The U.S. Attorney’s Office for the Eastern District of Virginia-Alexandria Office announced on March 14, 2014 that a federal grand jury returned a superseding indictment charging Lee Hall, 52, of northern Virginia, and Mark Landersman, 53, of California with conspiracy to illegally manufacture firearms, transport unregistered firearms in interstate commerce and commit mail fraud.  Lee Hall also is charged with theft of government money.

Hall faces a maximum penalty of 15 years in prison if convicted of both charges.  Landersman faces a maximum penalty of five years if convicted.

According to the indictment, as Intelligence Director of the Office of Plans, Policy, Oversight and Integration for the Deputy Undersecretary of the Navy, Lee Hall initiated a sole source contract between a Navy prime contractor and Mark Landersman’s company, Advanced Machining and Engineering (AME), for the manufacture of 349 silencers at a cost of approximately $1.6 million.

The indictment further alleges that neither Landersman nor AME was licensed to manufacture or sell firearms or silencers.  Moreover, although AME was to receive about $1.6 million for the silencers, Landersman subcontracted the actual production of the silencers for a cost of approximately $10,000.  Landersman had the silencers manufactured without serial numbers and shipped them to Maryland in February 2013.

The sole source contract called for Landersman to receive a deposit of approximately $800,000 before starting production, with the balance to be paid shortly after the silencers were shipped from California to Maryland.  In April 2013, Landersman received the remaining balance of approximately $800,000 under the subcontract.  An inspection report submitted before payment of the remaining balance stated that the silencers had been inspected and that they conformed to the contract.  No inspection of the silencers, however, was actually done prior to paying the $800,000 balance.

The alleged overt acts of the conspiracy reference a website Hall shared with Landersman on how to manufacture silencers.  The first line of the website apparently stated: “Warning: You must have a BATFE Form 1 with tax stamp before you start to legally build a suppressor.  National Firearms Act (NFA) rules apply and you can do hard prison time for violating the law.”  But in the contract documents between Hall and the government contracting company Hall certified that Landersman’s company, AME, was engaged in the fabrication of articles for experimental and scientific purposes and therefore was not required to register with the Directorate of Defense Trade Controls, U.S. Department of State.  Although the prosecutors will likely couch the foregoing as evidence of Hall’s intent to deceive the contracting company, it may actually demonstrate Hall’s genuine misunderstanding of the law or its applicability to his situation.  Such a misunderstanding of the circumstances may be a valid defense for a specific intent crime such as conspiracy.

This post is authored by Ferrari & Associates, P.C., a law firm specializing in federal criminal defense matters. Feel free to contact us at (202) 280-6370 or info@ferrariassociatespc.com.