Gun store owner had misgivings about ATF sting

Reporting from Glendale and Rio Rico, Ariz. —  In the fall of 2009, ATF agents installed a secret phone line and hidden cameras in a ceiling panel and wall at Andre Howard’s Lone Wolf gun store. They gave him one basic instruction: Sell guns to every illegal purchaser who walks through the door.

For 15 months, Howard did as he was told. To customers with phony IDs or wads of cash he normally would have turned away, he sold pistols, rifles and semiautomatics. He was assured by the ATF that they would follow the guns, and that the surveillance would lead the agents to the violent Mexican drug cartels on the Southwest border.

When Howard heard nothing about any arrests, he questioned the agents. Keep selling, they told him. So hundreds of thousands of dollars more in weapons, including .50-caliber sniper rifles, walked out of the front door of his store in a Glendale, Ariz., strip mall.

He was making a lot of money. But he also feared somebody was going to get hurt.

“Every passing week, I worried about something like that,” he said. “I felt horrible and sick.”

Late in the night on Dec. 14, in a canyon west of Rio Rico, Ariz., Border Patrol agents came across Mexican bandits preying on illegal immigrants.

According to a Border Patrol “Shooting Incident” report, the agents fired two rounds of bean bags from a shotgun. The Mexicans returned fire. One agent fired from his sidearm, another with his M-4 rifle.

One of the alleged bandits, Manuel Osorio-Arellanes, a 33-year-old Mexican from Sinaloa, was wounded in the abdomen and legs. Agent Brian Terry — 40, single, a former Marine — also went down. “I’m hit!” he cried.

A fellow agent cradled his friend. “I can’t feel my legs,” Terry said. “I think I’m paralyzed.” A bullet had pierced his aorta. Tall and nearly 240 pounds, Terry was too heavy to carry. They radioed for a helicopter. But Terry was bleeding badly, and he died in his colleague’s arms.

The bandits left Osorio-Arellanes behind and escaped across the desert, tossing away two AK-47 semiautomatics from Howard’s store.

Some 2,000 firearms from the Lone Wolf Trading Company store and others in southern Arizona were illegally sold under an ATF program called Fast and Furious that allowed “straw purchasers” to walk away with the weapons and turn them over to criminal traffickers. But the agency’s plan to trace the guns to the cartels never worked. As the case of the two Lone Wolf AK-47s tragically illustrates, the ATF, with a limited force of agents, did not keep track of them.

The Department of Justice in Washington said last week that one other Fast and Furious firearm turned up at a violent crime scene in this country. They have yet to provide any more details. They said another 28 Fast and Furious weapons were recovered at violent crimes in Mexico. They have not identified those cases either. The Mexican government maintains that an undisclosed number of Fast and Furious weapons have been found at some 170 crime scenes in their country.

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Howard said he does not own a gun, does not hunt, and does not belong to the National Rifle Assn. His love is helicopters — a former Army pilot, he gives flying lessons. He said he fell into the gun-dealing business 21 years ago only to help support his career as a flight instructor. Howard spoke to a reporter for the first time in depth about why he cooperated with the federal Bureau of Alcohol, Tobacco, Firearms and Explosives.

He said he supported law enforcement, and never imagined a thousand weapons, or half of the entire Fast and Furious inventory, would “walk” out of his store. And when arrests were not forthcoming, “every passing week I was more stunned,” he said.

According to a confidential memo written by assistant federal prosecutor Emory Hurley, “Mr. Howard had expressed concerns about the cooperation he was providing and whether he was endangering himself or implicating himself in a criminal investigation.”

Other firearms dealers shared his concerns. At the nearby Scottsdale Gun Club, the proprietor sent an email to Agent David Voth. “I want to help ATF,” he said, “but not at the risk of agents’ safety because I have some very close friends that are U.S. Border Patrol agents in southern AZ.”

Howard recalled that a chubby, bald and “very confident” man named Jaime Avila walked into the store on Jan. 16, 2010, and bought the AK-47s. Under the Fast and Furious protocol, agents were supposed to use the video cameras, surveillance, informants and law enforcement intelligence to follow the weapons and hope they led them to the drug cartels.

But no agents were watching on the hidden cameras or waiting outside to track the firearms when Avila showed up. Howard faxed a copy of the sale paperwork to the ATF “after the firearms were gone,” assuming they would catch up later. They never did.

Between November 2009 and June 2010, according to an ATF agent’s email to William Newell, then the special agent-in-charge in Phoenix, Avila walked away with 52 firearms after he “paid approximately $48,000 cash. The firearms consisted of FN 5.7 pistols, 1 Barrett 50 BMG rifle, AK-47 variant rifles, Ruger 9mm handguns, Colt 38 supers, etc.…”

Sometime in spring or early summer 2010 — the exact date is unknown — U.S. immigration officers reportedly stopped Avila at the Arizona border with the two semiautomatics and 30 other weapons. According to two sources close to a congressional investigation into Fast and Furious, the authorities checked with the ATF and were told to release him with the weapons because the ATF was still hoping to track the guns to cartel members.

In Washington, ATF officials declined to comment. In Congress, Rep. Darrell Issa (R-Vista), chairman of the House investigating committee, and Sen. Charles E. Grassley, the top Republican on the Senate Judiciary Committee, asked the Justice Department why Avila was not jailed and the guns seized. They have yet to receive an answer.

The two semi-automatics would turn up again, this time at the scene of the Terry shooting. According to sources, they were hidden in backpacks and stashed in the desert, ready for Mexican bandits.

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When weapons were recovered at the scene of the agent’s slaying, ATF officials in Phoenix scrambled. “All these ATF guys were showing up,” one law enforcement official recalled. “We were trying to catch suspects and rope up the crime scene, and all the ATF guys were saying they needed the serial numbers! They needed the serial numbers!”

Newell wanted an immediate trace on the semiautomatics, and that afternoon ATF agents showed up at the Lone Wolf store. Howard had heard of Terry’s death. “I was scared to death,” he said. They asked for his paperwork and matched the serial numbers. “Both of them were in shock, too,” he said. “You could tell they were sick.”

A little before 8 that night, the Phoenix ATF field office sent out an agency-wide bulletin: The suspect guns were Fast and Furious weapons. In Washington the next morning, then-ATF Acting Director Kenneth E. Melson prepared to notify the Border Patrol.

Avila was arrested, and initially held just for using a bad address on the purchase form. “This way,” Voth emailed the ATF field office, “we do not divulge our current case [Fast and Furious] or the Border Patrol shooting case.”

In a subsequent report for Fast and Furious classified “Law Enforcement Sensitive,” agents said Avila was buying for a Phoenix-based gun trafficking group that hid the weapons in vehicle compartments and drove them over the border from Arizona and Texas. The trafficking group used cash from drug sales to buy the weapons. The AK-47 was their weapon of choice, bought after cocaine and methamphetamines warehoused in Baja California were shipped north and sold in this country.

Other Avila weapons from Howard’s store wound up at a Glendale home and a Phoenix automotive business, both “firearm drop locations,” according to the ATF report. Still more were recovered in Sonora, Mexico, not far from Rio Rico.

In January, Avila and 19 others were charged in the straw purchasing. It was the one and only indictment to come out of 15 months of Fast and Furious. Asked at the press conference touting the charges whether the ATF allowed guns to “walk,” Newell, the ATF field supervisor, responded, “Hell no!”

His denial and the agent’s death provoked a small group of ATF whistle-blowers. They contacted Congress, and investigators asked the agency whether Terry was shot by Fast and Furious weapons.

The ATF replied that neither semiautomatic fired the fatal bullet. In truth, an FBI ballistics report could not determine whether one of the semiautomatics or a third weapon killed Terry.

Avila pleaded not guilty to the firearms charges, was released on bail and has yet to stand trial. Osorio-Arellanes was charged in the Terry slaying in May. No other suspects in the slaying have been arrested.

In Glendale, after two decades in business, Howard is thinking about closing his Lone Wolf gun store. He also has second thoughts about helping law enforcement.

“Was I betrayed?” he said. “Absolutely yes.”

richard.serrano@latimes.com