In a criminal complaint in 2008, ATF agents accused Nealon of illegal-weapons manufacturing for making the receivers. In addition, he was accused of illegal sales and export of other guns and possession of unlicensed firearms.
"To cover up this widespread illegal activity, Cavalry Arms and Nealon have failed to keep records, falsified records and lied to ATF," the complaint states.
The ATF cited violations dating to 2000, including failure to keep a weapons inventory, failure to conduct background checks on at least 25 purchasers and failure to report a multiple-handgun sale.
Another problem: The ATF said Cavalry had outsourced the production of its molded receivers to an unlicensed company.
Following a search of Cavalry's offices and Nealon's Mesa home in 2008, agents said Nealon had illegally sold weapons to out-of-state buyers, more than 40 of those to a California resident who often stored those weapons at Nealon's home.
Those weapons included: nine 9mm handguns, five .45-caliber handguns, five .22-caliber handguns, five .223 rifles, three 12-gauge shotguns, two .38-caliber handguns, two .44-caliber handguns, a .380-caliber handgun, a .308 rifle, a 7.62x39mm rifle, a 5.45x39mm rifle and a .357 rifle.
"Given Cavalry Arms' . . . willingness to falsify records to cover up illegal activities, including illegal sales, it is difficult, if not impossible, to determine exactly how many illegal sales Cavalry Arms and Nealon have made to out-of-state residents," the criminal complaint states.