobacco and Firearms office in
Denver called Trader Jim's traveling business the largest gun-trafficking case in
history.
Another wrote that hundreds of guns were traced from suspected criminals to a
single Colorado dealer.
Another reported Gowda had sold thousands of weapons at gun shows in
Colorado and other states, yet had only a handful of federal sales forms
identifying customers.
Gowda maintains he was just taking his personal weapons collection to the
shows, and he didn't know federally licensed dealers had to document all their
sales.
Until recently, "I doubt that 80 percent of the dealers knew you had to keep a
record of your personal sales," he said.
Last November, a federal grand jury decided Gowda's business method was
illegal.
Its indictment reads like a simple case against a firearms dealer accused of
selling eight guns in ways that violated federal laws.
Behind the case lies this puzzle: How did Trader Jim manage to sell guns as a
federally licensed firearms dealer for 20 years in a manner authorities now claim
was criminal? And how did he license his house as a gun business 10 times in a
Denver suburb that prohibited selling guns from a house?
Gowda declined to estimate how many personal guns he has sold in the last 20
years, saying he had been advised not to discuss the details of his case. But his
lawyer, Joe St. Veltri, described Gowda as a man caught in a changing climate of
law enforcement, particularly after the Columbine High massacre focused media
and public attention on private sales at gun shows.
Alcohol, Tobacco and Firearms "now focuses some of its law enforcement efforts
in an area that they had ignored," he said. "I think gun shows, in the last two
years, have become the most important concern of ATF."
Gerald Petrilli, ATF's enforcement chief in Denver, agreed that firearms dealers
are getting hauled into federal court more often these days. But that, he said,
is a result of improved manpower and investigative techniques as well as a
more aggressive enforcement strategy.
In the early 1990s, when 280,000 people were licensed to sell guns in the
United States, a dealer might see an ATF inspector once a decade, Petrilli said.
Moreover, an ATF policy allowed agents to investigate a gun show only if they
could show probable cause that a particular seller was violating federal laws.
Given such limitations, ATF regulation of firearms dealers "was a disaster, as far
as I was concerned," Petrilli said, adding that enforcement has improved
significantly.
In September 1996, 16 years after ATF licensed Gowda to sell firearms, its
agents raided his Arvada home, finding a silencer and 227 guns in the
basement. Federal prosecutors seized all but four of those guns, claiming they
were acquired improperly.
During the raid, agents reported finding tax forms showing that James and
Sharon Gowda listed annual income of only $2,005 to $5,942 in the previous
five years from their gun show business. They also reported finding $41,000 in
cash; platinum, gold and silver bars and coins worth "tens of thousands of
dollars;" art, jewelry, hundreds of knives and several hundred thousand rounds
of ammunition.
The agents left with the guns and all the records they could find. Gowda
returned to the gun-show circuit, where he sold guns for three more years
before a grand jury indicted him.
He continued selling guns after the indictment.
Trouble early on
Gowda, 57, began selling guns as a young man in Colorado, where he first ran
afoul of federal gun laws in 1978. A federal grand jury indicted him and an
associate, Waldemar Drwall, on charges of dealing guns without a license and
selling handguns to people who did not live in Colorado.
Gowda pleaded guilty to one charge, selling a handgun to a Wyoming resident.
The judge then permitted him to enter a pretrial diversion program, and the
indictment was dropped.
By 1980, Gowda was back in business as a federally approved gun dealer. His
licensed business location: 6129 Lee St. in Arvada, in a middle-class
neighborhood. ATF renewed his license in 1981, 1982, 1983, 1984, 1987, 1990,
1993, 1996 and 1999.
Gowda and his wife, Sharon, traveled to gun shows throughout the West during
those two decades, selling under the name Trader Jim's. He bought guns from
people at the shows and sold them to other gun show customers.
According to his lawyer, Gowda regarded these as private trades of used guns at
informal gatherings, distinguishing them in his own mind from federally
regulated sales of new guns shipped to a dealer's store. In his view, "he was
selling from his private collection and buying for his private collection," St. Veltri
said.
Federal law permits private collectors to sell at gun shows without paperwork or
background checks. At the same time, licensed firearms dealers are required to
call for a background check on every gun show customer and keep a record of
each sale.
According to records filed in federal court, ATF realized at least a decade ago
that Gowda was treating gun show sales as private transactions. In February
1990, agency inspector Melanie Shea visited his home, examined his records
and gave him a warning.
"As part of the inspection, gun show regulations were thoroughly reviewed with
James Gowda," ATF agent Kenneth Coffey wrote. "He was therefore on notice of
his rights and obligations as a firearms dealer at that time." Coffey wrote that 6
1/2 years later, in an affidavit seeking permission to search Gowda's home.
By then, undercover agents and confidential informants had reported buying
handguns from the Gowdas without background checks or sales forms at gun
shows in Fort Collins, Adams County, Grand Junction, Aurora, Las Vegas,
Phoenix and Tulsa. In one case the agent reported getting a handwritten receipt
from Gowda, sign ed "Jim Phillips." Few ATF forms filled out
Federal law requires firearms dealers to keep a record of each gun sale on a
yellow sheet known as Form 4473. In Colorado, that form typically holds the
only record of the retail customer if the gun is used in a crime.
The September 1996 raid of the Gowdas' basement found notebooks with
"handwritten entries listing thousands of firearms purchases and sales over the
past 10 years," but "only a handful of ATF Form 4473s," Coffey wrote.
Federal law has required background checks on every customer buying a
handgun from a firearms dealer since 1994, and on all dealer sales since 1998.
The Colorado Bureau of Investigation told Coffey that Gowda called to check on
just 15 customers from 1994 to 1996.
Federal law also requires firearms dealers to document the guns they buy and
sell in an "acquisition and disposition book" separate from their sales forms.
ATF kept all but four of 227 guns found in the Gowdas' basement, claiming a
lack of documentation. Three of the 227 guns had been reported stolen, one
just months earlier in Lakewood.
Chris Eastburn, an inspector specializing in gun-trafficking cases, spent a year
poring over the scraps of information seized in the raid, creating a giant
computer file and an estimate that Gowda had sold perhaps 10,000 guns
without paperwork. In a July 1999 memo, he described Trader Jim's business as
"the largest criminal case we know of involving gun trafficking."
Eastburn entered the serial numbers of thousands of guns that had passed
through Gowda's hands into ATF's national "suspect gun database," in case they
turned up later in criminal arrests.
According to a memo from Petrilli, the Denver office chief, many did. Hundreds
of gun traces are "reflected in the growing body of evidence in this case," he
wrote, documenting that a licensed dealer participated in sales "traced to
firearms possession by convicted felons," as well as gun seizures "connected
with suicide, firearms and drug-related crimes."
In an interview, Petrilli said ATF routinely entered Trader Jim's identifiable sales
into its suspect gun database because "Mr. Gowda, as far as we're concerned,
was trafficking guns all over the place." At the behest of federal prosecutors,
Petrilli declined to answer other questions about the case.
ATF allowed the Gowdas to remain in the gun business for years after the raid,
apparently in the hope that, as agent Coffey wrote, they would "cooperate
pro-actively in the future" about others in the gun show community.
In 1999, ATF even renewed Trader Jim's license.
For two decades, that license has been issued to Gowda's home. According to
Arvada planning and zoning officials, every renewal violated a city zoning
ordinance precluding retail sales from residences.
"In Arvada you can't sell guns from the house," said Mike Elms, the city
planning director. "It's been that way at least since 1979." In the mid-1990s,
ATF sought to improve its inspections of retail gun businesses by reducing the
huge number of "kitchen table" dealers who had licensed their homes. It did so
by requiring dealers to attest under perjury penalties that state and local laws,
including zoning ordinances, permitted gun sales at their licensed premises.
Additionally, gun dealers were required to send a copy of the license application
to the local police chief.
Gowda did. In 1996 and 1999, he sent Ron Sloan, Arvada's police chief, an
application listing a single-family home as the licensed premises of his gun
business, along with a notation that he would be selling "mostly" at gun shows.
But Sloan said he was unaware that Arvada ordinances prohibit gun sales from
homes, so an application listing a residential address "would not necessarily
raise a red flag for me." Since ATF does not require police chiefs to sign or
return such applications, "all I do is receive them and file them," he said.
Familiar charges
The federal indictment of James Gowda, issued in November 1999 and revised
in February, contains a familiar charge. As in 1978, he is accused of selling a
handgun to someone he knew lived in Wyoming. He is also accused of selling
guns to people without listing their name, age or address and of selling a gun
from his house to someone he knew was a felon.
According to the Colorado Bureau of Investigation, which has conducted all
background checks of Colorado gun buyers except for one four-month period
last year, Trader Jim has called for background checks on just 10 gun customers
since January 1999. Most of those came after he was indicted.
Federal regulations do allow a firearms dealer to sell a personal gun without a
background check, but only if he has owned it for at least a year and keeps a
record of the sale.
At trial, Gowda is expected to argue that many of his sales were personal, and
that the record-keeping requirements of ATF are convoluted and unevenly
enforced.
"Was he selling guns from his stock in trade, or was he selling from his private
collection?" St. Veltri asked. "Gowda's point is that the law is not of sufficient
clarity."
Meanwhile, St. Veltri hopes to move the trial out of Colorado, where a high
school massacre with weapons acquired privately at a gun show has been
followed by a referendum campaign to ban all private gun show sales.
"I was thinking Las Vegas," he said.