April 2, 2019
from the United States District Court for the Northern
District of Indiana, Hammond Division. No. 2:13-CR-66 -
Joseph S. Van Bokkelen, Judge.
Hamilton, Barrett, and Scudder, Circuit Judges.
HAMILTON, CIRCUIT JUDGE.
law imposes tight restrictions on private possession of
machineguns and laser gunsights but allows law enforcement
agencies to purchase and use both machineguns and laser
sights. This appeal concerns criminal conspiracies among a
firearms dealer and law enforcement officers to fool
manufacturers into thinking they were selling to local police
forces when the machineguns and laser sights were instead
going into private hands.
Vahan Kelerchian was a licensed firearms dealer. His
co-conspirators were Joseph Kumstar, the Deputy Chief of the
Lake County Sheriff's Department in Indiana, and Ronald
Slusser, a patrolman who was the armorer for the
department's SWAT team. The trio defrauded firearms
manufacturer Heckler & Koch and the laser sight producer
Insight Technologies into selling them machineguns and laser
sights restricted by law for law enforcement and military
use. After many fraudulent transactions, the three were
indicted on several charges. Kumstar and Slusser pleaded
guilty. Kelerchian went to trial and was convicted on four
counts of conspiracy and four counts of making false
writings. On appeal, Kelerchian raises numerous issues, but
we affirm his convictions on all counts. In Parts I and II,
we provide the factual and procedural background for
Kelerchian's arguments. In Part III, we analyze his
numerous challenges to his convictions.
Machineguns and Laser Sights
enactment of the National Firearms Act of 1934, codified in
the Internal Revenue Code as 26 U.S.C. § 5801 et seq.
("the 1934 Act"), federal law has forbidden the
importation of machineguns, but with several exceptions. Two
are relevant here. First, machineguns may be imported for use
by state or federal departments or agencies, and second,
machineguns may be imported "solely for use as a sample
by a registered importer or registered dealer." 26
U.S.C. § 5844; see also 27 C.F.R. § 479.112. The
conspirators here submitted fake documents to Heckler &
Koch to take advantage of these two exceptions.
Control Act of 1968, as amended and codified as part of the
criminal code in 18 U.S.C. § 921 et seq. ("the 1968
Act"), imposed additional restrictions on a much broader
category of firearms, as well as new recordkeeping laws. The
1968 Act, as amended, prohibits the transfer or possession of
machineguns made after 1986, except by a federal, state, or
local agency. 18 U.S.C. § 922(o). Both the 1968 and 1934
Acts require importers and dealers of firearms to keep
records related to their transactions. 18 U.S.C. §
923(g); 26 U.S.C. § 5843. Both Acts make it a crime to
make false statements with respect to these records. 18
U.S.C. § 924(a)(1)(A); 26 U.S.C. § 5861(1). The
Bureau of Alcohol, Tobacco, Firearms and Explosives
("ATF") administers the recordkeeping requirements
and the exceptions.
sights, on the other hand, are regulated by the Food and Drug
Administration ("FDA") as part of its regulation of
radiation-emitting devices. See 21 U.S.C. § 360ii. The
powerful lasers on gunsights can cause eye damage, so federal
law ordinarily requires them to be equipped with visible or
audible warnings before and during use, as well as protective
covers and key controls. 21 C.F.R. § 1040.10(f). They
also must have labels warning of the risk of eye damage. 21
C.F.R. § 1040.10(g)(2)(iii).
may, however, grant exemptions or variances from these
requirements, such as for police departments that might need
to be able to use silent laser sights. 21 U.S.C. §
360oo(b); 21 C.F.R. § 1010.4(a). The FDA also requires
accurate records for laser sales. Laser manufacturers must
collect and preserve information that will enable the tracing
of lasers sold to distributors or to dealers. 21 C.F.R.
§ 1002.30(b)(1); see also 21 U.S.C. § 360nn(f).
Dealers and distributors must "obtain such information
as is necessary to identify and locate first purchasers"
of lasers and forward this information "immediately to
the appropriate manufacturer." 21 C.F.R. §
Kelerchian was a licensed firearms dealer who ran a business
in Pennsylvania called Armament Services International, Inc.,
known as ASI. He met Lake County Sheriff patrolman Ronald
Slusser at a Kentucky machinegun show some time in the early
2000s. A few years later at the same show, Slusser introduced
Kelerchian to his supervisor, Joseph Kum-star, the Deputy
Chief of the Lake County Sheriff's Department. According
to Slusser, he and Kelerchian stayed in touch and did
business together for the next several years.
point, Slusser told Kelerchian about an illegal arms deal in
2008 that Kumstar had instructed him to help with. Kumstar
had acquired machineguns by claiming that they were for the
Sheriff's Department, but then instructed Slusser to
remove certain parts of these guns and to sell them over the
internet for Kumstar's personal gain. Slusser testified
that Kelerchian expressed interest in doing a similar deal
with Kumstar and Slusser. The three then plotted the
conspiracies that led to their convictions.
first part of the conspirators' plan was to purchase
machineguns from international gun importer Heckler &
Koch ("H&K") under the pretense that the
weapons were for the Lake County Sheriff's Department.
Kelerchian, Slusser, and Kumstar orchestrated three
fraudulent machinegun purchases from H&K.
first transaction, in December 2008, Kelerchian, Kumstar,
Slusser, and Slusser's cousin, Ed Kabella, ordered 50
machineguns for $83, 026. Kumstar prepared paperwork saying
falsely that the Sheriff's Department was purchasing all
50 machineguns. Kelerchian sent this paperwork to H&K,
including statements on Sheriff's Department letterhead
attesting that the weapons were for the exclusive use of Lake
County law enforcement. H&K then filed ATF Form 6,
asserting that it was importing 50 machineguns for the Lake
County Sheriff's Department. ATF approved the
transaction, and H&K sent the 50 machineguns to the
then took the machineguns apart, separating the guns'
lower receivers, which are the regulated portions of the
weapons containing traceable serial numbers. The unregulated
upper barrels of the guns were distributed among the
conspirators according to how much money each had contributed
to the purchase. The plan was to refurbish 15 of the
regulated lower receivers into new guns using cheaper parts,
and then to add these new weapons into the Sheriff's
Department's armory. The 35 remaining lower receivers
were to be destroyed. No machineguns ever made it to the
Sheriff's Department, though. The conspirators sold the
unregulated machinegun parts for a substantial profit.
Slusser sold his unregulated machinegun barrels to a dealer
named Adam Webber, who runs a website selling hard-to-acquire
H&K machinegun parts.
was involved in the next two machinegun purchases. He told
Kumstar and Kelerchian that he was interested in buying
additional machinegun parts. In February 2009, using the same
procedure as before, Kumstar and Kelerchian bought nine
H&K machineguns, again telling H&K falsely that the
guns were for the Sheriff's Department. Once the
machineguns were delivered, Slusser again disassembled them
and sent the unregulated parts to Webber. In exchange, and
relevant to the money-laundering conspiracy charge, Webber
sent Slusser a cashier's check for $18, 900. At
Kumstar's direction, Slusser deposited that check into
his own account and then sent cashier's checks to both
Kumstar and Kelerchian. Nine months later, Kelerchian mailed
H&K a check for the machineguns.
October 2009, Kelerchian and Kumstar bought twelve more
machineguns from H&K, again telling H&K falsely that
they were for the Sheriff's Department. Slusser again
disassembled the guns and sent the unregulated parts to
Webber. Webber mailed Slusser a $31, 200 check, which he
cashed. Slusser wrote Kelerchian a check for $28, 200, and
Kelerchian wrote H&K a check for the guns' $16, 800
meantime, the conspirators also used the exception for
importing machineguns as demonstration samples for a dealer.
Kumstar testified that Kelerchian asked him for help in
buying machineguns for his personal collection. Between
October 2007 and March 2010, Kumstar sent five letters to the
ATF stating falsely that the Lake County Sheriff's
Department was interested in demonstrations of the weapons
Kelerchian wanted for himself. The letters said that
Kelerchian had "offered to conduct such
demonstration" and "intend[ed] to demonstrate the
operation, identification and safe handling of the guns"
to provide "department personnel a better understanding
of the capabilities, limitations and differences of these
guns." Kumstar testified that neither he nor the
Sheriff's Department was actually interested in
demonstrations of the requested machineguns and that he never
had discussed a plan for conducting an actual demonstration
with Kelerchian. Kumstar also testified that the weapons were
not guns the Department would use.
this arrangement, Kelerchian was able to buy nine
machineguns. He became the registered owner of these weapons,
and federal law allowed him to sell them at his own
discretion. No demonstrations ever occurred.
testimony disputed Kumstar's account. He said that
Kumstar had offered on his own to write the first dealer
sales sample letter for Kelerchian and genuinely was
interested in a demonstration. Kelerchian also testified that
he offered to conduct demonstrations for Kumstar and the
Department many times between October 2008 and April 2011. He
said that he offered a variety of settings and dates but that
Kumstar never took him up on his offers. The most Kumstar
did, according to Kelerchian, was to come to Kelerchian's
place of business, take photographs with guns, and pick up a
gun, saying "We did our demo."
Laser Sight Purchases
Kumstar, and Slusser also devised a plan to buy restricted
laser sights from a company called Insight Technology.
Slusser testified that he and Kelerchian wanted to buy laser
sights for their personal collections. The devices Kelerchian
and Slusser wanted did not comply with FDA safety rules
requiring a visible or audible warning. However, the FDA had
granted Insight Technology a variance allowing it to sell its
laser sights (technically, Class Mb devices) to federal,
state, and local enforcement agencies on the theory that
safety features like a visible or audible warning could
compromise stealth operations in which officers need to
remain unheard and unseen.
and Kelerchian used the variance to buy laser sights on the
pretext that they were for the Sheriff's Department.
Kelerchian and Slusser told Kumstar which sights they wanted,
and Kumstar then put together a purchase order with paperwork
saying falsely that the Sheriff's Department was buying
the lasers. In December 2008, Kelerchian sent Insight
Technology this purchase order for 25 sights for $27, 103.52.
Using a nearly identical method, in March 2010, the three
bought an additional 22 lasers sights for $30, 249.92.
According to Slusser, he and Kelerchian placed two more
orders for Insight Technology laser sights by using a friend
of Slusser's in the Lowell, Indiana Police Department in
December 2009 and August 2010. The Lowell orders were for
more than 28 Class IIIb laser products costing more than $32,
testified that he was unaware of the FDA's regulation of
lasers and the variance. He told the jury that an Insight
Technology employee named Linda Harms told him that the
lasers could be sold to individuals if they went through a
law enforcement department first. Harms testified at trial
that she never would have told a customer that laser sights
were available for individual purchase.
federal grand jury returned a nine-count indictment. Count I
alleged that, in buying the machineguns, Kelerchian, Kumstar,
and Slusser violated 18 U.S.C. § 371 by conspiring to
make false statements in records required by the 1968 Act.
See 18 U.S.C. § 924(a)(1)(A). Count II alleged that, in
buying the laser sights, Kelerchian and the others violated
18 U.S.C. § 371 by conspiring to defraud the FDA by
interfering with its lawful government functions of limiting
the sale of various restricted laser sights to military and
law enforcement agencies and correctly identifying the buyers
of restricted laser sights.
III through VII focused on the demonstration letters. Count
III charged Kelerchian under 18 U.S.C. § 371 with
conspiring with Kumstar and others to violate 18 U.S.C.
§ 1001 by making false statements to the ATF in the
phony demonstration letters. Counts IV through VII charged
Kelerchian with actual violations of § 1001 in four
VIII alleged that Kelerchian committed bribery by offering
Kumstar a shotgun in exchange for his help with several of
the fraudulent transactions. Count IX alleged that
Kelerchian, Kumstar, and Slusser conspired to launder money
in violation of both 18 U.S.C. § 1956 and § 1957.
The § 1956 allegation concerned the second machinegun
purchase and the § 1957 allegation concerned the third.
The premise of Count IX is that the conspirators engaged in
wire fraud in obtaining the machineguns and then laundered
the proceeds of that fraud.
Kumstar, and Kabella pleaded guilty and agreed to testify for
the prosecution. Kelerchian took his case to trial. After the
government rested and again after the close of all the
evidence, Kelerchian moved under Federal Rule of Criminal
Procedure 29 for a judgment of acquittal on all counts. At
both stages, the district court denied the motion on Counts I
through VII and took the motion under advisement on Counts
VIII and IX.
jury found Kelerchian guilty on all counts except the bribery
charge in Count VIII. Through a special verdict form,
regarding Count II, the jury specifically found Kelerchian
guilty of conspiring to interfere with both of the two
regulatory functions of the FDA identified in the indictment.
Through another special verdict form on Count IX, the jury
found Kelerchian guilty of conspiring to launder money in
violation of both 18 U.S.C. § 1956 and § 1957.
Kelerchian was sentenced to 100 months in prison, plus a fine
and term of supervised release.
challenges all of his convictions on a variety of grounds.
First, he argues that Counts I and II failed to allege
federal crimes. Second, he argues the government failed to
prove the demonstration-letter charges in Counts III through
VII and the money-laundering conspiracy in Count IX. Third,
he contends the district court erred in its jury
instructions. Finally, he claims the prosecution engaged in
misconduct in its closing argument. We find no errors.
Legal Sufficiency ...