PMM,
Yes, Richard was working out of his house (I have known the guy for a number of years), selling mostly on the Internet. This no longer meets MA laws (requires commercially zoned location ONLY), and thus doesn't meet BATFE regs. Ergo, his FFL was either "pulled" or not renewed, as there is no exceptions in MGLs.
As of ~1 day ago (a number of days after his arrest) he still had 61 guns, ammo and mags (including LE restricted-felony for mere possession in MA . . . also true for guns and ammo if his LTC was pulled, which sounds likely) listed for auction on one of the better known online auction sites. Some of the auctions started yesterday! He certainly has brass balls for not laying low until this whole situation is resolved.
The laws suck, but they are the law and BATFE has no sense of humor about violators! More has been posted on the NES forums about this.