Gilbert firearms maker admits to illegal sale of weapons
Complex gun regulations led to owner's violation, his attorney says
by Robert Anglen - Feb. 22, 2010 12:00 AM
The Arizona Republic

A Gilbert firearms manufacturer will cease its gun operations after the company's owner pleaded guilty to illegally selling rifles, shotguns and handguns.
Cavalry Arms Corp. says on its Web site that it has been "engaged in an ongoing dispute" with the Bureau of Alcohol, Tobacco, Firearms and Explosives, or ATF, for two years over "regulatory and compliance mistakes."

But in federal court last week, owner Shawn Nealon admitted that he and his company illegally sold as many as 40 weapons to an out-of state buyer, and he voluntarily surrendered his federal firearms licenses, meaning Cavalry will no longer be able to import, manufacture or deal in weapons or ammunition.
"This is not some individual setting up a stand at a gun show," U.S. Attorney Dennis Burke said Friday. "These are the preliminary steps that individuals take to get around federal laws in order to traffic in illegal firearms."
Although none of the Cavalry guns has been linked to a crime, Burke said such cases are a particular concern for the agency.
Illegal-firearms sales are steadily increasing in Arizona, with much of the market driven by demand in Mexico, said Burke, the U.S. attorney for Arizona.
"The activity - southbound guns into Mexico - is very robust," he said. "We have (several) very active investigations going on now."
Nealon's lawyer, Mark Vincent of Chandler, called the charges against his client ridiculous.
"This is by no means a great victory for the government," he said, describing federal gun regulations as arcane. "In my opinion, no gun dealer in the United States could comply with the myriad of regulations. . . . It's almost impossible to determine what the law is."
Vincent said as much as 90 percent of the government's original case against Cavalry was dismissed, leaving his client pleading guilty to selling to an out-of-state buyer.
"It's a minor problem. . . . If that had been the only (charge), I don't know that they would have bothered with it," he said, adding: "Nobody was hurt. Nobody was almost hurt."
Nealon faces up to five years in prison and a $250,000 fine when he is sentenced in April.
But authorities say the bigger victory in this case is stripping Nealon of his firearms license.
Cavalry's primary gun operation involved creating a polymer mold of a part for the AR-15 semiautomatic rifle. The "lower receiver," the piece between the barrel and the stock, contains the firing mechanism. It is defined by the government as a firearm. The receivers were sold to the public and to other manufacturers for commercial and law-enforcement use.
According to a memo from Cavalry's lawyers included in court documents, Cavalry employed six people and sold as many as 6,000 receivers between 2000 and 2006.
In a criminal complaint in 2008, ATF agents accused Nealon of illegal-weapons manufacturing for making the receivers. In addition, he was accused of illegal sales and export of other guns and possession of unlicensed firearms.
"To cover up this widespread illegal activity, Cavalry Arms and Nealon have failed to keep records, falsified records and lied to ATF," the complaint states.
The ATF cited violations dating to 2000, including failure to keep a weapons inventory, failure to conduct background checks on at least 25 purchasers and failure to report a multiple-handgun sale.
Another problem: The ATF said Cavalry had outsourced the production of its molded receivers to an unlicensed company.
Following a search of Cavalry's offices and Nealon's Mesa home in 2008, agents said Nealon had illegally sold weapons to out-of-state buyers, more than 40 of those to a California resident who often stored those weapons at Nealon's home.
Those weapons included: nine 9mm handguns, five .45-caliber handguns, five .22-caliber handguns, five .223 rifles, three 12-gauge shotguns, two .38-caliber handguns, two .44-caliber handguns, a .380-caliber handgun, a .308 rifle, a 7.62x39mm rifle, a 5.45x39mm rifle and a .357 rifle.
"Given Cavalry Arms' . . . willingness to falsify records to cover up illegal activities, including illegal sales, it is difficult, if not impossible, to determine exactly how many illegal sales Cavalry Arms and Nealon have made to out-of-state residents," the criminal complaint states.
Nealon on Friday referred questions about the case to his lawyer. But he said Cavalry is not shutting its doors.
He said the company will sell off its inventory of weapons, which it will be allowed to do with ATF oversight, and concentrate on developing firearm accessories and medical products.
"The firearms portion of our business doesn't make up a large part of what we do," Nealon said.
However, news of the shutdown prompted posts of outrage and well-wishes on Cavalry's Web page.
"CavArms has some righteous dudes working there and the ATF has screwed you over since they don't have the guts to take on street and prison gangs," one person said in an online post.
Burke had another take on the subject.
"This isn't the first or the last time a defendant is going to try and redefine his culpability," the U.S. attorney said. "For the rest of the gun industry, it's a sign to other bad actors that we are going to focus on them."

dupe

Not sure how much of this to believe.


If true, CAV arms fucked themselves.

Well at least it is over

Those that donated to the legal defense fund get a refund?

If this is true, I no longer feel sorry for them.  

 

And now on arfcom, the most avatar changes in 24 hours in history.

In on one.

I mean...stupid hurts.

that sucks to hear, but the ATF still is a bunch of douchebags

Don't think it's a dupe, since the link was posted inside a thread.



 

interesting

That wasn't very smart.

Well that sucks.  

I guess I will never get a pink lower for the wife now.  I shouldn't have sold my black one.  I did keep the green one though.  

I wonder if they will keep making stocks and hand guards?

Cav Arms website

Dear Friends and Loyal Customers:

As you may be aware, we have been engaged in an ongoing dispute with the ATF for the past two years. While Cavalry Arms has at all times tried its best to run a lawful and honest shop, unfortunately, some regulatory compliance mistakes were made. We have now come to the point where we feel it is in our best interest to close our FFL and to cease all firearms operations. The owner of Cavalry Arms, Shawn Nealon, has elected to leave the firearms business and concentrate on firearms accessories instead. We are currently in negotiations with another company for that company to purchase the CAV-15 product line. Rest assured that any resulting purchase agreement will address the issue of providing service and support with regard to existing CAV-15 firearm products. We will continue to manufacture quality plastic components, grow our Medical products line, and work to bring new innovations to the relevant markets. Over the next several weeks we will be conducting a wind-down of our firearms manufacturing and FFL operations. Accordingly, please do not send us any firearms for repair or replacement. Instead, such issues should be addressed to the ultimate purchaser of our assets. Due to our limited personnel resources, during this transition/operation wind-down period, the final processing and shipping of firearm receivers already in our inventory will be our first priority.

We deeply appreciate your patience and understanding and anticipate that the relevant asset purchaser will begin operations in March of 2010. We sincerely thank you for your prior and ongoing support during these troubled times and look forward to better years ahead.

Thank you,
Cavalry Arms

that's sort of how I feel
I know the article could have a gov good/gun company bad slant to it but on the surface it sounds like there was more to the story than the ATF hammering away at Cav for the variance letter issue.

Wow.  Sad to see a firearms company have to deal the the .gov and ATF, but if the charges were true, they were stupid.

I just cant believe that they would risk the entire corporation over 40 gun sales.  

Sounds like bullshit to me.



ANY record-keeping errors can easily be turned into "oh he did this INTENTIONALLY TO HIDE it!"



What a load of crap.

Ouch that'll do it, but he could have plead guilty sooner than this, since it appears he was in the wrong to begin with, could have saved a lot of speculation not to mention  loads of money.

Pleading to something does not always mean you actually did what you are pleading too,  sometimes folks are faced with tough choices.  Take a chance fighting unjust charges that could bring lots of time in jail,  or take a plea to a much lesser charge and not take a chance the jury will be swayed by antigun BS the prosecutor is guaranteed to use throughout the trial.

Sounds like most of the charges for illegal manufacture, export and sales could come from the whole molding/serial number technicality. That is, if you think you've got a legitimately manufactured lower & you sell it, then ATF steps in and says the variance wasn't done right, them bam! you've suddenly "sold an illegal firearm."

But stuff he did himself? Hmmm....

That won't buff out.

Fuck the ATF

Sounds like the real issue is that he sold 40 guns to a friend that doesnt live in state.  The rest of that article is full of bias and slant.

Sounds like the resale value of those lowers just went up. A bunch.

I wonder who, if anyone, will end up with the tooling and IP for the lowers.

It's a bullshit charge that is going to screw up a good man's life.

TRG

This has been on talk radio this morning too. "They radio hosts are hammering them saying basically, "Give them the chair, they knew better!"   The ATF oversteps it's "Authority" all the time, but if you are going to do fringe of legal sales, or outright unlawful sales especially with "assault type" weapons. What do you expect?  Bummer...

That is the first thing I thought as well.

Sad.

Agreed...

Time for two Arfcom staples.....

play stupid games, win stupid prizes

Agreed.

this is how I read it.

Since CavArms can't/won't respond directly to questions asking for clarification about the points in the article I unfortunately have to assume the legal facts that are reported in the article are actually true.  The fact is, this is no longer a case of an unjustified raid on a business that was doing nothing illegal.  Accounting mistakes?  Booking keeping mistakes?  Not really.  40 off the books sales to someone from California is not a minor over sight and this was not a witch hunt without basis.

They wrote that they made mistakes, so they were in the wrong. The ATF dosent go arround fucking with people for no reason.

Wheres all the ATF bashers now?

CavArms= fuckups.

And yet the hordes are rushing to throw Shawn under the bus without a second thought about the BATFE and their methods and tactics.  

TRG

This!



If his guilty plea is true...not just some 'agreement'....he fucking lied to all of us.








 

"to the ultimate purchaser of our assets"


Group buy?

It's always been the ARFCOM way,  sad but true.

You and many here have no idea what you are talking about.  Nothing but speculation.

Go piss up a rope.  When they start handing out brownshirts I am sure you will have your hand out asking for yours.

The ATF has taken two years to trump up charges after seizing all records, inventory, personal property of employees and yet you believe the ATF?

You think a man should go to prison for 5 years over a paperwork compliance issue?

Over a gun that the .gov says is 'illegally sold'?

Seriously? For all the cries for Freedom and Liberty you think paperwork is a federal crime?

TRG