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United States v. Scherer

decided: September 4, 1975.


Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 74 CR 99 JAMES B. PARSONS, Judge.

Tom C. Clark, Associate Justice (Retired),*fn* Swygert and Cummings, Circuit Judges.

Author: Swygert

SWYGERT, Circuit Judge.

Appellant Anthony Scherer was convicted of violating the firearms registration and recording requirements imposed on all federally licensed firearms dealers by 18 U.S.C. §§ 922(m), 923(g)*fn1 and regulations promulgated pursuant thereto. His conviction was based upon six counts of failing to maintain a Firearms Acquisition and Disposition Record in compliance with 26 C.F.R. § 178.125,*fn2 and three counts of failing to complete Treasury Form 4473 as required by 26 C.F.R. § 178.124.*fn3 Scherer has appealed from this judgment, urging reversal on numerous grounds. Our study of the issues presented convinces us that the ruling of the district court should be affirmed.

The appellant is a federally licensed firearms dealer operating under the firm name of Precision Shooter Supply, Box 197, Route 1, Hampshire, Illinois. He maintains an office connected to a barn on his property from which he is licensed to conduct his firearm business. Between February and August 1972, Government informant George Rivard made four "controlled buys" of firearms from Anthony Scherer. None of these transactions occurred at Scherer's formal business office, nor were the customary 4473 forms completed in order to record the identity of the weapons sold.

Approximately one month after the final sale to Rivard, special agents of the Bureau of Alcohol, Tobacco and Firearms (ATF) obtained a search warrant for Scherer's property. The warrant was executed on October 4, 1972. Over seventy firearms were seized by the Government, along with Scherer's Firearms Acquisition and Disposition Record books. These items served as the basis for Scherer's arrest, indictment, and later conviction. In addition, counts one and two of the indictment charged Scherer with failing to record the sale of three firearms to dealer Joseph Schroeder in November 1971 and April 1972. Defendant was convicted of these charges as well.


The heart of Scherer's initial argument centers around his interpretation of the 1968 Gun Control Act. Specifically, Scherer contends that he was not required to maintain records regarding the acquisition or sale of his personal firearms, and argues that the Government is estopped from asserting any duty to the contrary. Reliance is primarily placed upon Industry Circular No. 72-30, released by the Treasury Department in 1972, which specifies guidelines for the identification of personal firearms located on the business premises of licensed dealers:

A presumption exists that all firearms on a business premise are for sale and accordingly must be entered in the record required to be maintained under the law and regulations. However, it is recognized that some dealers may have personal firearms on their business premises for the purpose of display or decoration and not for sale. Firearms dealers who have such personal firearms on licensed premises should not intermingle such firearms with firearms held for sale. Such firearms should be segregated from firearms held for sale and appropriately identified (for example, by attaching a tag) as being "not for sale." Personal firearms on licensed premises which are segregated from firearms held for sale and which are appropriately identified as not being for sale need not be entered in the dealer's records.

According to Scherer's construction of the above guidelines, personal firearms located apart from the business premises need not be tagged or entered in a dealer's records. Since Scherer claims that the weapons seized were a part of his private collection and were stored in his home rather than his business office, he argues that he was exempt from recording their sale or disposition.

The necessary implication of these guidelines indicates that the act of selling a firearm, not its location or the arbitrary distinction between "personal" and "business" transactions, brings a weapon and the parties involved within the purview of federal control. In this regard the terms of 18 U.S.C. § 923(g) and the executing provisions of 26 C.F.R. §§ 178.124, 178.125 are clear. The statutes and regulations are comprehensive in their coverage, and refer to "any firearm" and "each disposition." They were designed to keep a constant record of the transfer and location of firearms in order to reduce the indiscriminate flow of such weapons and the crime that inevitably follows in their wake.*fn4 A licensed dealer must, therefore, comply with the recording provisions of 26 C.F.R. §§ 178.124 and 178.125 each time he disposes of a firearm. In the instant case it is immaterial whether the weapons sold were originally acquired for Scherer's personal use or for business purposes. They became a part of his business inventory the moment they were placed on the market for resale.


Scherer also alleges that he is exempt from the recording provisions of the Gun Control Act of 1968 because the sales listed in the indictment occurred at locations other than his licensed business premises.*fn5 Since he was not licensed to carry on a gun trade at any of the locations mentioned, he argues that he was not a federally licensed firearms dealer as to those places and thus not subject to the requirements of 26 C.F.R.§§ 178. 124 and 178.125.

Initially we cannot agree that all of the gun sales did not occur on Scherer's business premises. The house where the bulk of these transactions took place was a mere eighty feet from the defendant's office and located on the same property. Scherer's status as a licensed firearms dealer and the responsibilities that attend to that title do not end with a mere step outside the door. Moreover, the language of 26 C.F.R. §§ 178.124 and 178.125 is devoid of any reference to location. It requires that each disposition of a firearm be recorded and kept on file at the dealer's business office, and makes no exception for transactions conducted elsewhere. Although Scherer has not obtained a license for each place at which he does business as required by 26 C.F.R. § 178.41(b), this does not absolve him of the responsibility to record these transactions. A licensed firearms dealer may not avoid this duty ...

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