Stag Arms, the Connecticut-based AR-15 manufacturer, has lost it’s federal firearms license as a result of not properly keeping track of serialized lower receivers.
New Britain-based Stag Firearms LLC pleaded guilty Tuesday to violating federal firearms laws and as part of a plea agreement company president and owner Mark Malkowski agreed to sell the company and have no further ownership or management role in a gun manufacturer.
The company, with Malkowski serving as its representative, pleaded guilty in U.S. District Court in Hartford to a single felony count of possession of a machine gun not registered to the company.
The Bureau of Alcohol, Tobacco and Firearms is also revoking Stag’s federal license to manufacture firearms.
Malkowski is also scheduled to plead guilty Wednesday in U.S. District Court in New Haven to a misdemeanor count of failure to maintain firearms records.
The federal government began its investigation of Stag in July 2014, after a routine Bureau of Alcohol, Tobacco and Firearms inspection turned up a variety of recording keeping violations, missing firearms and unregistered firearms, the government said.
The guilty plea, Stag said in a prepared statement, was in the best interest of the company and its approximately 100 employees. Malkowski is in advanced talks with a New York private equity firm to sell the company, Stag and the government said.
“For the first time in Connecticut, and there have only been a few of these prosecutions throughout the nation, a large manufacturer is pleading guilty to a felony charge relating to record keeping violations,” Connecticut U.S. Attorney Deirdre M. Daly said Tuesday. The company will pay a fine of $500,000 as part of the plea agreement.
For his guilty plea, Malkowski, 37, will pay a $100,000 fine and will not be permitted to own, operate or manage a firearms company.
As we noted earlier this year, Stag Arms was raided for stupidity, not criminal enterprise. They did not properly serialize and track lower receivers at the time of their creation as required by law, and are receiving a harsh penalty as a result.
It is unclear at this time what will become of the company or it’s employees as a result of the plea deal.
Update: A statement from Stag Arms.
“Stag Arms, LLC today announced that the company and its founder, Mark Malkowski, have reached a resolution with government officials stemming from an investigation that began last year relating primarily to the timing of recordkeeping during the manufacturing process and compliance with federal firearms manufacturing and registration requirements. Both Stag Arms and Mr. Malkowski cooperated fully with the government throughout the investigation. 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. 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. Stag Arms takes its obligations to comply with all laws and regulations very seriously and has made comprehensive changes to ensure that similar problems cannot happen again and that best compliance practices are maintained in all of its operations.”