Victory: Facing Lawsuit, ATF Issues Notice of License Revocation to Manufacturer Tied to Gun Trafficking

After Jimenez Arms Declared Bankruptcy Amid Lawsuits from Kansas City and Gun Violence Survivors Alleging it Repeatedly Broke Federal Firearms Law, Its Owner was Granted a New License for a Company Under New Name in April 2020

Decision is First-of-its-Kind Reversal by ATF of a Licensing Decision in Response to Litigation 

New York – In a first-of-its-kind victory for gun safety, amidst a lawsuit brought by Everytown for Gun Safety Support Fund, the State of Illinois and the City of Kansas City, MO, the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) issued a notice of license revocation to gun manufacturer J.A. Industries, the successor company of now-bankrupt Jimenez Arms, Inc. The lawsuit cited evidence that Jimenez Arms repeatedly broke federal firearms law, contributing to gun trafficking and criminal activity in Illinois and Kansas City, and that its owner misled the ATF in previous licensing applications. The lawsuit sought a court order reversing ATF’s initial decision to issue J.A. Industries a firearms license. During the case, ATF undertook a new inspection of J.A. Industries and last week issued a notice that it has determined that the license should be revoked, as reflected in a letter to the presiding federal judge filed today. J.A. Industries has 15 days to challenge the notice and request a hearing prior to revocation of its license.

“We can only hope this decision marks the beginning of a new era at ATF, one that is consistent with President Biden’s commitment to holding rogue and reckless members of the gun industry accountable for breaking the law and putting lives in danger,” said John Feinblatt, President of Everytown for Gun Safety. “After decades of serving as the gun industry’s lapdog, it’s time for ATF to do its job and be the American people’s watchdog.”

“Today’s notice of revocation is an important step towards shutting down a gun manufacturer who has flaunted federal gun laws and contributed to the wave of gun trafficking that fuels gun violence in cities across the country,” said Alla Lefkowitz, Senior Director of Affirmative Litigation at Everytown Law. “Mr. Jimenez should not have a firearms license, no matter what business name he decides to manufacture under. Lives will be saved as a result of this decision, and it should serve as a wake-up call for those in the industry who put profit over public safety.”

“I am proud today the ATF has taken bold action to stop the flow of illegal firearms into Kansas City,” said Kansas City, Missouri Mayor and Mayors Against Illegal Guns Co-Chair Quinton Lucas. “Jimenez Arms has caused significant harm to our community, leading to homicides, violent crime, and a number of shootings. Today’s decision is an important one for Kansas City, for the State of Missouri, and for our country. I appreciate the ATF working with America’s cities to ensure our communities can be safer as we continue to demand accountability from regulators and gun manufacturers alike. As we continue our work to save the lives of Kansas Citians—fathers, mothers, sons, daughters, grandparents, and sadly, children—efforts to identify and prosecute those who illegally obtain or provide guns to those should not have them, as defined by law, will remain a priority and part of the solution.”

“I appreciate the ATF’s decision to revoke JA Industries’ license, which should never have been approved in the first place. Partnerships that extend beyond Illinois’ borders are critical to our efforts to prevent guns from being trafficked into our state and used in carjackings and other violent crimes. To that end, I am grateful for the collaboration between Everytown for Gun Safety, the city of Kansas City and the Illinois Attorney General’s office,” Illinois Attorney General Kwame Raoul said. “Even though the guns manufactured by JA Industries cannot legally be sold in Illinois, interstate trafficking allows them to reach the hands of young offenders – who are attracted in part because the guns are so cheap – to be used in carjackings and other gun violence. The ATF’s decision is a step toward holding accountable manufacturers of guns that are designed for trafficking.”

The lawsuit, brought by Everytown Law (with pro bono representation by the law firm Cravath, Swaine & Moore) and the Illinois Attorney General’s Office, challenged ATF’s April 2020 decision to issue a federal firearms license to Jimenez Arms’ successor company just three months after Jimenez Arms declared bankruptcy amid lawsuits, including one brought by Kansas City, Missouri for Jimenez Arms’ alleged role in a trafficking ring. The complaint alleged that the ATF conducted a deficient investigation before deciding to grant the new license, a particularly dangerous example of what prior reporting has shown to be lax oversight by the agency. Notably, data from the five year period of 2016-2020 shows that the ATF denied only 0.1% of applications received. 

Among the allegations in the lawsuit:

• The president of JA Industries, Paul Jimenez, has been manufacturing guns in some form for nearly three decades, including as the owner and manager of Jimenez Arms. Every year for over a decade, Jimenez’s firearms manufacturing operation has churned out tens of thousands of low-quality, disposable handguns that are particularly attractive to traffickers. These pistols are deadly weapons that are priced to be disposable, routinely retailing for less than $150.
• Firearms originating from the operation in Nevada—which has at times been among the 15 largest pistol manufacturers in the country—have been used at and retrieved from crime scenes in American cities like Chicago and Kansas City, Missouri at a rate disproportionate to their market share.
  • Between 2014 and 2018, Chicago police recovered 378 Jimenez Arms pistols, and Kansas City, Missouri police recovered, seized or held as evidence 166 Jimenez Arms pistols.
• Jimenez Arms did business for years with Kansas City firearms trafficker James Samuels, who has since pled guilty to violating a host of federal gun laws. Among other violations of the firearms laws, this lawsuit and prior lawsuits allege that Jimenez Arms shipped guns directly to Samuels’ home, even though he knew or consciously avoided knowing that he was facilitating Samuels in skirting federal gun laws and regulations.
• During two routine inspections in 2012 and 2017, the ATF cited Jimenez Arms with serious recordkeeping violations that were consistent with Jimenez’s involvement in trafficking. But the ATF only held a warning conference “in lieu of revocation” and issued Jimenez a warning letter.
• In February 2020, in an apparent effort to avoid accountability for its illegal actions and dispel its debts, Jimenez Arms declared Chapter 7 bankruptcy amid multiple lawsuits. Paul Jimenez now calls the operation “JA Industries,” but the company continued to sell the same guns as before.
• The lawsuit alleged that due to false statements to the ATF and the unlawful shipment of guns to a gun trafficker, Jimenez was disqualified from holding an FFL. But rather than follow the law and put an end to Jimenez’s illicit and dangerous career in the firearms industry, the ATF approved JA Industries LLC’s request for an FFL.