Gun maker’s license revoked, owner banned from weapons industry

Mark Malkowski, President of Stag Arms, at his company in New Britain, Conn. On Tuesday, Dec. 22, 2015 the company, through its representative and president Mark Malkowski pleaded guility to to a felony charge of possession of a machine gun not registered to the company. As part of its guilty plea, Stag has agreed to pay a $500,000 fine. As part of his guilty plea,Malkowski has agreed to pay a fine of $100,000. Stag also has agreed not to challenge the license revocations in court, and to drop all ownership claims to the firearms seized by ATF. In addition, Malkowski will divest himself of his interest in Stag and to thereafter never again hold an ownership or management position with respect to a firearms business. less Mark Malkowski, President of Stag Arms, at his company in New Britain, Conn. On Tuesday, Dec. 22, 2015 the company, through its representative and president Mark Malkowski pleaded guility to to a felony charge ... more Photo: Charles Krupa / Associated Press Photo: Charles Krupa / Associated Press Image 1 of / 3 Caption Close Gun maker’s license revoked, owner banned from weapons industry 1 / 3 Back to Gallery

The third largest assault rifle manufacturer in the state pleaded guilty Tuesday to serious violations of federal firearms law that will force the sale of the company and ban its CEO and founder from the firearms business for life.

Mark Malkowski, 37, the president of Stag Arms LLC, of New Britain, who was once considered a golden boy of the gun-production world, entered a guilty plea on the company’s behalf in Hartford federal court to a felony charge of possessing an unregistered machine gun.

A Bureau of Alcohol, Tobacco, Firearms and Explosives investigation found 62 machine guns and receivers, the weapon’s main assembly, that were registered to another entity or not registered at all.

A 1986 law prohibits private machine gun ownership and requires rigorous registration and serial number stamping procedures on all fully-automatic weapons owned before law’s enactment.

“Stag’s possession of dozens of unregistered machine guns is particularly egregious,” said Deirdre Daly, U.S. Attorney for the District of Connecticut. “Federal firearms laws exist to ensure that all legal firearms are properly accounted for and don’t wind up on the street, and in the hands of those who shouldn’t possess them.”

Stag Arms’ license to manufacture firearms was revoked by the ATF on Nov. 16, with the effective date postponed for 60 days. The company, which has 100 employees, is negotiating with a private equity firm for a potential sale, prosecutors said.

The plea deal marked the precipitous downfall of a major Connecticut gun producer, number three in AR-15 rifle manufacturing in the state behind West Hartford-based Colt and Southport-based Sturm, Ruger, according to ATF data.

And it also marked the exit of a young up-and-coming gun entrepreneur who founded the company in 2003 “to manufacture reliable, 100 percent American made competitively priced mil-spec AR’s,” according to the company’s website.

Since then, the website said, “we have quickly become a market leader and one of the largest firearms manufacturers in the United States.”

Malkowski was active in promoting the gun-rights view in the wake of the 2012 Sandy Hook Elementary School mass shooting, shuttering his business for a day so Stag Arms employees could travel to Hartford in 2013 to lobby against Connecticut’s stiff gun-control law.

The gun manufacturers trade association, the Newtown-based National Shooting Sports Foundation (NSSF), honored Malkowski with its 2014 SHOT Business Person of the Year award.

Malkowski also gave $10,000 in two $5,000 payments to the NSSF PAC for the 2014 election cycle in which the PAC donated 94 percent of its contributions to Republicans.

Officials at NSSF did not return a request for comment.

Untraceable weapons

The federal investigation also discovered that, in violation of federal law, Stag had failed in thousands of instances to adequately document the manufacture and disposition of firearms, making them more susceptible to theft or loss. Investigators were able to reconcile. Inspectors were able to reconcile the whereabouts of all but about 300 of the firearms, and 200 are listed as lost or stolen.

“It is critically important for those who are responsible for manufacturing firearms, especially high-powered semiautomatic rifles, to diligently comply with federal firearms laws throughout the production and distribution process,” Daly said. “Stag’s misconduct has resulted in hundreds of these weapons being lost or untraceable.

As part of its guilty plea, Stag has agreed to pay a $500,000 fine. In addition, Malkowski will appear Wednesday in New Haven federal court and plead guilty to a misdemeanor charge of failure to maintain proper firearm records. Under the terms of a plea agreement, he is expected to be sentenced to a year’s probation. Malkowski also agreed to pay a fine of $100,000.

“When firearms licensees fail to comply with these federal regulations and laws they open the door for untraceable firearms to wind up on the street in the hands of traffickers and criminals,’’ATF Special Agent Daniel Kumor said.

Marketing consultant

Stag has agreed not to challenge the license revocations in court, and to drop all ownership claims to the firearms seized by ATF. In addition, Malkowski agreed to divest himself of his interest in Stag and never again hold an ownership or management position in the firearms business.

“While both Stag Arms and Mr. Malkowski believe that public safety was never compromised, they have agreed to enter guilty pleas and to pay significant fines, because doing so is in the best interests of the company and its employees,” the company said in a statement. “Mr. Malkowski has also agreed to transition the business to new ownership and is in advanced talks with a potential buyer. Mr. Malkowski will continue as a marketing consultant to the business and the industry for a period of time following the sale.“

News of the guilty pleas sent a small shockwave through the gun-manufacturing world and the cadre of advocacy groups and lawyers who have opposed them in court.

“It’s hard to know where it’s going to go but I worry that there are other bad-apple gun manufacturers in Connecticut and elsewhere around the nation,” said Po Murray, chairman of the Newtown Action Alliance.

Jonathan Lowy, director of the Brady Center to Prevent Gun Violence legal action project, applauded the prosecution, but called for a repeal of a 2005 federal law that immunized gun manufacturers against most liability lawsuits when their guns are used in crimes.

“As someone who represented a young man who was killed with a gun that left another gun manufacturer's plant without a serial number, I understand that lives are at stake when gun manufacturers fail to obey the law or use reasonable care,’’ Lowy said.

Staff writer Alex Gecan contributed to this report.

dan@hearstdc.com