First, while most were M11/9s and MAC 10s, there were a few other entry-level MGs used as conversion hosts, including IIRC a WWII Japanese LMG.

As far as avoiding such scams, you really have to do as much studying as you can. First, learn what a correct one looks like, and find some telltale clues. Ask the owner how long he has owned it –– if it's 10 years or more, it's original: This conspiracy only started a few years ago ... and really, through the mid-'90s, MGs were so cheap, there was no reason to fake them.

This is where an FOIA report comes in handy. It will tell you exactly how it was initially manufactured, and by whom (hint: M60s were never made in 9mm.) Ask the seller if he has an FOIA; alternatively, you could ask if he will accept a deposit pending an FOIA request, with the balance due when you receive it. (As noted, only the registered owner may request an FOIA report.)

Of course, some owners/sellers won't accept those terms –– in fact, I'd bet that many would not, because of the delay.

Alternatively, once the Form 4 goes pending, the transferee can call ATF and ask them some relevant questions, like the name of the manufacturer –– that can't be changed in the Registry, only caliber and lengths are changable. For instance, SWD never made any M240s.

You also could read them the names of the FFL/SOT defendants and ask them if any one of those ever was the registered owner. ATF will not tell you which one, or anything specific, but they might say whether it belonged to someone in that group. Now, these FFL/SOTs did do a lot of legal transfers along with the hinky ones, but it's a clue.

Finally, you don't need to worry about M11's being fake, because due to their entry-level market value, there's no cheaper host to "upgrade."

Or you could just buy factory MGs.

FWIW, here is a page with links to the search warrant and indictments: http://www2.citypaper.com/news/story.asp?id=20486

There are six defendants charged with 107 counts. According to the linked documents, the FFL/SOTs indicted are: Hal Paul Goldstein,
Randolph Benjamin Rodman, George Dibril Clark III, Lorren Marc Kalish, James Patrick Arnberger, and Idan C. Greenberg.

The indictment lists 34 specific "remanufactured" machine guns, but since then, I have been told, ATF has identified dozens and dozens more.