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Robert E. Sanders 109 Candlewyck Drive Winston-Salem, NC 27104 phone: 336.659.2999 fax: 336.765.9950 email: gunlaw@triad.rr.com Counsel for Randolph B. Rodman Pro hac vice
C:\Users\RES\Documents\1 CLIENTS\RODMAN\US v RODMAN\ECF DOCUMENTS\MOTION USGJ TRANSCRIPTS FINAL 011012.wpd

UNITED STATES DISTRICT COURT for the DISTRICT OF ARIZONA

UNITED STATES OF AMERICA 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MOTION OF DEFENDANTS RODMAN, GOLDSTEIN, KALISH AND GREENBERG FOR TRANSCRIPTS OF GRAND JURY PROCEEDINGS WITH POINTS AND AUTHORITIES IN SUPPORT THEREOF Defendants Randolph B. Rodman, Hal Paul Goldstein, Lorren Marc Kalish and Idan C. Greenberg, by and through Counsel, respectfully move the Court for its Order authorizing disclosure of the minutes of the proceedings of the grand jury or juries returning the indictment in this case. As grounds for this motion, Counsel have a good faith belief that grand jurors were provided with erroneous and ambiguous guidance regarding the law of the case. Failure to provide accurate interpretations of the law eliminated the grand jurys ability to return a true and fair indictment. Errors are found in the text of Count One and are set forth in more detail below. The transcripts will enable a review for context and the ability to assess the cumulative effect of the error.
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Plaintiff, CR-10-1047-ROS v. RANDOLPH B. RODMAN, HAL PAUL GOLDSTEIN, Defendants. MOTION OF DEFENDANTS RODMAN, GOLDSTEIN, KALISH AND GREENBERG FOR TRANSCRIPTS OF GRAND JURY PROCEEDINGS WITH POINTS AND AUTHORITIES IN SUPPORT THEREOF

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Prior to indictment, this case was investigated as a conspiracy to violate Section 922(o) of Title 18. As part of the investigation and before an indictment, every machinegun identified in the indictment was submitted to the Firearms Technology Branch (FTB), the official Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) laboratory in West Virginia. There, the machineguns were examined and tested for the sole purpose of determining whether modifications made to 34 machineguns by Defendant Clark constituted new manufactures. No opinion as to the date of manufacture of any of the machineguns was rendered by any of the FTB experts who examined and tested the machineguns. The presence of substantive 922(o) counts in the indictment means that the grand jury found probable cause without a single expert opinion. Currently, a year and a half after indictment, there is good reason to believe that Count One will be prosecuted as a conspiracy to violate 922(o) of Title 18. Count One is the keystone of this 106 count prosecution. Without conviction on Count One, very few of the remaining substantive counts survive. Access to the transcripts will permit timely and thoroughly briefed objections to the Conspiracy and substantive 922(o) counts. Dismissal of an indictment is appropriate where violations of grand jury procedures substantially influenced the grand jurys decision to indict, or raised a grave doubt as to whether it had such an effect. The Supreme Courts position is well settled that disclosure of grand jury minutes is a technical breach of grand jury secrecy infra., and that a showing of compelling necessity is required for lifting the indispensable secrecy of grand jury proceedings. United States v. Proctor & Gamble, 356 U.S. 677, 682 (1958). Compelling necessity must be demonstrated by a showing of particularized need rather than a general one, to wit, 1) the desired material will avoid a possible injustice; 2) the need for disclosure is greater than the need for continued secrecy; and 3) that only the relevant parts of transcripts should be disclosed. Douglas Oil Co. v. Petrol Stops Northwest, 441 U.S. 211, 223 (1979). However, failure to timely challenge a charging document is fatal and is tantamount to a waiver of the Grand right of all people not to be charged with serious crime by the Crown or by political hacks in the Executive Branch.

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Particularized need may be met by a showing of a failure to instruct a grand jury of the correct law to apply. The prosecution has enough advantages in grand jury settings without the inherent injustice of permitting the use of bad law to obtain an indictment. The statements of law expressed in paragraphs 10 and 11 (Indictment, p. 4) are intended to introduce the conspiracy count of the indictment. They are two examples of probable government instructions to the grand jury as to the law to be applied to making1 machineguns by private individuals. The facts in this case dictate that the law that should have been provided to the Grand Jury was the polar opposite to the instructions given. The applicable law is that a licensed manufacturer and Special Occupational Taxpayer, such as Defendant Clark, acts under the authority of the United States and is therefore authorized to manufacture2 machineguns in any amount and in any model, design, and configuration. Inapposite legal guidance is plain error in and of itself. The purpose of this motion is to permit defendants to amplify the consequences flowing from erroneous legal guidance by the government and to detect other material errors in law which had the effect of substantially influencing the grand jurys decision to indict. In the alternative, Defendants submit that errors about the law of the case would have raised a grave doubt impacting the decision to indict. See, United States v. DeRosa, 783 F.2nd 1401, 1404 (9th Cir.), Although grand jury may be guided by a prosecutor, the prosecutor may not usurp the independence of a grand jury. See also, United States v. Samango, 607 F.2nd 877, 881 (9th Cir. 1979), United States v. Benjamin, 852 F.2nd 413 (9th Cir. 1988) (Court reviewed errors in testimony of government witnesses by themselves and cumulatively. Testimony from live witness laden with conclusions concerning the guilt of several defendants and summarizing
1

The term make simply can not be applied to manufacture by a licensed and qualified NFA Manufacturer. See, 26 U.S.C. 5845(I); 27 C.F.R. 479.11, The term make and the various derivatives of such word, shall include manufacturing (other than by one qualified to engage in such business under this chapter), putting together, altering, any combination of these, or otherwise producing a firearm. Emphasis added. The term manufacturer is not defined other than, Any person who is engaged in the business of manufacturing firearms. See, 26 U.S.C. 5845(m); 27 C.F.R. 479.11.
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ATF investigations, and concluded that the cumulative effect of that error and indiscretions, none of which alone might have been enough to tip scales, operated to Defendants prejudice by producing a biased grand jury.) INTRODUCTION - COUNT ONE A quote from Judge Kozinskis opinion in United States v. Caldwell, 989 F.2nd 1056, 1061 (9th Cir. 1993) aptly describes the prosecution of this case. There are places where, ... everything not permitted was forbidden and whatever was permitted was mandatory. Citizens were shackled in their actions by the universal passion for banning things (cite to speech by Russian President Yeltsin in BBC omitted). Fortunately, the United States is not such a place and we plan to keep it that way. If the government wants to forbid certain conduct, it may forbid it. If it wants to mandate it, it may mandate it. But we wont lightly infer that in enacting 18 U.S.C. 371 Congress meant to forbid all things that obstruct the government or require citizens to do all those things that could make the governments job easier. So long as they dont act dishonestly or deceitfully and so long as they dont violate some specific law, people living in our society are still free to conduct affairs any which way they please. This case involves a prosecution under the National Firearms Act (NFA), 26 U.S.C. 5801 et seq., To be sure, the NFA is codified under the tax code but this is not a tax prosecution; as such the prosecution of Count One under the defraud clause of 18 U.S.C. 371 is a matter of first impression for any U.S. Court. Count One alleges the existence of the most vague and ambiguous conspiracy imaginable based not on proof of the commission of any crime or violation of a United States statute. Although the indictment charges 105 substantive violations of United States statutes3, the conspiracy defraud clause charge does not require allegation and

Including Counts 2 to 6; Mail Fraud, 18 U.S.C. 1341; Counts 7 to 58; Wire Fraud, 18 U.S.C. 1343; Counts 59 to 60; Money Laundering, 18 U.S.C. 1956; Counts 61 to 63; Possession of a Firearm with an Obliterated Serial Number, 18 U.S.C. 922(k), 924(a) and Aiding and Abetting, Counts 64 to 66; Obliteration, Alteration, Removal of a Serial Number, 26 U.S.C. 5842, 5861, 5871, and Aiding and Abetting, 18 U.S.C. 2; Counts 67 to 74; Illegal Possession of a Machinegun, 18 U.S.C. 922(o) and Aiding and Abetting, 18
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proof of any violation of law. Under the theory charged, the government is not required to produce what it did not have when the indictment was issued; i.e., an expert opinion that modifications to a registered machinegun constitutes a new manufacture. All that is necessary for conviction on a conspiracy to defraud is proof that the defendants agreed to commit an act of fraud4 in its broadest sense and that the fraud interfered with the ability of the United States to carry out its function and rights (sic. ) to regulate machineguns. This type of charge is premised on a common law amalgam of cases labeled collectively as a Klein Conspiracy. See United States v. Klein, 247 F 2d 908, 915 (2nd Cir. 1957) describing a default clause charge as a conspiracy to defraud the United States by impeding, impairing, obstructing, and defeating the lawful functions of the Internal Revenue Service of the Department of the Treasury in the ascertainment, computation, assessment, and collection of the revenue, to wit, income taxes. In this case, the defraud charge alleges the defendants agreed together ... to defraud the United States of and concerning its government functions and rights (sic.), that is: the regulation of machineguns ... The potential for abuse under the defraud clause is greater than under the offense clause because, 1) under the defraud clause, the charge is broader and less precise; 2) the defraud clause expands the scope of conspiracy and, thus, liability for crimes, co-conspirators and admissibility of co-conspirators declarations; 3) the defraud clause includes more overt acts and, thus, both lengthens the period of the statute of limitations and increases the number of

U.S.C. 2; Counts 75 to 81; 26 U.S.C. 5812, 5861, and 5871, and Aiding and Abetting, U.S.C. 2; Counts 82 to 89; Receipt or Possession of an Unregistered Firearm, 26 U.S.S. 5841, 5861, 5871, and Aiding and Abetting, 18 U.S.C. 2; Count 90; Receipt of Possession of an Unregistered Firearm, 26 U.S.C. 5841, 5861, 5871; Counts 91 to 95; Transfer of Firearms in Violation of NFA, 26 U.S.C. 5812, 5861, 5871, and Aiding and Abetting, 18 U.S.C. 2; Counts 96 to 98, Making a Firearm in Violation of the NFA, 26 U.S.C. 5822, 5861, 5871, and Aiding and Abetting, 18 U.S.C. 2; Counts 99 to 104; 26 U.S.C. 5848, 5861, 5871, and Aiding and Abetting, 18 U.S.C. 2; Count 105 and 107, Tampering, 18 U.S.C. 1512; Count 106, Falsify Material Fact, 18 U.S.C. 1001; Forfeiture Count, 18 U.S.C. 924(D), 28 U.S.C. 2461, 26 U.S.C. 5872.
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In Klein conspiracies, fraud is construed in the broadest sense. Page 5 of 18

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jurisdictions where venue can be laid; and, 4) charges under the defraud clause may avoid the limit placed on the penalty for conspiracy to commit a misdemeanor. United States v . Rosenblatt, 554 F.2d 36, 41 n.6 (2nd Cir. 1977). See also, Hammerschmidt v. United States, 265 U.S. 182, 188 (1924). (the defraud clause of Section 371 is very broad and encompasses a vast array of conduct, including acts that do not constitute a crime under a separate federal statute. See also, United States v. Tuohey, 867 F. 2d 534, 536-537 (9th Cir. 1989) (This is because the term defraud when used in Section 371 is broader than its common law definition). But see, , Caldwell supra. at 1059 & n. 3 (9th Cir 1993). (Court unwilling to conclude Congress meant to make it a federal crime to do anything, even that which is otherwise permitted, with the goal of making the governments job more difficult. ... a conspiracy to make the IRSs job harder just isnt illegal. In United States v. Minarik, 875 F 2nd 1186, 1187 (6th Cir. 1989), the Court opined that in order to properly inform defendants of the charges against them, prosecutors must use the offense clause rather than the defraud clause when the conduct is overlapping, such as here, where it constitutes both an alleged conspiracy to violate a specific statute and an alleged conspiracy to defraud the United States. Other circuits have rejected the Minarik holding in allowing the government to charge the defraud clause regardless of whether the fraud constitutes a conspiracy to violate a specific statute. The Ninth Circuit has not rejected Minarik. In Caldwell, ibid. at 1060, the Ninth Circuit found jury instructions on a default clause charge were deficient because jurors were not told that they had to find that defendants agreed to defraud the United States by deceitful or dishonest means and that defendant could not be required to provide the source of cash on a currency transaction report when the regulations did not require such information. Under the defraud clause, the government does not have to establish a pecuniary loss to the United States. So said the Supreme Court in Hammerschmidt, ibid. at 188. but research has not seen any Ninth Circuit opinion to support that principle. The crime of conspiracy contains an intent element requiring the government to establish that each member of the conspiracy had knowledge of the object of the conspiracy and joined the
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conspiracy intending to achieve that objective. Ingram v. United States, 360 U.S. 672, 678 (1959); See, United States v. Hayes, 190 F. 3rd 939, 946 (9th Cir. 1999), affd. en banc 231 F. 3rd 663, 667 n.1 (9th Cir. 2000) (government may rely on circumstantial evidence to establish this element). THE ATF ORGANIZATIONAL COMPONENTS INVOLVED NATIONAL FIREARMS BRANCH (NFA BRANCH) The NFA Branch is located in Martinsburg, West Virginia and maintains the National

7 Firearms Registration an Transfer Record (NFRTR), a central registry including the make and 8 model, serial number, caliber, barrel length and overall length of every machinegun in the US 9 that is not in possession of the U.S. Government itself. The registry also includes the 10 identification and address of the person entitled to possess the machinegun. 11 FIREARMS TECHNOLOGY BRANCH (FTB) 12 The Firearms Technology Branch is located in West Virginia and its function is to 13 provide expert technical support to ATF, other Federal agencies, State and local law enforcement 14 departments, the firearms industry, Congress and the general public. FTB renders opinions and 15 determinations regarding the classification of suspected illegal firearms and newly designed 16 firearms. FTB maintains an extensive firearms reference collection as well as technical firearms 17 reference files and libray and firearms databases. FTB is also responsible for determinations on 18 the importation of all firearms. FTB also provides the U.S. Department of Justice, State 19 prosecutors offices, district attorneys offices, and military courts with expert firearms 20 testimony. Testimony includes the identification of the date, place of manufacture and other 21 matters relating to firearms industry. 22 THE LAW 23 This motion for transcripts of the grand jury proceedings in CR-10-1047-ROS is filed to 24 make it possible to assess the impact of erroneous legal guidance upon a grand jury See, United 25 26 laden with conclusions concerning the guilt of several defendants and summarizing ATF 27 28
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States v. Samango, 607 F.2d 877, 881 (9th Cir. 1979) (regarding testimony from live witnesses

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investigations, the Court concluded the cumulative effect of errors and indiscretions, none of which might have been enough to tip the scales, operated to defendants prejudice by producing a biased grand jury id. at 844.); See also, United States v. DeRosa, 783 F.2d 1401, 1404 (9th Cir. 1988) (Although grand jury may be guided by a prosecutor, the prosecutor may not usurp the independence of the grand jury, See also, United States v. Benjamin, 852 F.2d 413 (9th Cir. 1988); See also, United States v. Roberts,, 481 F.Supp. 1385, 1390 (CDCal. 1988) (Grand Jury is a Shield for every person against overzealous, albeit honest and perhaps well intentioned prosecutors and must be vigorously protected by the courts. It is not, and can never be, permitted to be a sword. The Supreme Court appears to be trending in the direction of the Ninth Circuit. In a concurring opinion on the issue of dismissal of the indictment for improprieties before a grand jury, See, United States v. Mechanik, 475 U.S. 66, 73 (1986) (issuing a narrow decision against dismissal analyzing the question under the harmless error standard of FRCrP 52); See also, Bank of Nova Scotia v. United States, 487 U.S. 250 (1988) (dismissal of indictment appropriate if timely objection raised establishing that violations substantially influenced the grand jurys decision to indict, or raised a grave doubt as to whether it had such an effect.); See also, Midland Asphalt v. United States, 489 U.S. 794 (1989). A careful analysis of discovery material establishes that the governments theory of prosecution has been evolving over the past five plus years since the investigation was commenced. There are numerous examples of erroneous statements of law on points that are material to the facts in this case spread among the massive discovery material. The standard for dismissal of an indictment for prosecutorial misconduct is difficult to meet, and there is no legal right to access information about the conduct of grand jury proceedings. Of course, it approaches the impossible for any defendant to meet the stiff standards without the help of the grand jury transcripts he seeks. Further, disclosure pursuant to Jencks Act occurs after trial has begun and is piecemeal and incomplete and risks needless waste of judicial time. At all times between on or about September 22, 1993, through April 8, 2009, Defendant George Clark was licensed by ATF to engage in the business of manufacturing firearms. At all
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times during the same period, Defendant Clark paid an annual Special Occupational Tax to manufacture NFA firearms, including machineguns of all makes, models, configurations and designs, 26 U.S.C. 5845(b). Thus, his status as licensee and Special Occupational Taxpayer authorized him to manufacture and register machineguns after May 19, 1986. Paragraph 10, introduces the conspiracy count with an instruction for the grand jury to apply an erroneous and highly prejudicial statement of law which does not fit the facts: 10. Machineguns manufactured after May 19, 1986 can only be transferred or possessed by or under the authority of the United States or any department or agency thereof or a State, or a department, agency, or political subdivision thereof. The simple fact is that the person alleged (see paragraphs 18 through 51 OVERT ACTS) to be the manufacturer of all thirty-four (34) new machineguns after May 19, 1986 is Defendant George Clark. He is now and was at all times a manufacturer, licensed by ATF and qualified by payment of a Special Occupational Tax to the Internal Revenue Service to manufacture machineguns. The following is a correct instruction of law to be applied in this case: 10. At all times during the alleged conspiracy, an individual who is licensed and qualified as an NFA manufacturer, is authorized to manufacture, register, and possess machineguns in any quantity of any make, model, design, or configuration without prior ATF approval. There can be no greater difference between the what is version and the what should

18 be version of law. In the former, the act of manufacturing a new machinegun is prohibited as is 19 the act of transferring a new machinegun to a private individual. In the latter, the act of 20 manfacturing a new machinegun is authorized and he act of transferring a firearm to certain 21 transferees is authorized. The difference has to do with the licensed and NFA qualified status of 22 the actor. The first instruction is to be applied when the actor is not licensed and is therefore a 23 private individual. That is inconsistent with our facts. 24 The intent of 922(o) is not to impede the manufacture of machineguns but to prohibit 25 the transfer of newly manufacturers to private individuals. Thus, the transfer of machineguns 26 manufactured after May 19, 1986 by qualified licensees may only be perfected if an application is 27 28
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approved by ATF and will only be approved if the transfer were to the United States or under the authority of the United States, to State agencies, for export to certain foreign governments or foreign end users, and to other NFA qualified licensed manufacturers to be used as sales samples and for demonstration purposes. Manufacture of new machineguns is therefore not only not prohibited, it does not even require prior approval by ATF. Transfers of new machineguns is accomplished by notice to ATF after the fact of manufacture. Paragraph 11, also introducing the conspiracy charge, is another example of bad law: 11. A private individual may only transfer and possess machineguns manufactured on or before May 19, 1986 and that are registered in the NFRTR. The use of the term private individual to classify the actor (the transferor or possessor)

10 is totally misleading in that it introduces an element not present in this case. Of the six persons 11 accused of charges involving transfer and/or possession, five are licensed and NFA qualified. 12 The alleged manufacturer and transferor of the machineguns identified in the indictment is 13 Defendant Clark. At all times during the existence of the conspiracy, Defendant Clark was not a 14 private individual. He was licensed and was a Special Occupational Taxpayer. The intent of 15 this erroneous legal guidance has no other purpose but to mislead grand jurors in the law to be 16 applied. This is more egregious in the Overt Acts in Furtherance of the Conspiracy Section of 17 the Indictment, paragraphs 18 through 51. 18 Each of the thirty-four (34) Paragraphs numbered 18 through 51 identifies a specific 19 machinegun and contains a separate sentence explaining that during the period of time that each 20 machinegun was registered to Defendant George Clark, he manufactured a different style 21 machinegun using a serial number removed from a MAC style machinegun that was registered to 22 him. Defendant Clark did not manufacture a different style machinegun, he modified a 23 machinegun that was registered to him. Paragraph 11, as written in the indictment is a baseless 24 legal conclusion, not supported by statute, regulation, case law, or any expert opinion in any 25 official ATF reports of tests and examinations. Thus, each of the thirty-four (34) paragraphs 26 expressly declares a violation of 922(o), thirty-four in all without any legal basis. When 27 28
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introduced by the erroneous legal instruction in paragraph 11, the determination of a prohibited manufacture of a machinegun in each paragraph is inescapable. On the other hand if a correct instruction of law were applied, the same paragraphs would merely describe routine and lawful business activity. It does not matter that the erroneous interpretations of law provided to the Grand Jury may have been due to miscomprehension of the privileges and obligations accruing to the status of licensee and Special Occupational Tax payments. The prosecutor had an obligation to know that prior to seeking an indictment. Facially, 18 U.S.C. 922(o) provides: (o)(1) it shall be unlawful to transfer or possess a machinegun. (0)(2) This subsection does not apply with respect to (A) a transfer to or by, or possession by or under the authority of the United States ... (Emphasis added) (B) any lawful transfer or lawful possession of a machinegun that was lawfully possessed before the date this subsection takes effect. (May 19, 1986) In a nutshell, the simple fact is that 18 U.S.C. 922(o) does not prohibit the manufacture of

16 machineguns by licensed and NFA qualified business entities, such as Clark and four of the 17 others charged as co-conspirators. Licensed and qualified manufacturers can manufacture 18 machineguns in any quantity of any make, model, design, or configuration without prior ATF 19 approval. Similarly, 922(o) does not effect the registration of machineguns manufactured after 20 May 19, 1986 by licensed and NFA qualified manufacturers and the number of machineguns to 21 be registered has no limits. Registration is accomplished by notice to ATF after the fact of 22 manufacture on. Regulations compel a manufacturer to identify the machinegun (27 C.F.R. 23 479.102 and give notice by way of an ATF Form 2 (Notice of Firearms Manufactured) which 24 must be mailed by close of business the day following manufacture. Thus, 922(o) merely 25 restricts the transfer of post May 19, 1986 machineguns to U.S. and State agencies, certain 26 exports to foreign governments and to other NFA qualified licensed manufacturers for use as 27 28
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sales samples and for demonstration purposes. All transfers require prior ATF approval and exports also require an approved license from the U.S. Department of State, Directorate of Defense Trade Controls (DDTC). THE ATF CRIMINAL INVESTIGATION The origin of the criminal investigation was unusual. In contrast to the opening of most investigations, it was ATF employees of the NFA Branch and the FTB lab (government employees not authorized to conduct criminal investigations) who first became suspicious of the existence of a possible violations of law. After the performance of several investigatory tasks5, the matter was referred first to the Washington DC (Falls Church) Criminal Division and later to the Phoenix ATF Criminal Division for criminal investigation. The matter was referred to the Phoenix Special Agent in Charge by way of a memorandum dated November 16, 2006 from an ATF Deputy Assistant Director at ATF Headquarters (The Office of Enforcement Programs and Services) 6. Prior thereto, faceless and nameless ATF employees of the NFA Branch and the Firearms Technology Branch had already interviewed ATF employees about the matter, had numerous contacts with the person in possession of SN A6042075, a suspected contraband machinegun; they had conducted an alleged laboratory test of the suspect gun; and had also returned the gun to the registrant after determining it was contraband and was illegal to possess. All this took place before the formal referral for criminal investigation on November 16, 2006. The referral memo of the Deputy Assistant Director included the following points
5

The significance of this is that such conduct violates ATF internal procedures. When persons unfamiliar with criminal procedures conduct interviews or handle property in a criminal matter there is risk that evidence will contaminated. ATF employees other than Special Agents, are not authorized, trained or otherwise qualified to conduct criminal interviews of suspects, seize property, receive abandoned property, collect and preserve evidence, or submit property for a determination of its potential evidentiary value, etc. This position, despite its title, is a regulatory function that oversees the programs and Services that support the main functions of ATF, including such service providers as the NFA Branch and the FTB Branch supra., and others.
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supporting the need for a criminal investigation in Phoenix: 1. 2. George Clark, a Special Occupational Taxpayer in Arizona since 1993, converted MAC Models 10 and 11 machineguns into Browning Model 1919 machineguns; Applications 7 to transfer the converted guns from Clark to various parties were found to have constant make and model designations but the caliber, barrel and overall lengths were at variance with descriptions in the National Firearms Registration and Transfer Record (NFRTR); One of the suspected machineguns, SN A6042075, caliber 9mm/45 cal., barrel lengths 5.57 inches and overall length 11 inches was then registered to a Virginia FFL, John Brown, DBA Battlefield Sports and that Mr. Brown transported this machinegun to the FTB lab in West Virginia for examination; Significantly, the memo failed to disclose that prior to being in possession of SN A6042075, Brown had bought and sold at least two other M1919 machineguns and was a party in eight (8) applications to transfer models 1919 that had been converted from MAC models by Clark. It was also learned in review of discovery material that Brown was an ATF Confidential Informant; The examination and testing of SN A6042075 was alleged to have been performed on October 31, 2006 by Richard Vasquez, the Deputy Chief of FTB; and Vasquez concluded that the MAC Model 10 machinegun had been destroyed in the conversion process and that the Model 1919 was a new manufacture which triggered a requirement for Clark to file a Form 2 (notice of manufacture of a new machinegun). Since the Model 1919 was not registered, it was a contraband unregistered machinegun.

4 5 6 7 8 4. 9 10 11 5. 12 13 6. 14 15 16 3.

There are major problems with statements in the referral memo: 17 1. 18 19 20 21 22 23 2. 24 25 26 27 28 At the time, 11/16/06, Ms. Stucko reported that 22 such suspect applications to transfer had been identified from a search of the NFRTR. The actual number charged in the indictment is 34 as others were discovered through investigation.
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The memo cites neither to a statute, a regulation, a ruling nor any case law for the principle that the conversion of an NFA registered machinegun to another model constitutes the manufacture of a new machinegun and therefore requires a new registration. The conversion process described in the memo is a zero sum game. The MAC Model 10 machinegun that was converted was one machinegun lawfully registered and possessed before the conversion. Following the conversion, it was the same one machinegun albeit in a different configuration but nevertheless still one machinegun. The NFA is a tax statute and assesses tax on machineguns, per se, not models. The tax assessed and collected on every make, model, design, configuration of machinegun is set at the same uniform rate $200.00 to register and $200.00 to transfer; The Report of an Official Examination and Testing of SN A6042075 on October 31, 2006 is a canard, a complete, from whole cloth fabrication. Like a unicorn,

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because it is impossible to find, it does not exist. The ATF FTB Laboratory has no record of receiving SN A6042075 for testing and examination on or about October 31, 2006. There is no report of such an examination in the FTB official system of records. The non-existence of A6042075's receipt in the FTB evidence log on October 31 and the non-existence of an FTB lab report was concealed from defendants throughout the discovery period. It was discovered only after Counsels specific requests for disclosure of the report were ignored for over a year. Finally, in October, 2011, Defendants received definitive proof that FTB has no record of receipt of that machinegun on or about that date. That fact was made known in response to a request for collateral items, i.e., for the pages of FTBs evidence logs for October 31, 2006 and for any other entries in the FTBs system of records. An agency capable of persisting in such deceit, patently false statements in a criminal investigation by top level ATF Headquarters Executives, is capable of much worse.8 THE ATF TECHNICAL EXAMINATIONS AND LAB REPORTS

9 Every machinegun in the indictment (approximately 80) was sent to the FTB lab for 10 testing. Each was found to be a machinegun. However, they had been submitted to the lab for a 11 determination whether they were manufactured after May 19, 1986. Such a finding is the ultimate 12 proof at issue for a violation of 922(o). The state of the governments scientific evidence at the 13 time of indictment was that it did not possess a single expert opinion about any machinegun 14 submitted to FTB for testing (approximately 400) as to the date of manufacture, the place of 15 manufacture and the identity of the manufacturer. 16 After the Court ordered deadline for completion of discovery had passed, on October 13, 17 2011, the government disclosed an undated report labeled Supplemental Report of FTB 200818 514-KEM/FTB 2009-114-KEM. (Supplemental Report). This report was prepared by Richard 19 20 21 22 23 24 25 26 27 28 For more than a year, Defendants have requested confirmation of the existence of an internal investigation of ATF employees and regulated persons involved in this case and/or disclosure of the report of that investigation.(the ATF Office of Internal Affairs or Office of Professional Responsibility) Unlike a unicorn, the report of such an investigation does exist and it can be found. The timing, authenticity and certification of this Report has not yet been challenged nor has the government provided any reasoning or authority for shifting lab reports. This is a Mr. Vasquezs third modification of the official reports of another firearms expert. (One of the supplemented reports had been amended in February of 2011). Further, the report is not dated
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Vasquez, the governments designated Firearms Expert Witness and purports9 to supplement the

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2008 and 2009 official lab reports of Firearms Technician Kenneth E. Mason. It is also worthy of note that the timing of the receipt of the Supplemental Report was shortly after an August 8, 2011 hearing on Defendants Motion to Enlarge Time for Discovery. Although the Supplemental Report is undated, it can be assumed that it was prepared on or about the time it was disclosed, more than a year after indictment; five years from the start of the ATF criminal investigation and shortly after the August 8 hearing. The basic objective of the Supplemental Report is to provide the expert opinion lacking in all other lab reports that all machineguns in the indictment (paragraphs 18 through 51, Overt Acts paragraphs, and the Forfeiture Count) were manufactured after 1986. The Supplemental Report arrives at that opinion by use of a error-laced simplistic 4 step syllogism: 1. 2. 3. 4. 922(o) prohibits the manufacture of a machinegun after 1986.10; Caliber conversions11 are lawful; The machineguns in the indictment are not caliber conversions; Thus, since they are not caliber conversions, they are therefore a modification which constitutes a new manufacturer.

Prime examples of erroneous interpretations of law can be found in the governments 17 representations to the Court during the hearing of August 8. Such examples are after the case 18 had been investigated since 2006 and a year and a half after the indictment. Coming at such a 19 20 21 22 23 24 25 26 27 28 and bears no indicia that it is an official record of the ATF Firearms Technology Branch. The earlier official versions of the two reports contain no opinion that the conversions constituted a new manufacture. Actually, 922(o) authorizes the manufacture of machineguns after 1986. At the same time, it prohibits their transfer to any person except to the United States or under the authority of the United States, to State agencies and to licensed and qualified NFA businesses with certain restrictions. There is a difference between that which is authorized and that which is prohibited. The term caliber conversion is a word of art. It has no meaning whatsoever other than the meaning of the author. The term does not appear in the statute, regulation, in any reported opinion.
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10

11

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time, these statements support an inference that government attorneys and witnesses polluted the grand jury process by the entry of erroneous statements of law. Taken at best, these remarks represent a profound misunderstanding of the rights and privileges, duties and obligations of a person in the status of a licensed manufacturer of firearms and a Special Occupational Taxpayer. At the hearing, the Court questioned the government on comparisons or contrasts between modifications, alterations, re-configurations, and/or changes to registered machineguns and manufacturing of new machineguns. AUSA Lemke: ... these are not conversions. These are manufacturings (sic.) That are occurring, new manufacturing that is occurring. (Transcript, p. 18, lines 19-24) Theres a difference between manufacturing and conversion. Is that right? Not to put too fine a spin on it, but that would be correct. ... youre saying that everything that is manufactured is illegal? Everything that is manufactured is illegal .... (TR; p.19; lines 58)

The Court: AUSA Lemke:

12 The Court: 13 AUSA Lemke: 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

It is unreasonable to assume that the grand jury was not provided with similar opinions about the meaning of conversions and manufacturing. The processes followed by Defendant Clark are described in 34 separate paragraphs as overt acts. (Overt Acts Section of the indictment, paragraphs 18 through 51). Each such Overt Act declares that the process constituted a new manufacture of a machinegun. The grand jury made such statements in the absence of any testimony supported by any firearms expert. Absent opinion testimony by a firearms expert, the government could not have cited to the statute or implementing regulations. The statute and the regulations are barren of any language that can be interpreted to mean that conversions of a registered machinegun constitutes new manufacture. CONCLUSION For the reasons above and for others which may be known to the Court, Defendants move the Court for its Order granting release of the minutes of the grand jury proceedings. This request is limited to those portions of the transcripts containing legal opinions and interpretations
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of law by government attorneys and witnesses. Should this motion not be granted, Defendants request the Court to review the minutes in camera and further request the Court to take whatever action is deemed appropriate. Defendants request a hearing. DATED: January 10, 2012 Respectfully submitted,

/s/ Robert E. Sanders Counsel pro hac vice for Randolph B. Rodman /s/ Joseph R. Conte Counsel pro hac vice for Hal Paul Goldstein /s/ William P. Foreman Counsel for Lorren Marc Kalish /s/ Loyd C. Tate Counsel for Idan C. Greenberg

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1 2 3 4 5 Kathy Jo Lemke 6 Gregory A. Bartolomei 7 Joseph R. Conte 8 William Foreman 9 Michael J. Smith 10 Frederick R. Petti 11 Loyd C. Tate 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
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CERTIFICATE OF SERVICE I HEREBY CERTIFY that on the 10th day of January 2012, I electronically transmitted the attached document to the Clerks Office using the ECF system for filing and transmittal of a Notice of Electronic Filing to the following ECF registrants: kathy.lemke@usdoj.gov gregory_bartolomei@fd.org dcgunlaw@gmail.com william.foreman@azbar.org gonzalezandsmith@aol.com fpetti@pettibriones.com ltate@bylawyers.com

/s/ Robert E. Sanders Robert E. Sanders Counsel pro hac vice for Randolph Rodman 109 Candlewyck Drive Winston-Salem, NC 27104 Phone: 336.659.2999 Fax: 336.765.9950 E-mail: gunlaw@triad.rr.com