Feds say neo-Nazi with guns was tracking community leaders

NBC News/February 22, 2013

Because Congress has prohibited a national computerized database of gun sales, tracking the sale of firearms is a cumbersome process forcing investigators to rely on research methods from decades past. And if the sale occurred through a private seller – which is how 80 percent of those convicted of gun crimes get their weapons -- no documentation is required. NBC's Michael Isikoff reports.

FBI agents recently warned community leaders in the Detroit area about a possible racist plot by a convicted felon and alleged neo-Nazi sympathizer who was arrested after he was discovered with an arsenal of assault rifles and other weapons, a law enforcement official tells NBC News.

"The FBI averted a catastrophe in this case, there's no doubt about it," Steven M. Dettelbach, the U.S. attorney in Cleveland, said in an interview.

New details about the case of Richard Schmidt, the owner of a sporting goods store in Bowling Green, Ohio, dramatically highlight what law enforcement officials say are major loopholes in the nation's gun laws. Schmidt, 47, is a convicted felon who spent 13 years in Ohio state prison for a homicide after being convicted of killing a man and wounding two others in a shooting during a traffic stop, according to state prison records. Under federal law, Schmidt, who was released on parole in 2003, is barred from possessing any firearms.

Yet when FBI agents last December searched his home and store, they discovered a cache of 18 weapons that included AR-15 assault rifles, 9 mm Ruger and Sig Sauer pistols, shotguns, high-capacity magazines and more than 40,000 rounds of ammunition. Schmidt was originally reported to have been arrested on charges of trafficking in counterfeit goods, but was indicted last month on four federal charges —including possessing illegal weapons, body armor and ammunition. He has pleaded not guilty to the charges.

"As a matter of policy, I don't comment on pending cases," his lawyer, Andy Hart, a federal public defender in Toledo, said when reached by telephone.

Dettelbach, who is overseeing the case, said that federal agents have been unable to determine how and where Schmidt obtained his weapons, prompting officials to conclude he likely acquired them at gun shows or through private sales -- where under federal law no background checks are required. .

"It's scary," he said about Schmidt's arsenal of weapons. "It's not... that I won't say" where Schmidt got his guns. "It's that sitting here today as a senior federal law enforcement official in northern Ohio, I can't say."

The investigation into Schmidt was conducted by a FBI Joint terrorism Task Force whose agents said they discovered he was tracking African American and Jewish leaders in the Detroit area. When agents conducted their search, they said they found evidence suggesting Schmidt harbored neo-Nazi sympathies, including a video of the 2005 national meeting of the National Socialist Movement — in which speakers wore black swastika arm bands and gave the Nazi "Sieg Heil" salute. "This is a war! This is a battle for our survival!" one speaker shouts on a video of the meeting obtained by NBC News. Other seized items, according to federal search warrants, included a list of national Jewish-owned businesses and paraphernalia from the "Waffen SS," Adolph Hitler's military force in Germany.

'Very unsettling, very disturbing'

Two community leaders briefed on the case tell NBC News that agents also found a notebook in which Schmidt had listed the names, addresses and other personal information of Detroit area community leaders. Although Schmidt was already in custody, and remains in jail pending trial, the evidence in the notebook prompted agents to warn the leaders about what they had found.

Rev. Wendell Anthony, president of the Detroit NAACP, said that FBI agents showed him a page of one of Schmidt's notebooks which included information about members of Anthony's family as well as distances between his home, office and his church. They also told him they were concerned about "a possible threat against the NAACP and me in particular," he said.

"It was mind blowing," Anthony said. "Very unsettling, very disturbing, and it really kind of made me angry." When he was told about Schmidt's weapons, Anthony said, "I made the comment that this guy is a one man army and they said, ‘Yes, looks like it.'"

The FBI gave a similar briefing to Scott Kaufman, the executive director of the Jewish Federation of Metropolitan Detroit. He said agents also showed him a page of Schmidt's notebook showing his name and the names of others in leadership positions in his organization, as well as the names of tenants in his building and driving directions to his office.

"When I saw my name on a piece of paper along with information about our organization and our building written by an alleged neo-Nazi, it was certainly unnerving," he said.

Anthony and Kaufman said the FBI asked them not to share copies of the notebook pages with NBC News because Schmidt's case is ongoing. They also said agents had no specific evidence of what Schmidt might have been planning – or whether he was working with anybody else. An FBI spokeswoman declined comment.

Federal law does not require such checks for private sales or gun show purchases. Seventeen states have mandated them for handgun purchases at gun shows, though Ohio is not among them. Only six states require background checks for all firearms purchases.

A new study by the Johns Hopkins Center for Gun Policy and Research has found that 80 percent of those convicted of gun crimes acquire their weapons through private sales – making it virtually impossible for federal agents to trace where they come from or who is providing them.

"There's no documentation required for private transactions. So whatever occurs in that zone is invisible to us," Charles Houser, the director of the Bureau of Alcohol, Tobacco and Firearms National Tracing Center in Martinsburg, W.Va., said in an interview.

Dettelbach echoed those concerns. "Our current set of laws for how guns get out the community has a lot of holes," he said. "It's almost like Swiss cheese."

(Federal prosecutors recently filed court papers showing that reputed Boston mob figure James "Whitey" Bulger was able to buy at least 15 handguns and a shotgun while he was on the run as one of the FBI's "Most Wanted" fugitives. Officials believe he acquired them at gun shows or from private sellers.

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