Quote History Quoted:
So what is the damage?
Look at it like this.
The innocent seller1 sells and the ATF approves the transfer to innocent Buyer1/innocent Seller2.
Innocent Seller2 sells to Innocent Buyer2. ATF approves the transfer.
Innocent Buyer2 waits a few years and then contact Innocent Seller2 and demands money back.
However, there is no damages. Innocent Seller2 has not been damaged in any way until he suffers a loss.
And when he does suffer that loss i.e. seizure by the ATF which is the only way he has compensable damages.
I dont think there is anything other than an all or nothing deal.
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You have to understand the law and the wording of law.
Assuming your scenario has actually happened; There is no innocent seller or buyer regardless if they know they are innocent and even if they don't have malicious intent.
If you are in possession of an unregistered machine gun then you are in violation of the NFA. Even if you have absolutely no idea you're in violation or not, you are in violation. Unfortunately they didn't put the word "knowingly" in 5862(d)
Title 26 Section 5861(d)
makes it a crime, punishable by up to 10 years in prison, see § 5871,
for any person to possess a firearm that is not properly registered.
The ATF only approves the transfer. They have no idea if the firearm in its present condition is in violation of the law unless it's investigated. And even if the ATF approves the transfer, this still doesn't mean the NFA item is legal.
Basically anyone with it has a great chance of going to jail.