Consider a few of the numerous very real new risks to Internet Gun Auction operators and participants, before you decide whether to participate in one of the auctions, do internet gun transfers, or invest in a new Retail oriented FFL:
1. Internet GUN AUCTION operators, buyers, sellers, and especially transfer dealers, are suddenly sued and criminally prosecuted for negligent homicide when a NICS trace determines they facilitated a homicide with a transfer on their auction site not involving a background check, or a weapon with a previous history in a crime. There are thousands of these transactions each week on the major gun auctions, and VPC and other litigators are flush with money to attack every link in the distribution chain, especially internet gun auction sites and their transfer dealers, as well as shows that do not and cannot manage the 4473 process. Statements on gun auction sites to "go through a dealer" are regularly ignored by private sellers, and the statements will not be deemed a defense by numerous new liberally appointed life term federal judges, especially for transfer dealers participating in these transactions. All that's required: VPC figures this out!
2. Web GUN AUCTION CEOs are sued or criminally prosecuted as intermediaries in homicides that involve their auction sites in the chain of custody of the weapon involved. We, in fact, just had a trace from one exactly like that, where FBI was extremely interested in the auction site's commission on the transfer, and whether it was a percent of the value of the firearm. Again, it takes no new laws for this to kick in, only a simple ATF field policy change.
3. The retail gun dealer's associations (RDA's) throw in with VPC and other litigators to crush online gun auctions, because most retailers see them as a threat that cuts into their business and margins anyway. Think it can't happen? It's exactly what happened under Clinton to home based FFL's! With accessories and reloading supplies in such short supply (the few remaining high margin items), retail FFLs are boycotting the auctions and refusing to do transfers for them because they are crushing retail margins due to the (soon to close) loophole of out of state tax exemptions in a few states. 23 States have now held that holding a gun overnight for a transfer subjects the transferring dealer to State Tax liability. How long will it be before the other financially strapped States figure this out?
4. New Federal and State statutes, or ATF policy, disallow FFL's to transfer solely for the sake of an internet sale. VPC only needs to figure this out, and present it to Pres. O. Retail FFLs will do extremely well, and be exempt from prosecution, while web transfer-accepting dealers and private sellers will be aggressively prosecuted and shut down.
5. Insurers will soon no longer cover violence derived from a transfer only. This and #4 above will make it impossible for INTERNET GUN AUCTION OPERATORS to conduct business, because there will be no transferring dealers left. Feds/ATF, States, Cities and VPC can initiate these actions by requiring specific insurance riders, or even just reserves, for internet transfer dealers, which the flagging insurance industry will not be able to provide. Our attorneys have shown that this could easily be implemented through existing State insurance, tax and banking departments, who already manage reserves and bonds, just as Clinton did his first term.
6. As during Clinton, economically strapped States will soon wake up to the missing revenue of internet gun transfers, and start charging 8 to 10% for each transfer. When added to shipping, this will make retail prices lower than buying on Internet Gun Auction Sites, which will please retailers. ATF can easily go to 46 of the 50 States right now, with no new laws needed, and with a simple, quiet policy change (doesn't even require an executive order!) by President Obama, enforce sales and use tax laws at the transferring dealer level, retroactively fining and shutting down any internet transfer dealer that is doing internet transfers and not collecting State taxes. All ATF has to do to grind Online Gun Auctions and Classifieds to a halt is figure this out, and let President Obama know about it!
Our legal team has identified provisions in most States that could make these fines immediate, and no dealer would accept transfers any longer, shutting down INTERNET GUN AUCTIONS almost immediately. Think this is far fetched? Clinton used this exact, subtle, quiet tactic to eliminate over 195,000 home FFL's in less than a year (with VPC's help), and today it would work equally well against the gun auctions, sellers, buyers and their transfer dealers involved in gun violence.
GUN AUCTION lawyers might argue that the Feds have no authority to enforce State laws-- but they would be wrong! Ask any dealer today who is asked during an ATF audit to show them their STATE tax records. This is a very powerful, simple step Pres. Obama could take that would not affect the 2010 elections, be below the radar, please his VPC/ left base to no end, and not even be opposed or even noted by NRA or the retail gun lobby and RDA's! VPC has made little progress against shows, and now see much more fertile ground with internet transfer dealers-- a similar strategy to the Clinton "home dealer" tax initiative, only updated for the cyber age. What VPC doesn't say is that RDA's SUPPORTED their last effort, in 1992, and will do so again against the internet venues!
7. Once VPC initiates a few cases and gets to Pres. Obama (once they figure this out) against transferring dealers, buyers and sellers, NO insurer will any longer cover transfer dealers. The problem is that a transfer dealer (and his insurer) do not think he is accepting liability for the safety of a firearm if he is "just" transferring it for a private seller or another dealer, but when the gun blows up in the purchaser's face, transfer dealers and their insurers will find out how fast the original INTERNET GUN AUCTION seller disappears, leaving them holding a million dollar bag for a $25 transfer fee. When the REAL RISKS are actuarially factored into these transfers, the fees will make such transfers bad business for ANY dealer, most of whom will not be able to get insured. Torts against manufacturers, dealers and distributors will easily extend to the auction venues as well. These suits and prosecutions are exactly what killed local gun classified ads, and caused Craig's list and other local auctions and classifieds to ban gun listings! It isn't that there aren't some pro-gun classifieds, it is that the transfer risk is not worth the risk of prosecution and VPC suits to them!
But wait, Pres. Obama and VPC don't even have to wait for torts! All they have to do is require State validated proof of reserves, just like car insurance, for internet transfer dealers and sellers. Most IT dealers are already on the shaky edge of not wanting to do internet transfers due to the risks and hassles anyway. If Pres. O and VPC figure out how easy bonding/ reserve rules are under any State that accepts Federal or Bank bailout funds, execution will be fast, cheap and immediate. The Left has called Pres. O a coward for not supporting an assault ban, so he's quietly had to go after ammo and other back door efforts due to 52 blue dog Dems who don't want to lose their 2010 seats. This is NOT a problem with the above, and will please millions in his base with very little effort other than simple policy changes at ATF, and not harm the blue dogs at all. On top of that, the retail gun industry will SUPPORT him, and NRA will look the other way!
8. If an internet GUN AUCTION seller is an FFL, it is likely they have criminal protection via liability insurance, or a corporate structure to protect their personal assets against one of the many new civil lawsuits by gun violence victims, and the ambulance chasing attorneys who encourage them with VPC's funds. On the other hand, PRIVATE Gun Auction sellers and transfer-only FFLs (especially at retail) are now at high risk with DC run entirely by lawyers, and the trial lawyers association funding elections, and actively pursuing sellers with VPC help.
Even if a private seller transfers through a dealer on the other end, VPC and their private attorneys are now suing private sellers as part of the "chain of violence" in civil court. The point of this is that the private seller is NOT protected, and a suit will likely cost them everything, including their home, if a gun they auctioned was used in a murder. Even if they "prevail," the legal costs can exceed $50,000, and you can bet the INTERNET GUN AUCTION OPERATORS will offer no help. In fact, the gun auction operators turn over auction records to ATF and FBI all the time, and even have special "customer service" links for law enforcement. Before Obama, this information could not be used in civil court-- it now can, and is.
Are you an FFL who has accepted an out of state driver's license from an internet gun auction site seller for a transfer? CHECK WITH YOUR ATTORNEY IMMEDIATELY! We have gotten reports from our network of over 18,000 dealers that ATF now considers this a violation, because cross-state line transfers are only allowed dealer to dealer! DO NOT find this out the hard way in your next ATF audit! ATF has already received a letter from DC to look for these, they showed it to one of our dealers! And, if the seller used USPS without a 1508 (which they can't get without an FFL), you can be held criminally liable for facilitation.
We have dozens of other examples, most transferring FFLs already know about them, and hundreds more are refusing to do internet transfers each day. One we haven't even hinted at would shut the GUN AUCTION sites down almost overnight, and give P. Obama a huge win with VPC without compromising the 2010 elections, as it is simple ATF field policy memo! NRA told us privately they wouldn't even try to fight it! Click HERE to email us if you share our concern. Click HERE for info on getting your own FFL, as RETAIL is going to rebound in a HUGE way once the INTERNET GUN auctions are shut down with the above, and other actions. Mr. Obama can even claim he's created jobs by shutting them down, in the retail sector, and the RDA's will support him! "Closed door" gun auction sellers compete with retail, and when they get around State tax laws, often illegally, they destroy margins for local retailers that do follow the law!
9. Have you ever used or accepted a credit card for a gun auction item? A number of large sellers and distributors have recently gone out of business when the credit card processing companies determined that shipping a gun across state lines, even to an FFL, violates their card processing policy! They then seize funds for ALL the transactions from those dealers, even at retail! Retail (local to local) is still exempt from these holds at this writing. The painful thing is that the transfer dealer can do NOTHING about this, as the processing company is another bank, and simply seizes and freezes the funds electronically at your own bank, and there is nothing your bank can do about it!
These funds are either permanently frozen, or held for "policy violations and risk mitigation" for a year or longer! This is not JUST Paypal and other anti-gun processors, it is ALL the processors, who themselves are now adverse to the new prosecution risks. VPC also is engaged in a grassroots effort to find any auction on any internet gun auction site that mentions Paypal or taking credit cards, and are reporting this to Paypal and the credit card risk management departments at Citigroup, Bank America, First Data and Authorize.net. The largest in the world has even told us they are actively shutting down cross state gun transfers even BETWEEN FFLs! We're also researching new efforts by VPC to prosecute under postal regs when Postal Money Orders are used in a sale, as the new Administration has already issued an executive order requiring postal inspectors to forward all 1508 requests to ATF.
*Think the gun auction owners are not aware of these risks? One of the largest threatened us with legal action if we refused to take this site down! They DO NOT want transfer dealers and sellers to know about these significant new risks of buying,selling and especially transferring guns from online auctions. RETAIL FFLS will be exempt from these new prosecutions, and in fact their businesses will thrive and experience great new growth, just like they have in California since DOJ shut down the INTERNET GUN AUCTIONS there by requiring out of state transfer dealers and sellers to register with CA DOJ, carry expensive new insurance, and required in-state transfer dealers and buyers to pay significant new fees. By our own survey, 2/3 of retail FFLs who used to do internet transfers will no longer do them due to liability and the threat of the loss of their insurance and prosecution for the past history of the gun. You've probably seen this in your own town, especially if you live near a big city. The remaining home-based FFLs and other transfer dealers either do not know these risks, or do not have insurance, and are at extreme risk. Check with your insurance provider if you are facilitating these transactions, or buying and selling on an A GUN AUCTION SITE, especially if the weapon is used, or new/old stock and out of warranty. If you BUY on an internet auction, sell the gun later, and it is subsequently used in a crime, you can also now be prosecuted when the INTERNET AUCTION operator gives the name of your transfer dealer to the government or local law enforcement. They do this every day, even though they are not FFLs themselves! With insurance underwriters in a world of hurt due to the financial crisis, how long will it be before the insurers themselves stop underwriting GUN AUCTION operators? Those that self insure will then find themselves at even greater risk, civilly and criminally.
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