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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 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 Hereafter, a person who is qualified to engage in any National Firearms Act business will be referred to as an FFL/SOT. Page 1 of 9
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Plaintiff, CR-10-1047-ROS v. RANDOLPH B. RODMAN, Defendant. MOTION TO DISMISS THE INDICTMENT FOR OUTRAGEOUS GOVERNMENT CONDUCT WITH POINTS AND AUTHORITIES IN SUPPORT THEREOF Evidentiary Hearing Requested

Defendant, Randolph B. Rodman, by and through Counsel, respectfully moves this Honorable Court for an Order dismissing the Indictment for outrageous governmental conduct which rises to the level of a due process violation. As grounds for this motion, Defendant avers as follows: FACTS Defendant Rodman has operated a Maryland business as a licensed manufacturer of firearms for about twenty (20) years. He has also paid a Special Occupational Taxpayer annually which qualifies him to manufacture and deal in National Firearms Act firearms, includingmachineguns1. In or about late 2003 or early 2004, defendant Rodman placed an order

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to buy three (3) M-1919 machineguns from defendant Clark, an FFL/SOT manufacturer in Arizona. In or about 1993, Defendant Clark implemented a business plan based on the premise that because the portion of a machinegun receiver bearing the markings required by law (Original Manufacturer, Model and Serial Number) is the machinegun itself, it is lawful for an FFL/SOT to build a machinegun around it. The resultant machinegun would retain serial number and the registered status of the registered machinegun receiver. At some time in 2000, Rodman learned that Clark was offering transferrable M-1919s for sale on the Internet. Prior to that time, defendant Rodman did not know defendant Clark and was unfamiliar with his reputation other than confirming that he was an licensed to engage in a manufacturing business in Arizona. Being unfamiliar with Clarks methods and having had no previous business dealings with Clark, Rodman remained cautious. Clark assured Rodman that his plan was ATF approved and that over many years, ATF had approved his applications to transfer modified machineguns. Rodman ordered a single machinegun as trial sample, to examine the quality of the product, the workmanship and to confirm that Clark could deliver machineguns that were legally transferrable. Rodman paid Clarks asking price in full and awaited delivery of his purchase. Rodman received machinegun Model-1919, S/N 820101086 along with a Form 3 approved by ATF on September 21, 2000. The Form 3 bore no indicia that the future transferrability of the machinegun was restricted. Further that registration certificate serves as proof positive: 1) that machinegun S/N 820101086 was lawfully manufactured and lawfully possessed prior to May 19, 1986; 2) that it was registered to him (Rodman) in the National Firearms Registration and Transfer Record (NFRTR)); and, 3) that it was transferrable. Rodman found that the workmanship, material and aesthetics of the gun were superior - the work of a master machinist.

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As far as defendant Rodman was concerned, the approved ATF Form 3 for machinegun S/N 820101086 was indisputable proof of the legality of Clarks manufacturing methods and the high quality of Clarks work. As a result, Rodman placed more orders with Clark for machineguns, M-1919s and Mag types. After the first purchase and prior to the order in 20032004, referenced above, Rodman bought and received a total of nine (9) machineguns from Clark, all having been modified in accordance with Clarks business plan. Every one came with an ATF approved registration certificate. After the 2003-2004 order, relations with Clark began to deteriorate when Clark did nothing to complete the ordersale or provide reasons for not doing so. For three (3) years Rodman did not receive the three machineguns which he had paid for. Neither did he received any explanation from Clark other than lulling tactics. In about mid-2007, Rodmans calls and emails to Clark became more frequent and more aggressive. Finally, on December 27, 2007, Clark filed three applications to transfer three machineguns to Rodman, S/Ns 820101541, 820101546 and 820101557. Clark informed Rodman that the transfer forms had been filed and the guns would be sent as soon as the approved forms were received. In or about October, 2006, ATF became suspicious that Clarks modifications of registered machineguns were not modifications but were, in fact, new manufactures. Since the transfer of machineguns manufactured after May 19, 1986 was restricted to governmental agencies and since Clark had transferred thirty-one (31) of his modified machineguns to individuals and FFL/SOTs, ATF referred Clark for criminal investigation. With the opening of the criminal investigation, ATF placed a freeze on all transfers to and from Clark, a routine investigative practice which prevents the accidental approval of machineguns to or from the subject of a criminal investigation. A freeze is accomplished by way of a notation in the NFRTR entry for the machinegun. Thus, when the data base is queried by the National Firearms Act Branch Examiner processing an application, the Examiner is alerted that the application can not be approved. At this time,

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October to November of 2006, machineguns S/N 820101541, 820101546 and 820101557 had been registered to Clark since March 2004 and were in his possession; the criminal investigation had been opened although Clark and Rodman were unaware of it; and the transfer of each of the three machineguns was frozen. It should have been impossible for Clark acquire any further machineguns of to transfer the machineguns to anyone but this too was not known to Clark Clark filed Forms 3 Applications to transfer the three machineguns to Rodman on December 27, 2007, almost four years after they were sold and more than a year after the ATF criminal investigation was opened. Despite the freeze, each of the applications to transfer were approved by ATF on February 20, 2008. The approved forms were then mailed to Clark who then shipped two of the guns, S/Ns 820101546 and 820101557 along with the ATF approved registration papers to Rodman. For reasons known only to Clark, S/N 820101541 was not shipped to Rodman as the law requires. It remained in Clarks possession and was seized during the search of Clarks business a few weeks later. The timing of the transfer of the guns to Rodman is significant in the context of the timing of other events. At precisely this time, ATF was making preparations to execute a search warrant on Clarks place of business. In fact, the search of Clarks business occurred in March, 2008, ending the secret stage of ATFs investigation. Further, the statutes of limitations for the earlier 922(o) receive and possess charges against Rodman were close to expiration. In fact, most had run by July, 2010, the date of indictment. The consequences of ATFs approval of Clarks applications to transfer these three machineguns were catastrophic. Each such approval constituted a violation of 26 U.S.C. 5812, which provides, ... Applications shall be denied if the transfer, receipt, or possession of the firearm would place the transferee in violation of law... The transfer, receipt and possession of machineguns S/N 820101546 and 820101557

25 place Rodman in violation of law. Both guns were in Rodmans inventory, at least for a short 26 while and they had been entered in his records. In the evening of May 1, 2008, ATF Special 27 28 Page 4 of 9

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Agents from Maryland visited Rodmans residence and announced that they were investigating Clark for the unlawful manufacture and transfer of machineguns and that since five of them were registered to him (Rodman), the should be in his possession. Rodman asked the Special Agents if he was in any trouble and they assured him that he was not the subject of their investigation and that they were there only to examine the machineguns to determine whether they had been unlawfully manufactured. Rodman agreed to be interviewed by the Maryland Special Agents and cooperated fully with them. Rodman informed the Special Agents that the machineguns were in a vault at his place of business and agreed to meet with them the next morning. On May 2, 2008, the Maryland Special Agents arrived at Rodmans business location and were shown the five machineguns. As a result, the Special Agents determined that the machineguns had been unlawfully manufactured and therefore, were needed as evidence in their investigation. While there, the agents reviewed Rodmans acquisition and disposition records and determined that the machineguns had been propertly entered. Rodman readily consented to abandon the five suspected machineguns and he was given a receipt for them. Each such approval was the sine qua non of every substantive crime with which defendant Rodman is charged in the indictment. Absent ATFs unlawful transfer approvals, he would never have received or possessed Clarks new machineguns and therefore could not be charged with any crimes involving them. Thus, the indictment of defendant Rodman is solely attributable to ATFs failure to deny any of Clarks applications and/or promptly refer the application forms for criminal investigation. In addition to the conspiracy charged in Count One of the Indictment, Rodman is charged with 17 other crimes: 9 substantive violations of the Gun Control Act, Title 18, and 8 substantive violations of the National Firearms Act, Title 26. Each of the substantive charges against Rodman arose from ATFs unlawful approval of the Clarks application to transfer machineguns S/N 820101541, 820101546 and 820101557. Clearly, the United States chose to prosecute defendants for violations of law where there is no law and has elected not to prosecute other individuals - i.e., government employees - for violations that are clear and unambiguous. The penalty section of the National Firearms Act, Page 5 of 9

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Section 5871, specifies, Any person who violates or fails to comply with any provision of this chapter shall, upon conviction, be fined not more than $10,000, or be imprisoned not more than ten (10) years, or both. Section 5812 cannot be violated by anyone other than ATF National Firearms Act Branch employees, a fact that Congress well knew given that only government employees are authorized to approve transfers of machineguns. Congress could have exempted government employees. It did not. The ATF act of approving three applications filed by Clark to transfer machineguns S/N 820101541, 820101546 and 820101557 can not be attributed to mistake, carelessness, negligence of poor judgment for two compelling reasons: 1) ATF had actual knowledge that for more than a year Clark had been the subject of a criminal investigation for the manufacture and transfer of machineguns in violation of 18 U.S.C. 922(o); 2) the act of approval required bypassing a freeze on the transfer of not one but three machineguns, a procedure designed to prevent just what happened; and, 3) the act of approval violated the statutory mandate of 26 U.S.C. 5812(a) which provides:. ... Applications shall be denied if the transfer, receipt, or possession of the firearm would place the transferee in violation of law... The approval of Clarks three applications was a deliberate act, the sole purpose of which was to create crimes and entrap Rodman. The method used to entrap Rodman was the manipulation of a regulatory governmental function. Rodman received and possessed S/Ns 820101546 and 820101557 without ATF approvals of Clarks applications on February 20, 2008. Prior to that, Rodmans only involvement with the three guns was that he bought them from Clark and paid for them about four years earlier and that he was the transferee on three applications filed by Clark on December 27, 2007. ARGUMENT The concept underpinning Clarks business plan (to acquire registered machineguns of one style, convert them to machineguns of a different style; sell them to qualified buyers; and then transfer them in compliance with 27 C.F.R. 479.84 which requires ATF approval) was objectively reasonable given that the registered machineguns that Clark was acquiring and Page 6 of 9

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modifying were not machineguns in the ordinary sense of the word. They were receivers; technically machineguns only because of the statutory definition, 26 U.S.C. 5845(b). Thus, Clarks acquired receivers were statutory machineguns and were registered. Such registered receivers have considerable value derived solely from the fact that they could be used to assemble a fully operable machinegun. There is no law or regulation which inhibits the style machinegun to assemble using a registered receiver. The arbitrary and capricious ATF theory in this case posits that a receiver can be assembled only into a machinegun that is identical to the one for which the receiver was designed. There is no rational basis for such a restriction. The ATF theory is questionable given that the revenue producing base of the National Firearms Act. The revenue scheme of the National Firearms Act is to define taxable property and levy a tax on the occurrence of a taxable event the transfer of a machinegun. The rate of tax has been determined by Congress and is not influenced by model designation, size, caliber, rate of fire, barrel length, overall length or any other feature. The taxable event is the transfer of a machinegun period. Every machinegun as small as a bottle cap or as large as an SUV is taxed at the same rate and upon the occurrence of the same event - the transfer. An indictment may be dismissed with prejudice under either of two theories. First, a district court may dismiss on the ground of outrageous conduct if the conduct amounts to a due process violation. Second, if the conduct does not rise to the level of a due process violation, the court may dismiss under its general supervisory powers. United States v. Samango, 607 F. 2d 877 (9th Cir. 1979). See also United States v. Chapman,524 F. 3d 1073 (9th Cir. 2008) (A court may dismiss an indictment under its supervisory powers only when the defendant suffers substantial prejudice and where no lesser remedial action is available). See also United Sates v. Wiley, 794 F. 2d 514 (9th Cir. 1986) (Criminal conduct may be dismissed when conduct is so outrageous that it violates due process; because conduct must shock the conscience, however, outrageous government conduct is not equated with negligence of poor judgment). Even if the ATF conduct did not rise to the level of shocking the conscience and violating due process, such reckless disregard for the liberty interests of Rodman by the governments law Page 7 of 9

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enforcement and prosecutive agencies should cause the Court to dismiss the indictment through its supervisory powers. CONCLUSION For the above reasons and for others which may be known to the Court, Defendant respectfully requests the Court to grant the motion dismissing the indictment. An evidentiary hearing is requested. Respectfully submitted

Dated this 14th day of September, 2012

/Robert E. Sanders Robert E. Sanders Counsel for Defendant Rodman pro hac vice 109 Candlewyck Drive Winston-Salem, NC 27104 tele. 336.659.2999 fax 336.765.9950 gunlaw@triad.rr.com

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CERTIFICATE OF SERVICE I HEREBY CERTIFY that on September 14, 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 Jo Lemke Gregory A. Bartolomei Loyd C. Tate Joseph R. Conte Michael J. Smith William Foreman Frederick R. Petti kathy.lemke@usdoj.gov gregory_martolomei@fd.org Itate@bylawyers.com dcgunlaw@gmail.com gonzalezandsmith@aol.com william.forman@azbar.org fpetti@pettibriones.com /s/ Robert E. Sanders Robert E. Sanders Counsel for Randolph Rodman 109 Candlewood Drive Winston-Salem, NC 27104 Phone: 336.659.2999 Fax: 336.765.9950 E-mail: gunlaw@triad.rr.com