BRENT D. WARD, United States Attorney BRUCE C. LUBECK, Assistant United States Attorney Attorneys for the United States of America 476 United States Courthouse 350 South Main Street Salt Lake City, Utah 84101 Telephone: (801) 524-5682 IN THE UNITED STATES DISTRICT COURT DISTRICT OF UTAH, CENTRAL DIVISION UNITED STATES OF AMERICA, 86-CR-168S Plaintiff, vs. CHARLES WILLIAM GOFF, SR., TRIAL BRIEF et. al., Defendants. The United States of America, through the undersigned Assistant United States Attorney hereby submits the following Trial Brief dealing with various aspects of Federal Law related to firearms, recordkeeping requirements and other issues that may arise in this trial. ANALYSIS OF INDICTMENT The twelve count indictment charges Charles William Goff, Sr. and Charles William Goff, Jr., American Arms International, Inc., (AAI) and American Research and Development Company, Inc. (ARDCO). The Goffs' are charged in each of the twelve counts except Count [new page] III which names only Goff Jr. AAI is charged in only Counts I and VIII and ARDCO is named in Counts IV, V, VI, IX, X, XI and XII. Count I alleges a violation of the Bankruptcy Act, Title 18 U.S.C. section 152. It alleges that both Goffs and AAI concealed assets from the trustee and creditors. Counts II and III allege that Goff Sr. possessed unregistered machineguns and Goff Jr. possessed one such unregistered machinegun jointly with Sr. Count IV alleges that both Goffs and ARDCO obliterated or removed serial numbers from machinegun receivers, that is, firearms. Counts V, VIII and XI allege that both Goffs and ARDCO made false statements in certain records called acquisition and disposition records relating to the manufacture and destruction of machineguns. Counts VI and X allege that the Goffs and ARDCO made false entries in ATF Forms 2 relating to the manufacture of new machineguns. Count VII alleges that Goff Jr. made a false statement in violation of Title 18 U.S.C. section 1001 by sending a letter containing false statements. Counts IX and XII allege that both Goffs and ARDCO aided and abetted another in the unlawful making of machineguns by an unlicensed entity. Definitions of Firearm Under 18 U.S.C. section 921(a) (3), a firearm includes any weapon which will or is designed to expel a projectile by the action of -2- an explosive and the frame or receiver of any such weapon. Under section 921(a) (3), pistols, revolvers, rifles, shotguns and machineguns are all firearms. Accordingly, machineguns and machinegun receivers are firearms under 18 U.S.C. 921(a) (3). The definition of firearm in section 921(a) (3) applies for purposes of 18 U.S.C. sections 921-929. Title 27, Code of Federal Regulations Part 178 applies to firearms which are defined in section 921(a) (3). Under 26 U.S.C. section 5845(a) (6) and 26 U.S.C. section 5845(b), a machinegun is a firearm for purposes of 26 U.S.C. sections 5801-5872. Ordinary pistols, revolvers, shotguns and rifles are not firearms for purposes of 26 U.S.C. sections 5801-5872. Under 26 U.S.C. section 5845(b), a machinegun is defined as any weapon which shoots or is designed to shoot or can be readily restored to shoot, automatically more than one shot without manual reloading by a single function of the trigger. The term machinegun also includes the frame or receiver of any such weapon. Title 27, Code of Federal Regulations, part 179 applies to firearms which are defined in 26 U.S.C. section 5845. Section 922(m) Recordkeeping Requirements Before engaging in business as a manufacturer of any firearms - handguns, long guns, or machineguns - a person must receive a firearms license as a manufacturer . See: 18 U.S.C. section 923(a). Under 18 U.S.C. section 923(g) each licensed manufacturer of firearms must maintain such records of production, receipt, sale or other disposition of firearms as the Secretary prescribes by regulations. Under 18 U.S.C. section 921(a) (18), the term Secretary or -3- Secretary of the Treasury means the Secretary of the Treasury or his delegate. Under 18 U.S.C. section 922(m), it is unlawful for any licensed manufacturer knowingly to make any false entry in, to fail to make appropriate entry in or to fail to properly maintain any record which he is required to keep pursuant to section 923 or the regulations promulgated thereunder. Under Title 27, Code of Federal Regulations, Section 178.121(c), each licensed manufacturer must maintain such records of production, receipt, sale or other disposition as the regulations contained in part 178 provide, Under 27 C.F.R. section 178.123, each licensed manufacturer must record the type, model, caliber or gauge, and serial number of each complete firearm manufactured or otherwise acquired, and the date such manufacture or other acquisition was made. The information must be recorded not later than the seventh day following the date of manufacture. Each manufacturer is also required to keep a recrd of the disposition of firearms. Section 5861(l) Recordkeeping Requirements In order to engage in the business of manufacturing of machineguns, a person must hold a license as a manufacturer of firearms under 18 U.S.C. section923(a). Under 26 U.S.C. section 5801, and 27 C.F.R. section 179.31 every person who engages in the business of manufacturing machine guns must pay a special (occupational) tax of $500 a year for each place of business. Under 26 U.S.C. section 5802, every manufacturer must register with the Secretary in each internal revenue district where he conducts business. Under 26 U.S.C. section 5861(a), it is unlawful for any person to engage in business as a -4- manufacturer of machineguns without having paid the special (occupational) tax required by section 5801 for his business and having registered as required by section 5802. Under 27 C.F.R. section 179.34, a person before commencing business as a manufacturer of machineguns must prepare and file a return (IRS Form 11) and pay the proper tax. Under 26 U.S.C. section 7701(a) (11), the term "Secretary" when used in Title 26 means the Secretary of the Treasury or his delegate. Under 26 U.S.C. section 7701(a) (12), the term "or his delegate" means any officer, employee or agency of the Treasury Department duly authorized by the Secretary of the Treasury directly, or indirectly by one or more redelegations of authority, to perform the function mentioned or described in the context. Under 26 U.S.C. section 5843, manufacturers of machineguns must keep such records of and render such return in relation to the manufacture, making, receipt and sale or other disposition of machineguns as the Secretary may by regulations prescribe. Under 26 U.S.C. section 5861(l), it is unlawful to make or cause the making of a false entry on any application, return or record required by chapter 53 (26 U.S.C. sections 5801-5872) knowing such entry to be false. Under 27 C.F.R. section 179.68, a manufacturer qualified under part 179 to engage in business as a manufacturer may make the type of firearm which he is qualified to manufacture without payment of the $200 making tax but the manufacturer must report and register each firearm made in the manner prescribed by part 179. Under 27 -5- C.F.R. section 179.103, each manufacturer of machineguns qualified under part 179 must file with the Director of the Bureau of Alcohol, Tobacco and Firearms an accurate notice on Form 2, Notice of Firearms Manufactured or Imported, executed under penalties of perjury to show his manufacture of machineguns. Under section 179.103, the notice must set forth the name and address of the manufacturer, identify his special (occupational) tax stamp and federal firearms license, and show the date of manufacture, the type, model, length of barrel, overall length, caliber, gauge or size, serial numbers and other marks of identification of the firearms. All firearms manufactured shall be included on a Form 2, filed no later than the close of the next business day. Under section 179.103, the manufacturer must prepare Form 2 in duplicate, file the original notice and keep the copy with the records required by subpart I of part 179. Receipt of the Form 2 by the Director registers the machineguns listed on that Form 2. Subpart I, which consists of 27 C.F.R section 179.131, provides that each manufacturer of machineguns must keep and maintain the records regarding the manufacture, acquisition, receipt and disposition of machineguns as are prescribed and in the manner and place required by 27 C.F.R. Part 179. Each manufacturer must also maintain in chronological order at his place of business a separate record consisting of the documents required by part 179 showing the registration of any firearm to him. -6- Aiding and Abetting American Arms International and American Research and Development Company are corporations which have federal firearms license as manufacturers. Charles William Goff, Sr and Charles William Goff, Jr. do not themselves hold any federal firearms licenses. Only a federal firearms license holder can violate 18 U.S.C. section 922(m) as a principal. Only a qualified firearms manufacturer is required to file ATF Form 2. Only American Research and Development Company, a qualified firearms manufacturer, can violate 26 U.S.C. section 5861(l) as a principal by falsifying ATF Form 2. Accordingly, Charles William Goff, Sr. and Charles William Goff, Jr. are charged with aiding and abetting violations of 18 U.S.C. section 922(m) committed by American Arms International and American Research and Development Company and of aiding and abetting violations of 26 U.S.C. section 5861(l) committed by American Research and Development Company. American Research and Development Company and American Arms International are corporations which can only act through their agents, officers and employees. Charles William Goff, Sr. and Charles William Goff, Jr. are officers and agents of American Arms International and American Research and Development Company who aided and abetted the violations committed by the corporations. The principle that only a licensee can violate provisions of federal law directed at firearms license holders and the principle that corporations can only act through their officers and agents both apply in this case. -7- Making vs Manufacturing Charles William Goff, Sr. and Charles William Goff, Jr. and American Research and Development Company are charged with aiding and abetting Advance Manufacturing Technology's and Electronic Metal Products' illegal making of machineguns in violation of 26 U.S.C. section 5861(f). (Counts IX and XII) Charles William Goff, Sr. and Charles William Goff, Jr. are charged with aiding and abetting American Research and Development Company' s falsifying of ATF Forms 2 in violation of 26 U.S.C. section 5861(l) when American Research and Development Company claimed to have manufactured machineguns. Under 26 U.S.C. section 5845(i), the term make includes manufacturing (other than by one qualified to engage in the business of manufacturing), putting together or otherwise producing a firearm. A qualified manufacturer of machineguns must hold a firearms license as a manufacturer of firearms under 18 U.S.C. section 923 and must register under 26 U.S.C. section 5801 and pay a special (occupational) tax under 26 U.S.C. section 5802. A qualified manufacturer is not considered to be "making" a firearm under 26 U.S.C. section 5861(f). Under 27 C.F.R. section 179.103, a qualified manufacturer of machineguns must file ATF Form 2 when it manufactures machineguns but is not required to file an application and receive approval before manufacturing a machinegun. Anyone who is not a qualified manufacturer of machineguns is considered to be making a machinegun within the meaning of 26 U.S.C. section 5861(f) and must file an application and receive approval before making the machinegun. -8- 18 U.S.C. section 922(o) American Research and Development Company was not indicted for a violation of section 922(o). However the enactment of section 922(o) motivated American Research and Development Company and Charles William Goff, Sr. and Charles William Goff, Jr. to violate 26 U.S.C. 5861(l). Section 922(o) became effective on May 19, 1986. Under section 922(o), it is unlawful for any person to transfer or possess a machinegun unless the transfer is to or the possession is by any department or agency of the United States or a state or a department, agency or political subdivision of a state or unless it is any lawful transfer or possession of a machinegun that was lawfully possessed before the date this subsection took effect. Under 18 U.S.C. section 924(a)(1), the violation of section 922(o) must be willful. The effect of section 922(o) is to prohibit with limited exceptions, a qualified manufacturer of firearms or anyone from manufacturing a machinegun on or after May 19, 1986. Charles William Goff, Sr. and Charles William Goff, Jr. were aware of the enactment of section 922(o). This motivated Charles William Goff, Sr. and Charles William Goff, Jr. to falsify American Research and Development Company's ATF Forms 2 to show 2,000 machinegun receivers were manufactured before May 19, 1986 and to falsify American Research and Development Company's manufacturing records for firearms to show 2,000 machinegun receivers were manufactured before May 19, 1986. This also motivated American Research and Development Company, and Charles William Goff, Sr. and Charles William Goff, Jr. to dupe -9- Advance Manufacturing Technology and Electronic Metal Products into violating 26 U,S.C. section 5861(f) by making 2,000 machinegun receivers without applying for and receiving approval to make the machinegun receivers. DATED this 15th day of July, 1988. BRENT D. WARD United States Attorney By BRUCE C. LUBECK Assistant United States Attorney -10- CERTIFICATE OF SERVICE I HEREBY CERTIFY that I am an employee of the United States Attorney's Office for the District of Utah, and that a copy of the foregoing TRIAL BRIEF was mailed, postage prepaid to all parties named below, this 15 day of July, 1988. Max D. Wheeler Attorney for Defendants 10 Exchange Place, 1100 Salt Lake City, Utah 84110 -11-