I held an FFL from 2016-2019, when it came time for renewal the atf showed up to do an inspection. When this happened I had a gentleman purchase a firearm that I took his check upfront for. The firearm came in and from the time he ordered it and the time I did the background check he had a felony charge pop up on his record. I obviously didn’t transfer it but I told him he had to find me someone to purchase the firearm in order to get his money back and he did. When the atf came to check my books they considered a straw purchase. I gave the license up willingly due to not having financial means to fight it, complete stupid mistake on my part for not getting something signed by the third part stating he would keep the firearm and not be giving it to the first guy. Any opinions on chances of me obtaining the FFL again? Yes I know it was dumb and I’m ready for the backlash of this question but I need opinions before I retry.

Yes, that was stupid, but you know that already. You will probably need a lawyer especially if you don't have a store front. You should have kept your license as one strike would not have made a big difference.

FWIW I just had a guy pick up a rifle today that he bought 3 years ago. He had a drug conviction from when he was a juvenile, but got it expunged. That gun sat in the corner for 37 months. The dad wanted me to transfer it to him and I said no as it could be construed as a straw. Always think entrapment!

Thank you,

Then come to find out the gun was stolen out of the guys vehicle, the one that actually ended up purchasing it like three months after the fact. Should I attempt to obtain a copy of the report to help my case or is that a non factor in this case.

How was it considered a straw purchase?

Was the felon caught with the gun? Did the purchaser admit to giving it to the felon?

The ATF logic was probably that since the original buyer could not buy the weapon, selling it to someone who he knows and that the ATF thinks could give the gun to the guy.

He got bamboozled then.

No the felon was never in possession of the firearm or got caught with it. In fact his felony has since been removed from record as it was SIS probation and he has since bought fire arms from dealers lately. And the actual purchaser has the forearm until the day it was stolen.

Reapply, what can they do besides deny the license.

 
How do you know this? FBI NICS is prohibited by law from telling you.
Did the buyer complete and sign the 4473 and you ran a NICS check?



This was a huge mistake. Do ya think for a moment that he would send in a friend or acquaintance to purchase?





There is no way ATF could determine the sale was a straw purchase simply from examining your books.




Fight what? You did not commit a violation unless YOU knew the subsequent sale was a straw purchase. Did the IOI give you a notice of violation in the compliance inspection "report card"? Even tell you what your options were?
Federal Firearms Compliance Inspections and Revocation Process
As that fact sheet details, "revocation" is pretty damn rare.



I doubt that would have helped one bit. I suspect your IOI has no idea how retail sales work. They see the original purchasers denied 4473 and the subsequent sale to another buyer. That's not necessarily indicative of a straw sale.

I've had a policy for twelve years that if the denied buyer does not choose to appeal his denial, then he has a few options:
1. Allow me to sell on consignment to a buyer of my choosing.
2. He can list it or pay me to list the firearm on Gunbroker or other website or gun forum and I'll ship to the buyers FFL.
3. I'll return the firearm to the seller, if seller is willing to refund the denied buyer.
4. No local sales to people I do not know. I don't want the buyer having a friend/relative/girlfriend trying to get the gun on his behalf.





That depends on what the IOI wrote in their compliance inspection.



   
The worst that can happen is your application is rejected. But you can appeal that. I would attach a full explanation of the circumstances.

Having a storefront is different how?




This.

Exactly.

So I am guessing IOI saw denied 4473 (or knew about it), then looked to see who gun was eventually transferred to. Then OP said, yeah, that was a friend of the guy who was denied....

or there is more to the story.

I'm guessing he told the IOI what he told the original buyer.
OP's IOI:

Because they don't like home based ffls much. Hence them doing what they can to get rid of them in the past. At least this is my experience. I am not a store front, but am zoned commercial and I do actively engage is buying and selling.

I would have took the strike and moved on... its not that easy to lose your FFL, like you really have to fuck up.

Had a local shop that was on like their 3rd or 4th failed inspection and eventually they were forced to close for FORGING 4473's and logbooks...

Funny story, the IOI that shut them down (6yrs ago) was my shops IOI and the signature they forged was my business partners. We found that out during our initial interview last year. She said it was a huge deal at the office cause they RARELY get to pull a license and usually just work with FFL's until they are compliant.

YMMV

Whether they don't like them is immaterial. There is zero difference in compliance inspections.
My first compliance inspection the IOI basically said that without home based dealers he wouldn't have a job.

After the numerous shops I saw closed by ATF be told they could simply reapply and be approved I’m guessing by it won’t be a big deal for OP.

Well all I can tell you after being a ffl for 31 years I have seen many many dealers come and go. I have seen ffl's railroaded and had every minor infraction written up. When they get you on enough violations they do an administrative review and pull the license. I have known at least 3 guys who went 07 mfg and ran afoul of the regulations and every one of them got their licenses yanked.

Pro-Tip - Follow the regulations?

In just twelve years so have I.
I can name about a dozen offhand that were brick and mortar just in the Dallas area.
But most were just poor businessmen.






"Railroaded:? As in ATF falsely accused the licensee or railroaded as in the FFL screwed up royally and ATF was on him like a hungry tick?
And every minor infraction is supposed to be noted. IOI's don't have much leeway. The report card they give you is intended to show the licensee what they did wrong and how they plan to fix or avoid such errors or omissions in the future. A single infraction could cause a license to be revoked, but that is so rare it not worth the gov's time to pursue. To get to a revocation hearing requires a long history of screwups, multiple infraction notices and a warning conference. (not to be confused with a criminal act)



Nope. Due process. Its a thing even with ATF. They cannot revoke the dealers FFL until the dealer has exhausted all avenues of appeal. There are several cases where dealers lost hundreds of guns, had no 4473's, missing ID on buyers and a years long record of screwups. Google "gun dealers who had license revoked" and you'll be amazed how many violations some dealers had before revocation proceedings.



Yanked for what?

The dealers I know that got onto ATF's bad side almost never had their license revoked. They are usually persuaded into giving up their license and told to reapply. I agree that most simply close due to bad business practices.

For fucks sake...

I had a Tac14 come in a couple of months ago for a transfer, and the buyer admitted before we even did the transfer that she was a disqualified person.
I was ready for her to suggest that I transfer it to one of her relatives, and was going to absolutely refuse to do so because of OPs scenario.
I think its one thing for me as the FFL to find an alternate buyer who can compensate the original purchaser for their purchase expense. Its entirely another thing for the disqualified person to suggest that a specific person do the transfer in their place because of the potential that the named person will simply turn the gun over to the disqualified person.
Either way, the Tac14 still sits in the safe because she REALLY over-paid for the gun, and no one wants to pay her what she paid for the thing.....

I've often wondered what could or should be done with a gun where the buyer can't pass the NICS check.  Dogtown Tom has a good list of options.  I guess another might be for the FFL to buy the gun if they are interested in it for the price.