October 22, 2004
Fraud Alleged in Winning Bid for Gun Manufacturer
By FOX BUTTERFIELD
Money used to defeat an effort by a California teenager paralyzed by a defectively designed handgun to buy the bankrupt manufacturer and dismantle it came from the family that owned the company, according to bank records and the young man's lawyer.
The lawyer, Richard Ruggieri, said he would ask the federal bankruptcy court in Jacksonville, Fla., to invalidate the sale of Bryco Arms, since the records suggested it was based on fraud.
Mr. Ruggieri, representing the teenager, Brandon Maxfield, contended when the bankruptcy court approved the sale in August that the winning bidder, a former employee of Bryco, did not have the financial resources to buy the company. Instead, Mr. Ruggieri said, the employee, Paul Jimenez, was simply acting as a front man for Bryco's founder, Bruce Jennings.
In a telephone interview yesterday, Mr. Ruggieri said, "We now have definitive proof that the Jenningses were financing Jimenez and that they lied to the court to conceal the connection between them."
Mr. Ruggieri pointed to a series of bank transfers showing that on Aug. 12, the same day that the bankruptcy court named Mr. Jimenez the winning bidder, a company owned by Mr. Jennings's former wife, wired Mr. Jimenez $430,000 to make the purchase.
The bank records were provided to The New York Times by Mr. Ruggieri.
In testimony a month earlier, the former wife, Janice Jennings, said she was bankrupt and that the company, Shining Star Investments, had no assets or bank accounts.
But Ned Nashban, a lawyer for Mr. Jennings, said he believed the transaction was legitimate because the money had come from a trust set up by Mr. Jennings's parents years ago for the benefit of their grandchildren. One of those grandchildren, Kimberly Jennings, had lent the $430,000 to Janice Jennings, Mr. Nashban said.
"This was an arms-length transaction and there was no fraud," he said.
The case has attracted national attention because last year Mr. Maxfield won a record $24 million jury award in Alameda County Court in Oakland, Calif., against Bryco, Mr. Jennings, Janice Jennings and trusts they had established for their children. The award led Bryco to declare bankruptcy.
Mr. Maxfield charged that a flaw in the semiautomatic handgun's design had led his baby sitter to shoot him accidentally through the chin and spine in 1994 because the safety had to be turned to the off position to unload it. Bryco was one of a group of companies in Southern California that made cheap handguns known as Saturday night specials.
At the time, Mr. Maxfield was 7. He has been paralyzed from the neck down since.
He has said he wanted to buy Bryco's machinery and an inventory of 76,000 unassembled gun frames to turn the weapons over to the Bureau of Alcohol, Tobacco and Firearms to be destroyed. Mr. Ruggieri had assembled a fund for a nonprofit company called Brandon's Arms to buy out Bryco, using small donations raised over the Internet and contributions by several large donors.
But at the hearing on Aug. 12, Mr. Jimenez, of Chino, Calif., topped Mr. Maxfield's bid of $505,000 with an offer of $510,000.
Mr. Jimenez did not return phone calls yesterday seeking comment about the source of his money and his relationship with Mr. Jennings and his former wife. In an earlier interview with The Los Angeles Times, Mr. Jimenez was quoted as saying that the money would come from his life savings, though in court testimony he said the money was a loan from the landlord of the building where Bryco manufactured its guns.
A spokeswoman for the United States bankruptcy trustee said she would not comment on the case because it was still pending.
Other records provided by Mr. Ruggieri show that on the day of the bankruptcy decision, Janice Jennings's company, Shining Star Investments in Lewisville, Tex., also issued a purchase order for $1.5 million worth of new pistols to Jimenez Arms, the company formed by Mr. Jimenez to buy Bryco. Shining Star Investments then made a down payment to Mr. Jimenez for $430,000, the money that was wired to him.
It is unclear how Mr. Jimenez can fulfill the order since he does not have a license to manufacture guns in California, according to the state's Department of Justice.
A gun dealer in Oklahoma, who spoke on the condition he not be named because he feared the reaction of gun owners, said Janice Jennings had contacted him earlier this week offering to sell some handguns from Jimenez Arms. The dealer said Ms. Jennings had told him the guns were close copies of the Bryco 9-millimeter semiautomatic weapon.
Both Mr. Jennings and his former wife have said that they have had nothing to do with Jimenez Arms and are no longer involved in the gun business.
Ms. Jennings did not return a phone call to the office of Shining Star Investments.
Copyright 2004 The New York Times Company