A federal grand jury charged Nashville-based gun manufacturer and U.S. military supplier Sabre Defence Industries and five company officers with illegal international arms trafficking.
Sabre owner Guy Savage, a United Kingdom citizen, and Middle Tennessee residents President Charles Shearon, Chief Financial Officer Elmer Hill, Director of Sales Michael Curlett and International Purchasing Manager Arnold See Jr., are the individuals charged.
They also face charges of conspiracy, making false statements, smuggling, wire fraud and mail fraud in the 21-count indictment unsealed today.
They and the company, located at 450 Allied Drive in Nashville, are accused of illegally importing and exporting regulated guns and gun components and technology to and from the United States. The indictment alleges that Savage directed the activity from his personal residences and from a related U.K. company of the same name.
The indictment alleges that the defendants concealed their activities by falsifying shipping records and labels and concealing gun components in false bottoms of boxes. The indictment alleges that Sabre smuggled regulated firearms components overseas without required licenses or authorizations since at least 2003.
“We recognize the role that weapons play in a sometimes violent world and we will vigorously enforce the laws to prevent the illegal importation of firearms and firearm components,” Jerry Martin, U.S. Attorney for the Middle District of Tennessee, said in a news release.
Sabre was raided by the Bureau of Alcohol, Tobacco, Firearms and Explosives in February 2010. At the time, Shearon said the raid concerned the “potential criminal misuse of certain non-saleable firearms” manufactured by Sabre and purchased by its employees.
“Sabre has received information that employee(s) involved in inventory control may have obtained and re-sold some items without appropriate licenses,” the company’s statement last year read. “Sabre is and has been cooperating with federal agents in this investigation.”
Before it shut down operations following the raid, Sabre’s largest customer was the U.S. military.
Savage was arrested in London today. The other four defendants will be issued a summons to appear in the U.S. District Court in Nashville.
Two civil cases also are pending against Sabre in the Middle District of Tennessee. In 2009, a supplier sued the company for breaching a $1 million sales agreement for machinegun parts.
Late last year, Cadence Bank sued the company for not repaying a $1.9 million loan. In court documents, the bank alleges that the company has been attempting to remove proceeds from loan collateral such as inventory and equipment to accounts with other banks. A temporary restraining order has been issued to prevent Sabre from converting the loan collateral.
The court also ordered Sabre to assist Cadence in its efforts to sell the assets of the company. That sale is scheduled for Feb. 15
Authorities: US firm's guns turned up in Mideast
Court documents cite 'phony shipping documents' and invoices from 'fairy land'
NASHVILLE, Tennessee — Affidavits attached to search warrants for a Tennessee company show that illegally trafficked assault rifles and gun parts connected to the company were found in Middle Eastern countries, including Jordan and the United Arab Emirates.
Federal court documents unsealed Wednesday related to Sabre Defence Industries, fill in the picture of an alleged conspiracy to skirt U.S. regulators and law enforcement to gain an advantage in the international arms industry.
Four local Sabre executives charged in a 21-count federal indictment are scheduled to change their not guilty pleas Monday, The Tennessean reported.
The alleged fraud included British owner and CEO Guy Savage and Nashville officials using "phony shipping documents" and invoices from "fairy land," sending gun parts overseas under false bottoms in shipping containers and stamping silencers illegally imported from Finland as if they were manufactured in Nashville, according to the affidavits.
'Lawn mower mufflers'
By 2007, Sabre officials were going as far as calling silencers "lawn mower mufflers" and rifle barrels "gear shafts" in their effort to fly under the radar of regulators.
Federal prosecutor John Webb confirmed that the four Tennessee defendants — President Charles Shearon, Chief Financial Officer Elmer Hill, Director of Sales Michael Curlett and International Shipping and Purchasing Manager Arnold See Jr. — have reached a plea agreement with the government.
The details of the agreements will be filed with the U.S. District Court for the Middle District of Tennessee after Monday's hearing.
Webb said Savage has an extradition hearing this week in Britain. Lawyers for the defendants did not return phone messages and emails seeking comment.
The unsealed records paint a picture of Savage, having purchased the Nashville gun manufacturer formerly known as Ramo Defense Systems in 2002, with the hope of shipping parts to his British company, also named Sabre, and hoping to score U.S. defense contracts.
When U.S. authorities threw up roadblocks, Savage turned to illegal means to keep guns and parts flowing between his U.S. and U.K. companies to remain competitive. The alleged fraud continued for several years, even as individuals within and outside the company raised concerns.
Concurrently, loose inventory controls allowed lower-level employees to remove Sabre weapons and components from the Nashville production line, according to the affidavits. In some instances two guns would be labeled with the same serial number, allowing one to enter circulation without documentation. One former employee, Charles Kerr, is accused of selling Sabre guns to a local buyer. Both men are charged with illegal gun trafficking in a federal indictment.
The documents reveal that Sabre has been under investigation since 2007 by two separate federal agencies. U.S. Immigration and Customs Enforcement started an investigation that year after receiving a tip that Sabre was illegally exporting M16 parts to the U.K. In 2008, DHL flagged a suspicious package sent by Sabre in Nashville and bound for Sabre in the U.K. Agents found 71 finished M4 rifle barrel assemblies under a false bottom in the shipping container.
After being confronted by ICE agents in 2008, Shearon said, "We (messed) up and I don't want you guys to think we are criminals," according to the affidavits.
The Bureau of Alcohol, Tobacco and Firearms started a separate investigation in 2009 when the circumstances of a reported burglary at the home of Sabre salesman Rick Rardon raised suspicions. Investigators thought the burglary appeared staged and that the guns might have been sold illegally. ICE and ATF combined their efforts once they became aware of each other's investigations.
A series of emails from 2003 to 2008 and obtained by investigators show Sabre management and employees illegally moving guns and parts, including silencers, the affidavits state.
In a December 2003 email, Hill wrote an email to Savage and said, "We are currently 'stretching' the rules on stating the value and description of parts that we are sending you."
In 2004, Shearon wrote Savage an email stating, "The 100 barrels without chambers will be ready Mon. or Tues. if we can find someone dumb enough to sign the shipping documents we will send them to you."
Hundreds of guns ultimately found their way to the volatile Middle East. Webb said authorities continue to investigate the end destination of the illegally trafficked guns and gun parts.
At present time, the employees indicted along with Guy Savage have all pled guilty and are awaiting sentencing. Savage, however, has not even been extradited into the United States. He is fighting his extradition while free on bond. Savage has filed a number of pro se motions, all seeking to have the case against him dismissed for one reason or another. All motions were denied under the fugitive disentitlement doctrine (which basically says, you're not here, you don't get to argue and have motions decided). He was also recently appointed counsel after he claimed debts of almost $1mil. Of note is that all but one of the employees have private counsel.