Please Help--Quick Straw Purchase Question

[fiddletown]

I understand it is a straw purchase if I give "Joe" money to buy a gun that he is going to give to me, but what if I just loan him the money with the intention of him paying me back on a schedule decided between the two of us?...

Do you think anyone is going to believe you -- especially if "Joe" hasn't paid you back?

...Wouldn't that be like me buying a gun with a credit card? Someone else, (the bank) would be using their money to purchase it for me, and I would pay them back on a set schedule.

Except the bank wouldn't be winding up with the gun.

[Moto4Fun]

This is at least the second thread where people are getting bent out of shape over a discussion of 'straw purchase'.

First item: this is Federal law we are talking about. Please stop trying to apply ordinary logic to the situation - it works no better than trying that with California law. These BATF things are all malum prohibitum, 'bad because we say so', and it is impossible to reason to the conclusion that one of these acts might be illegal.

Second item: the issue is lying on the Federal paperwork, the 4473, about who is actually the purchaser.

Here's how that works.

You can buy me a gift.

You fill out the paperwork, and properly identify yourself as the buyer. You take your money, buy the gun, and later transfer the gun to me, following all applicable state and Federal laws. Happy Birthday, Merry Christmas!

That's all fine.

However, if I give you the money, and say to you 'please buy gun X for me', I am the buyer, not you.

If I give you the money, you are not buying the gun, I am. It does not matter that you are the one who goes to the store and fills out the paperwork, any more than if I give you money for beer and a pizza, and it doesn't matter if I give you the money before or after the purchase.

The act of transferring valuable consideration for a good is a commercial transaction, and anyone can do that on behalf of anyone else (though not always legally); the question that concerns BATF is who pays and who receives the benefit - THAT's the buyer.

Most of the time the person engaging in the transaction and who supplies the money and who benefits from the newly acquired good is the same person - but it could be as many as three - financier, purchase-processor, beneficiary (e.g. 'Son, here is $5 - go buy your mother a card for Mother's day': father is financier, son is purchase-processor, mother is beneficiary)

My money, I'm the buyer. Your money, you're the buyer.

If you would mark the 4473 that you are not the actual buyer, the FFL will cancel the sale.

If you would mark the 4473 and say you are the actual buyer, and in fact you would be using my money, or you would expect to be reimbursed by me for that purchase, and the gun is eventually going to me or someone not you, you would have lied - and that's the crime.

The BATF via the 4473 expects, and enforces, that all three possible roles (again, financier, purchase-processor, beneficiary) are one and the same person. When more than one person fills these roles, BATF calls it a straw purchase.

This post seems to address the nuts and bolts of the legality of a straw purchase as it applies to the OP. Since I am not a lawyer, I would like to hear the opinion of one. If the father uses money he took out of his ATM account, and he goes and buys the gun, and receives/takes possession of the gun; how is he not the purchaser. How would beneficiary be defined? I would assume that the person who receives and possesses the goods is the beneficiary. Once that transaction (including all three components) has taken place, the father is free to do what he wishes.

Now if the son were to be present, and hand over his money and then receive the goods, then the father would only be performing one of three components.

It seems that the lawyer here is arguing that the intent makes the transaction a straw purchase. That the son found the gun and wants the father to procure it, does this preclude two honest transactions from taking place? I share the opinions of others that no prosecution would take place because it is father to son and the burden of proving that something illegal took place would be very difficult. But that is my opinion. Some seem to think this is cut and dry illegal, but I don't think it is that definitive.

[fiddletown]

This post seems to address the nuts and bolts of the legality of a straw purchase as it applies to the OP. Since I am not a lawyer, I would like to hear the opinion of one. If the father uses money he took out of his ATM account, and he goes and buys the gun, and receives/takes possession of the gun; how is he not the purchaser....

I am a lawyer, and as I've written many times before -

[1] If father takes his money, buys the gun and gives the gun to someone else as a gift, free and clear without reimbursement of any kind, father is the actual purchaser; and it is not a straw purchase.

[2] If father takes his money and buys the gun honestly intending to keep it for himself and later sells it to another person, father is the actual purchaser; and it is not a straw purchase.

[3] If father takes his money and buys the gun intending to take it to the gun show next week to see if he might be able to sell it to someone at a profit, father is the actual purchaser; and it's not a straw purchase. He may, however have other problems if he manages to sell the gun at the gun show, and the transfer there isn't handled properly. He might also have problems if he does this sort of thing too frequently, and the ATF decides he's acting as a dealer without the necessary license.

[4] If father takes his money and buys the gun with the understanding that he is going to transfer the gun to X and that X is going to reimburse him for it, father is not the actual purchaser. He is advancing X the money and buying the gun for and on behalf of X, as X's agent. So this would be an illegal straw purchase.

...It seems that the lawyer here is arguing that the intent makes the transaction a straw purchase....

Yes it is a question of intent. And it may be difficult to prove whether what took place was the transaction described in [2] or [4], but that's question of "getting away with it", not whether the transaction is legal.

Note that prosecutors in various situations can convince juries of intent, often from circumstantial evidence. A slip of the tongue, posting something on the Internet, tracks left by money transfers have all led, in one way or another, and in various contexts, helped convince a jury of intent.

...I share the opinions of others that no prosecution would take place because it is father to son and the burden of proving that something illegal took place would be very difficult ...

But again, that's about "getting away with it."

[lilro]

[3] If father takes his money and buys the gun intending to take it to the gun show next week to see if he might be able to sell it to someone at a profit, father is the actual purchaser; and it's not a straw purchase. He may, however have other problems if he manages to sell the gun at the gun show, and the transfer there isn't handled properly. He might also have problems if he does this sort of thing too frequently, and the ATF decides he's acting as a dealer without the necessary license.

How is this legal but the scenario I suggested of him SELLING it to his son through normal PPT instead of intrafamilial transfer illegal? Both include a purchase with the intent to sell.

[snobord99]

How is this legal but the scenario I suggested of him SELLING it to his son through normal PPT instead of intrafamilial transfer illegal? Both include a purchase with the intent to sell.

I think you confused Fiddle's answer to your scenario. He didn't say that that was per se illegal; he said that it would be illegal if it had been arranged ahead of time. In that scenario, if father bought it intending to keep it and finds out 10 minutes later he doesn't like it and sells it to the son, it's all kosher.

This current example from Fiddle is legal from a straw purchaser prospective precisely because there was no prearranged agreement another particular person would take the firearm. If the father bought the gun thinking "I'm going to buy this and it's going to X (and not as a gift)," then he's not the actual purchaser. If he's thinking "I'm going to buy this and only keep it as long as I can sell it to someone," then he's the actual purchaser. Think of it this way, in the former if X says after the father buys it "I don't want it" father's probably thinking "WTF? I don't want it, you owe me $." In the latter, if father can't sell it at the gun show, he's thinking "oh well, I'll try again later."

[fiddletown]

How is this legal but the scenario I suggested of him SELLING it to his son through normal PPT instead of intrafamilial transfer illegal? Both include a purchase with the intent to sell.

snobord99 beat me to it.

And looking at it from another perspective, in that example father isn't buying the gun for anyone in particular, and no advance arrangements had been made. He is speculating and taking the risk that no one will want to buy the gun from him. And if no one buys it, he's stuck with it.

(If he's buying the gun by arrangement for someone else, and his principal, the guy he's buying the gun for, reneges, he, the agent, has legal remedies.)

[Turbinator]

I am a lawyer, and as I've written many times before -

[1] If father takes his money, buys the gun and gives the gun to someone else as a gift, free and clear without reimbursement of any kind, father is the actual purchaser; and it is not a straw purchase.

WOW! So, I think an FFL once actually twisted this around for me. Here was my scenario.

I was buying a handgun for my dad as a gift.

I told the FFL this, and he insisted then that that my dad do the actual DROS, instead of me.

In this case, I was the actual purchaser - I had already provided money for the pistol - yet he was forcing my dad to do the DROS. Sounds like this wasn't quite run the way it should have been.

This took place about 18 years ago..

Turby

[fiddletown]

WOW! So, I think an FFL once actually twisted this around for me. Here was my scenario.

I was buying a handgun for my dad as a gift.

I told the FFL this, and he insisted then that that my dad do the actual DROS, instead of me.

In this case, I was the actual purchaser - I had already provided money for the pistol - yet he was forcing my dad to do the DROS. Sounds like this wasn't quite run the way it should have been.

This took place about 18 years ago...

Sounds like the FFL went a little overboard. Of course, I'm not certain what the law was 18 years ago, and the important thing is that your father got his gun.

But under federal as it is now, it would be entirely kosher for you to buy the gun and complete the 4473 and DROS as the actual purchaser. And under current state law, as an intrafamilial transfer you could just hand it to your father, as long as he has an HSC, and he'd file the correct paperwork. Of course 18 years ago there was no HSC, but otherwise I doubt it would have been much different back then.

[OldShooter32]

Straw purchase is usually a case of someone who can qualify buying a gun for someone who can't...this thread has become too convoluted and the transaction doesn't meet the common sense rule...but then, I think that rule died a number of years ago.

[fiddletown]

Straw purchase is usually a case of someone who can qualify buying a gun for someone who can't...this thread has become too convoluted and the transaction doesn't meet the common sense rule...but then, I think that rule died a number of years ago.

And yet another person who has it wrong.

This is a question of federal law, and federal law was explained by ATF way back in post 3.

As Justin Case so eloquently put it here in post 91:

...Many things can be learned from this thread. Other than a very clear explication of the law (by a lawyer, no less - and by a very meticulous Librarian); I found it to be entertaining in a slightly disconcerting way to watch in wonder as people (who are not lawyers) made clowns of themselves arguing a point of law with a lawyer...

[strongpoint]

Since I am not a lawyer, I would like to hear the opinion of one. If the father uses money he took out of his ATM account, and he goes and buys the gun, and receives/takes possession of the gun; how is he not the purchaser. How would beneficiary be defined? I would assume that the person who receives and possesses the goods is the beneficiary. Once that transaction (including all three components) has taken place, the father is free to do what he wishes.

look, IANAL, but this is really clear: if, at the time of purchase, someone other than the purchaser is intended to be the eventual owner of the firearm, then THAT person is the beneficiary. re-read librarian's explanation of the three roles.

It seems that the lawyer here is arguing that the intent makes the transaction a straw purchase. ... Some seem to think this is cut and dry illegal, but I don't think it is that definitive.

it's not the lawyer, it's the ATF -- and it is precisely that definitive, spelled out in black and white on form 4473. read what the form says about question 11.a and the consequences of an untruthful response, then read ATF's guidance on how to interpret the question.

Straw purchase is usually a case of someone who can qualify buying a gun for someone who can't...this thread has become too convoluted and the transaction doesn't meet the common sense rule...but then, I think that rule died a number of years ago.

the thread may be convoluted, but the rules are simple. what you describe is illegal, but so are other actions. why are posters in this thread insisting that this isn't so when ATF spells these things out in ways that are easy to understand?

[dieselpower]

YOURE WRONG AND WHAT YOU ARE ADVOCATING IS ILLEGAL.
DO YOU WANT TO KEEP PUSHING BECAUSE FRANKLY ITS JUST THREE CLICKS OF A MOUSE TO KICK YOU TO THE CURB.

K.

[fiddletown]

I realize I am not allowed to contradict you, since you are a God of law around here...but you are again...wrong. Buying even 1 firearm with the forethought of selling it for profit is covered under the law...without an FFL its ILLEGAL...

thats another thing I guess you missed in the GCA and NFA laws...

BUT HEY NO PROBLEM you are a lawyer...its ok for you to give bad info on these forums...you are protected.

Nope.

18 USC 922(a)(1) provides, in pertinent part (emphasis added):

(A) except a licensed importer, licensed manufacturer, or licensed dealer, to engage in the business of importing, manufacturing, or dealing in firearms, or in the course of such business to ship, transport, or receive any firearm in interstate or foreign commerce;...

"Engaged in the business" is defined at 18 USC 921(a)(21) as follows (emphasis added):

as a regular course of trade or business with the principal objective of livelihood and profit through the repetitive purchase and resale of firearms, but such term shall not include a person who makes occasional sales, exchanges, or purchases of firearms for the enhancement of a personal collection or for a hobby, or who sells all or part of his personal collection of firearms;..

An occasional purchase and sale of a firearm at a profit doesn't make one "engaged in the business." One must do that repetitively in order to be "engaged in the business" and thus unlawfully dealing in firearms without a license.

The difficulty for someone who plans to do that sort of thing is that it's not clear where the line is.

[drclark]

I think that what has alot of people wrapped around the axle is the "intent" crime regarding the intent of the purchaser at the time of filling out the 4473 (and the ability or lack thereof to prove intent)

Under a strict interpretation it could be argued that a firearm collector/investor who buys and sells rare/collectible guns with the intent of turning a profit would really need to be a dealer to stay legit. Ridiculous example: if it was my intent to buy up every colt python in existence in CA and then slowly sell them off at 1000% profit (since I now own the entire supply) would make me a straw purchaser no matter how slowly I sold them off since I never had the intent of buying the firearm for personal consumption/use. My intent was always to resell later at a higher price.

This intent issue might be where some LEOs walk a fine line in using their ability to purchase non-roster pistols and then turn around and resell them at a markup later. Sure, its completely legal to buy a gun decide you don't like it and sell it ppt at fair market value... however do that too many times per year it might raise a red flag (and be pretty hard to explain why you bought and sold the same make and model of handgun more than once).

In general "intent" crime can difficult to understand because it is not necessarily about the end result of the events that actually took place but the mindset of the folks involved when the events took place. While intent may be difficult to prove, I think what some people might be getting riled up about is that IF falsely accused of a straw purchase, your intent is equally difficult to defend.

Scenario A: Johnny wants to buy an offlist handgun. Goes to his buddy Joe who is a cop and says, hey I really want an XDm but I can't get one in CA without going thru the SSE hoops. Joe says, I can get you one no-prob since I am roster exempt, just pay me back sometime after we ppt to you. Joe buys the XDm and in the process commits a crime because his sole intent of purchasing the gun is to resell to Johnny thus lying on the 4473.

Scenario B: Johnny laments to his cop buddy Joe about how it sucks that he can't easily get an XDm in CA. Joe remembers how Johnny saved his bacon when serving overseas together and decides to use his roster exempt status and buy Johnny an XDm as a gift. Johnny is floored and tries to pay Joe back, but Joe refuses.

Scenario C: Johnny reads the latest version of Guns and Ammo and is all jazzed about the new XDm only to findout he cannot get it CA due to the roster. Joe, had purchased an XDm a couple of months ago but found he really like the SW M&P over the XDm. The XDm has been sitting in the safe for months. Joe decides to sell the XDm to Johnny via ppt to make room in the safe for future purchases.

In all three scenarios, Joe and Johnny are non-prohibited persons. In all three scenarios, the net result is the same; Johnny gets an XDm from Joe (who purchased it with his roster exempt status). Scenario A is illegal due to the purchase with the intent to resell regardless of $$ between Joe and Johnny changes hands prior to or after Joe executes the purchase. Scenarios B and C are legit.

Its all really fine lines between legal and illegal. The gift scenario is difficult because, gifts are rarely one-way expressions of gratitude. In the above scenario, if Johnny reciprocates the gesture and gives Joe a gift of roughly the same value as the XDm at a later date, could an overzealous prosecutor accuse Joe of a being a straw purchaser? If so, how long should the recipient of a gifted firearm wait until they reciprocate a gift back to the original purchaser?

Another example that might fall into the gray zone is couples where one spouse works and the other is a stay at home spouse. My wife does not have an income of her own; rather we decided it was more financially beneficial for her to stay home and raise the kids. I give her a monthly allowance into her personal checking account to cover daily expenses. If she decides to use that money to buy a firearm for me as a gift, would that technically make her a straw purchaser since the "source of the $$-me" is considered the actual buyer?

Related but maybe slightly off topic, how does a non-person entity like a corporation or NFA-trust purchase a firearm. By definition, the person buying the firearm is acting as an agent of the corp/trust... or does that fall into a completely different realm of paperwork instead of a 4473?

A parallel idea of intent is the 12020 threads regarding clubs, etc. Carrying a baseball bat and glove in the trunk of your car for the weekly pick up game after work is perfectly legal. Carrying a baseball bat in your trunk "for protection in case you get mugged" is a felony. Same idea here with the straw purchase and intent as buyer of the firearm.

Interesting thread so far,
drc

[snobord99]

Straw purchase is usually a case of someone who can qualify buying a gun for someone who can't...

Agreed; however, this is a discussion of the legal, not the practical.

Usually, only people going 70+ in a 65 zone get a speeding ticket; however, doing 69 is still not legal and one could still be given a ticket for going 69 in a 65.