US News

Gun Manufacturer Pleads Guilty in Rare Gun Industry Prosecution

The holiday season kicked off with record sales for gunmakers, but it was decidedly less than happy for one Connecticut gunmaker. Stag Arms, known for its popular left-handed AR-15s, plead guilty to violating the National Firearms Act, which requires people and organizations to register any machine guns in their possession with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Stag founder Mark Malkowski entered the plea on the company’s behalf just before Christmas.
Stag Arms president Mark Malkowski, a vocal opponent of tougher gun laws, was named the National Shooting Sports Foundation’s “Business Person of the Year” in 2014.
The charges come after ATF agents inspecting facilities last year found approximately 3,000 rifle receivers and 22 machine gun receivers without serial numbers. Some of those receivers, the part of a gun that contains the trigger group and magazine well, and is itself legally defined as a firearm by the ATF, had no identifying markings at all. The inspectors also found the company hadn’t complied with manufacturing recordkeeping requirements, which state that a gunmaker must document the make, caliber, and serial number of each firearm produced. Serial numbers and manufacturing records help law enforcement track a weapon’s chain of custody; they’re essential tools for combatting gun trafficking.
As a result of Stag’s plea, the company will pay $500,000 in fines and Malkowski will personally pay $100,000. Stag will forfeit 109 of those receivers seized during a May raid. Malkowski must also sell the company and agree never to own or manage a gun company. These penalties give Stag the unfortunate distinction of being one of the rare gun makers to actually face criminal prosecution for misconduct. Heavy as the fines sound, they could have been far steeper. Possession of a single unregistered machine gun or a firearm without a serial number can be punishable by up to 10 years in prison and a fine of $250,000.
Questions linger about why, exactly, Stag and its management would risk such sanctions. Neither the ATF nor the U.S. Attorney for Connecticut would comment on any possible motive behind the company’s stockpile of illegal guns. For Stag’s part, Malkowski’s father, Tadeusz Malkowski, explained to the ATF that the thousands of weapons lacked serial numbers because the employee charged with stamping the numbers was on vacation. The company’s plea deal means there won’t be a trial, so that peculiar explanation won’t face scrutiny in court.
According to a former law enforcement official briefed on the case, it’s not likely that Stag was engaged in any conspiracy to traffic the receivers. The official, who is not authorized to publicly comment on the case and spoke on condition of anonymity, said that the company was mismanaged, and many at Stag were simply ignorant of basic recordkeeping obligations. The unserialized machine guns, originally manufactured for customers in law enforcement and overseas as part of deals that ultimately fell through, were left “in a shed,” without documentation of who was responsible for their custody, according to the official. It appeared the company had just forgotten about or procrastinated stamping them, despite previous warnings and visits from the ATF.
A representative for Malkowski said in a statement to The Trace that the company believes “that public safety was never compromised” and that the company had invested $500,000 to remedy the problems.
The official also said that the ATF tries not to bring criminal prosecutions against companies that commit similar violations, and instead works to bring them into compliance so they will cooperate in future investigations. The Bureau did just that in 2007. According to a press release, the ATF found Stag in violation of “a number of regulatory violations” that year. The ATF would not say how exactly Stag Arms broke the law during that earlier period. The official believed the company was charged this year because it broke the National Firearms Act laws, one of the most assiduously enforced federal gun laws.
Malkowski was named the National Shooting Sports Foundation’s “Business Person of the Year” at the 2014 SHOT Show, the gun industry’s largest trade show. The group lauded Malkowski for speaking out against new gun laws, for increasing shipments of his company’s rifles to states that were considering new regulations, and for shutting down production for a day to take his entire staff to Hartford to protest Connecticut’s assault weapons ban, enacted in the wake of the Newtown shooting.
Stag’s numerous violations recall the infamous Lorcin Engineering case from the mid 1990s, one of the only other instances in recent memory of a gun manufacturer attracting law enforcement’s attention. Lorcin, one of the so-called “ring of fire” gun companies that made cheap, small handguns in outside Los Angeles, California, was thrust into the spotlight after some of its employees stole at least 5,700 guns and sold them on the black market. When those thefts surfaced, the ATF considered rescinding  Lorcin’s federal firearms license, but a wave of litigation over faulty pistols drove the company to bankruptcy before it could face any regulatory or criminal action. There are no allegations that anyone at Stag took similar advantage of the company’s loose protocols.

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