Out Of State C&R Transfer Nightmare - Avoiding "Straw Purchase"

[honos-et-virtus]

Out Of State C&R Transfer Nightmare - Avoiding "Straw Purchase"

Players:
Player Number 1
____ Myself here in California (non-licensed)
Player Number 2
____ My licensed California transfer dealer
Player Number 3
____ Out of State Licensed auction house dealer
Player Number 4
____ My Out of State friend and contact also personal friend of auction owner

Situation/Scenario
I have been searching for a particular C&R a rifle a long time.
One turns up at an out of state auction.

I instruct my Out of State Friend to bid on this rifle and he wins the auction and pays bid amount and auction fees, on my behalf.

The intent was for him not to register the rifle in his name. But, rather have the auction house transfer the rifle to me through my transfer dealer here in California. My friend would not need to complete a 4473.

Initially this was OK with the auction dealer as my friend actually helped dealer prepare rifle for shipment, provided contact information for myself and my transfer dealer, etc. Auction house dealer actually contacted my California transfer dealer and made arrangements to ship rifle. My understanding is that this type of "dealer-thru-dealer-to-registered-owner" is commonplace.

Two weeks later now the auction dealer is reluctant to send rifle to California. Reasons unknown.

Knowing that I can't force the auction house to do something you're not willing to do, what recourse do I have?

In order to complete the transaction would it be a "Straw Purchase" if my friend told the auction dealer something to this effect,

"Well... I'm sorry I tried to do something you are not OK with. I'll just take a loss on this transaction. So, just transfer the rifle to me on a 4473 and we will be done with this matter"

He then walks away with the rifle.

Further more.... Would it still be a "Staw Purchase" If at a later date, he offers to sell to me, the same rifle and is willing to do a ppt to me, through my licensed dealer.

[SkyHawk]

If he buys it with the intent to gift for you it is not lying on the 4473. If he buys it knowing he is going to transfer it to you now or later for a money exchange, it is lying on the 4473.

See Abramski vs U.S. https://www.supremecourt.gov/opinion...-1493_5468.pdf

[honos-et-virtus]

If he buys it with the intent to gift for you it is not lying on the 4473. If he buys it knowing he is going to transfer it to you now or later for a money exchange, it is lying on the 4473.

See Abramski vs U.S. https://www.supremecourt.gov/opinion...-1493_5468.pdf

SkyHawk,
Thank You for you reply.

I have read the instructions on Form 4473 regarding purchase as a "gift".
I have also read the SCOTUS decision your referenced.

Problem now is that the out of state dealer knows what the original intent was for this transaction.

It was never intended to be anything other than a dealer to dealer transfer and then a legal transfer to me. There was never any attempt to circumvent the law. All of what has transpired up to date has been fully disclosed, understood and agreed upon.

Now for what ever reason the dealer is having second thoughts (or un-grounded fears) and does not seem to want to move this transaction along. Maybe since this is an auction type of transaction where "all sales are final", he (the auction owner) feels he can declare the purchase voided due to the fact that it can not me completed within the constrains of the law. There-by keep the monies for the failed transaction and then re-sell the item.

Reading question 11a on the 4473 and the instructions for that line item, there are not any means to declare that said purchase, is intended as a "gift". One would assume that if there is a clause for gift giving, then the person completing form 4473 would have to declare the name and other information of the intended recipient.

I personally have not transferred any money to the dealer for this purchase, nor have I paid any monies to my friend earmarked for this purchase. My friend has paid the auction dealer the full amount due for this purchase. I was to re-reimburse my friend at some point after the item was delivered to my transfer dealer.

It now appears to me, that since all parties know how this transaction was originally intended to be executed, that there are not any legal means to it's resolve. That is other than trying to convince the auction dealer to go ahead and ship to my California transfer dealer.

Is this truly the final word on this matter?

Any other thoughts?

[kemasa]

There is no requirement that if the person is buying a firearm as a gift that they list who the gift is for, but it has to really be a gift.

I would suspect that the person at the auction house has a concern and the only way to deal with that is to try to talk to them and see what the real issue is. Your friend really can't fill out the 4473 since it was intended to be sold to you, so he is not the actual purchaser and it was not intended as a gift (although he could change his mind on that, but again, it has to really be a gift).

There is nothing illegal about shipping it to a CA FFL and having you fill it out. You could see if the seller will ship it to a local FFL, then have that FFL ship it to CA.

[honos-et-virtus]

kemasa, Thank You

........ it was not intended as a gift (although he could change his mind on that, but again, it has to really be a gift).

There is nothing illegal about shipping it to a CA FFL and having you fill it out. You could see if the seller will ship it to a local FFL, then have that FFL ship it to CA.

This law is so flawed. Like so many other firearm related laws.
Sure a person can change their mind. How could it ever be proven otherwise?
"Really has to be a gift" How does one go about proving if it is or isn't a gift?

So let's say that this friend does in fact change his mind and wants to purchase this as a gift. He then completes the 4473 and on line 11a answers (truthfully) 'YES'. After being approved for the purchase, he then walks away with the C&R. Afterwords he is then allowed to ship directly to my FFL dealer and the FA is registered to me through the DROS process. Is that not correct?

The problem in having the C&R sent to another dealer within the state is the added charges.

I tried to research this but haven't been able to find something about it.
Apparently, there is an online site where out-of-state dealers have to log onto and acquire some type of number (perhaps related to a particular transaction).
What is this number??? Is there something in this process that could cause some problems or concerns for the dealer?

The dealer has never actually admitted that he does not want to complete the transfer. The rifle is all ready in a package, addressed and ready to go out. It's not like the dealer has to go out of way to ship it. He sells on-line and has UPS trucks pick up packages daily. From what I gather there is one excuse after another for about 2 1/2 weeks and there should not be any excuse. Shipping out merchandise is a part of this dealers business and he has a staff to do that work for him.

There is something else going on here. I'm beginning to wonder if the guy reads ads from GunBroker, Where 95% of everybody refuses to sell or ship anything to a California address. Maybe he has become addicted to drinking the same Kool-Aid.

All I want to do is have this transaction completed in a lawful way and not cause any problems for myself or anyone involved. I really do not know how to pursue this to a resolve until I find out what the problem(s) actually are.

I'm hoping for some alternatives that can be presented to the auction house dealer that he might be more comfortable with.

Still open for any ideas.

[Librarian]

Apparently, there is an online site where out-of-state dealers have to log onto and acquire some type of number (perhaps related to a particular transaction).
What is this number??? Is there something in this process that could cause some problems or concerns for the dealer?

Just to this 1 point, see https://oag.ca.gov/firearms/cflcoverview.

[SkyHawk]

If the auction seller is not willing to ship to CA that should be his problem not yours. That should not reflect negatively on you unless the auction terms clearly stated no CA shipments.

A C&R 03 FFL does not have to use the CFLC system to get approval to ship, nor does a non-licensee (regular joe).

And even if a Dealer 01 FFL is going to ship, using CFLC is simple. It is free. You don't talk to anyone, you just enter some basic info and it generates an approval form that you put in the box with the gun before shipping.

[kemasa]

This law is so flawed. Like so many other firearm related laws.
Sure a person can change their mind. How could it ever be proven otherwise?
"Really has to be a gift" How does one go about proving if it is or isn't a gift?

I agree. It should not be considered a straw purchase if ALL transfers go through a FFL since nothing is being hidden, but the SC does not agree.

Don't worry about proving it, just make sure it is the case and that you don't give or pay him anything. If charged, the government would, in theory, have to prove it, and as long as there is absolutely nothing to indicate otherwise and if it is really a gift, you should be ok.

So let's say that this friend does in fact change his mind and wants to purchase this as a gift. He then completes the 4473 and on line 11a answers (truthfully) 'YES'. After being approved for the purchase, he then walks away with the C&R. Afterwords he is then allowed to ship directly to my FFL dealer and the FA is registered to me through the DROS process. Is that not correct?

Depending on where this is occurring, and ignoring any possible waiting periods, yes, that is what would occur.

If he has a C&R FFL, then he would not have to fill out a 4473, which eliminates the straw purchase aspect, but then it could bring up doing business as a C&R FFL holder.

You would have to confirm that the FFL is willing to accept a firearm from a non-FFL. Some have policies against that, although it is not illegal.

The problem in having the C&R sent to another dealer within the state is the added charges.

Yes, but that is less than losing all the money.

I tried to research this but haven't been able to find something about it.
Apparently, there is an online site where out-of-state dealers have to log onto and acquire some type of number (perhaps related to a particular transaction).
What is this number??? Is there something in this process that could cause some problems or concerns for the dealer?

Yes, the CFLC, which a link has already been provided. It is required for any firearms shipped to a CA FFL from a FFL. It is pretty simple and easy to do, plus it is free. It is annoying and harassment, but that is another issue. If that is the issue, they can be talked to and walk them through the process. Some FFLs have issues with it, until they actually do it.

The dealer has never actually admitted that he does not want to complete the transfer. The rifle is all ready in a package, addressed and ready to go out. It's not like the dealer has to go out of way to ship it. He sells on-line and has UPS trucks pick up packages daily. From what I gather there is one excuse after another for about 2 1/2 weeks and there should not be any excuse. Shipping out merchandise is a part of this dealers business and he has a staff to do that work for him.

It could be the CFLC. That is critical to get it transferred since the CA FFL can not transfer it to you without it and it would have to be shipped back or turned over to the police without the letter.

There is something else going on here. I'm beginning to wonder if the guy reads ads from GunBroker, Where 95% of everybody refuses to sell or ship anything to a California address. Maybe he has become addicted to drinking the same Kool-Aid.

Perhaps. Is it possible to talk to the seller and see what exactly is going on?

All I want to do is have this transaction completed in a lawful way and not cause any problems for myself or anyone involved. I really do not know how to pursue this to a resolve until I find out what the problem(s) actually are.

The only way is to determine what exactly what the problem is is with communication. I suspect the CFLC could be more of an issue, mainly because it is an unknown to out of state FFLs. Education can solve that problem.

I'm hoping for some alternatives that can be presented to the auction house dealer that he might be more comfortable with.

Still open for any ideas.

The main idea is to talk to the person and find out what the issue is. If you don't know what is causing the problem, then it is really hard to determine a solution.

If the issue is with shipping to CA, I can try to talk to the auction house and walk them through the process. I could also talk to them if there is an issue in regards to the straw purchase aspect, which really does not exist as long as the 4473 is not filled out.

[honos-et-virtus]

Just to this 1 point, see https://oag.ca.gov/firearms/cflcoverview.

Thank you for the link regarding the CFLC system.

That is pretty much what I thought is was about.
If anything, it should serve to put the out of state shipper at ease regarding
who the firearm is being shipped to. It certainly proves that the receiving FFL is legitimate and that the firearm in question does not violate California law.

I know my California Transfer FFL holder has talked to the auction dealer and
most likely walked them through the process.
.
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[honos-et-virtus]

I want to thank; kemasa, SkyHawk and Librarian for all the very useful information.

I think at this point I have a pretty good idea what my options are within the law.
The last thing I want to do is to wave a flag stating that this might be some sort of a "Straw Purchase".
That was never the intent.
Since the auction dealer has went through the CFLC process then it is most likely not wise not to try and claim this purchase is now intended as a gift purchase

I want to clarify a couple of points.....

___ The auction house does not deal in firearms exclusively.
___ No one involved in this potential transfer is a C&R FFL holder.
___ I have not gotten my transfer dealer involved in this potential problem beyond the initial contact.
___ I have yet to talk directly to the auction dealer.

I appreciate the offer from you kemasa to talk to the auction dealer and explain the process of complying with the states CFLC system.
Although, I think this was done via my transfer dealer.

It appears that if the auction dealer refuses to do the transfer to a third party and will not refund the auction bid amount, then there are only two options. Those being; forfeit the monies and consider it a loss, or, have my friend completed the 4473 and keep the firearm for himself and never transfer it to me.

At this point I and going to try and talk to the auction dealer directly and ascertain if there is in fact some type of problem and what I might be able to do to resolve any concerns.

I will keep you posted as to how this proceeds.
.

[ugimports]

This may help as well:

http://www.ugimports.com/docs/Sign_Up_Process_-_CA_DOJ_CFLC.pdf

Obviously, they would substitute the CFD # with your CA FFL (not use mine) to generate the letter.

[honos-et-virtus]

This may help as well:

http://www.ugimports.com/docs/Sign_Up_Process_-_CA_DOJ_CFLC.pdf

Obviously, they would substitute the CFD # with your CA FFL (not use mine) to generate the letter.

Thanks,

It's my understanding that this has already been completed.
But I will not know for sure until I have a chance to talk with the dealer.

I looked at your website. Nice business.
I may use your services next time.
.

[honos-et-virtus]

UpDate

I have recently corresponded with the auction dealer.
Seems his problem is actually taking the time to sit down at his PC to complete the CFLC process. I understand that registering and getting a shipping confirmation number only takes a few minutes. Perhaps he is somewhat intimidated about how to do this. He tell me he will work on getting this done and having the rifle shipped.

Time will tell.
I will keep you posted.
.
.

[ugimports]

UpDate

I have recently corresponded with the auction dealer.
Seems his problem is actually taking the time to sit down at his PC to complete the CFLC process. I understand that registering and getting a shipping confirmation number only takes a few minutes. Perhaps he is somewhat intimidated about how to do this. He tell me he will work on getting this done and having the rifle shipped.

Time will tell.
I will keep you posted.
.
.

I have offered to fill the CFLC form out for the sending dealer if they needed it. Your receiving dealer may also. The only information that is needed in addition to their FFL is email address and contact name (if different then the person you are corresponding with).

I've done this for 1 or 2 dealers and after I get the needed info I send them their username/password for future use.

[honos-et-virtus]

I have offered to fill the CFLC form out for the sending dealer if they needed it. Your receiving dealer may also.

ugimports...

I know you offered and I do appreciate that.
My dealer has also offered to help, But perhaps not to the extent you just now have. My dealer has told me that he walked them through the process. Apparently not when the auction dealer was actually on line.

My friend who knows the auction dealer has offered to help since he understands computers well enough. I hate to think that this guy who runs a very large auction and has an administrative staff is having trouble with what seems to be a simple process.

For now. I'm going to wait until the end of today and see what transpires.
I may be asking for your help.

Thanks
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