Typical Yellow Journalism. I've seen dozens of these kinds of stories where they report finding illegal machine guns, rocket launchers, artillery, etc.
There was a well-publicized gun show bust in CA a few years ago, and Attorney General Lockyer held a press conference displaying some of the items confiscated. Four people were arrested. As it turns out, the rocket launchers were empty LAWS rocket tubes and the artillery shells were just oversized paperweights. The illegal machine guns were in fact legal semi-automatics and IIRC, charges were dropped against three of the four. I never found out what happened to the fourth one but I suspect charges were dropped against him too.
When the facts about the gun show bust came out, they weren't reported. So what we have is a public conditioned to believe that gun shows are bazzars for weapons of mass destruction. [:(!]