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Monday, September 26, 2016

Utah Business Owner Convicted of Dealing in Firearms without a License and Filing False Tax Returns



Convicted of Illegally Selling Firearms and Underreporting More than $10 Million in Gross Receipts

SALT LAKE CITY – A Salt Lake County, Utah, man was convicted Friday by a federal jury of one count of dealing in firearms without a license and five counts of filing false tax returns, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney John W. Huber for the District of Utah.

“Individuals such as Mr. Webber, who view themselves above the law and engage in criminal conduct to line their own pockets with funds that belong to the U.S. Treasury, will be held to account for their crimes and face severe consequences, including prosecution and incarceration,” said Principal Deputy Assistant Attorney General Ciraolo.  “The Tax Division thanks its colleagues in the District of Utah and other federal agencies for their continued efforts to ensure that everyone pays their fair share.”

“This defendant repeatedly purchased firearms for resale without a federal firearms license and substantially under reported the gross receipts of the sales on his taxes,” said U.S. Attorney Huber.  “Around 2,000 firearms were involved in this conduct. Evidence at trial showed that Mr. Webber claimed a mere fraction of his gross receipts on his tax forms over a four-year period.”

Pursuant to an agreement reached with the United States in 2007, Adam Michael Webber, was barred from applying for a federal firearms license or engaging in the business of dealing firearms.  According to the evidence presented at trial, between 2007 and 2008, Webber was the sole owner of HK Parts, an Internet gun parts business that operated originally as a sole proprietorship and later as an S corporation. In 2008, Webber added firearms to his product line and primarily sold them on the Internet at hkparts.net (link is external).  He also sold firearms and firearm parts out of the basement of his residence.  Webber never held a federal firearms license and, from 2009 through May 2012, illegally sold firearms under the auspices of a company owned by another Utah resident.  Webber also sold firearms to undercover Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) agents on two separate occasions, including selling one firearm for cash in a parking lot.  In May 2012, approximately $180,000 in cash, a 70-pound silver bar, silver coins and firearms were found at Webber’s residence during the execution of a search warrant.

From 2007 through 2010, Webber earned more than $10 million in gross receipts from his illegal firearms business.  For those years, he reported only a total of $183,397 in gross receipts, underreporting his earnings on his 2007, 2008 and 2009 individual income tax returns and underreporting gross receipts on his 2009 and 2010 corporate tax returns.  In 2010, Webber paid $670,000 in cash for a new home in Salt Lake County.

Sentencing is set for Dec. 1.  Webber faces a statutory maximum sentence of up to five years in prison for dealing in firearms without a license and up to three years in prison for each count of filing a false tax return, as well as a period of supervised release and monetary penalties.

“The laws regulating the buying and selling of firearms exist to prevent criminals and other prohibited people from illegally accessing firearms,” said Ken Croke, Special Agent in Charge of the ATF’s Denver Field Office.  “By circumventing these laws, Webber knowingly and intentionally put people’s lives at risk.

“Mr. Webber's crimes were not victimless,” said Special Agent in Charge Tara Sullivan of the Internal Revenue Service-Criminal Investigation (IRS-CI) Field Office in Las Vegas, Nevada.   “Reporting inaccurate information on your taxes cheats the government and is unfair to honest taxpayers.  Mr. Webber decided that he was above the law and IRS CI holds all offenders accountable.”

“Illegal firearms dealers can create public safety and national security vulnerabilities by potentially arming criminals and terrorists without a traceable paper trail, while also hurting the image and business reputation of licensed law-abiding firearms dealers,” said Special Agent in Charge David A. Thompson of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations’ (HSI) Denver office.  “Frequently, such successful criminal cases are identified, investigated and presented for prosecution by combining the law enforcement resources and authorities of multiple agencies.  Our HSI special agents routinely work cooperatively with other law enforcement partners to shut down these criminal operations that pose a public safety risk to our communities.”

Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Huber commended the special agents of ATF, IRS-CI and HSI, who conducted the investigation and Assistant U.S. Attorneys Cy H. Castle and J. Drew Yeates and Paralegal Heather Nielson of the U.S. Attorney’s Office in the District of Utah and Trial Attorney Kathleen M. Barry of the Tax Division, who prosecuted the case.

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