The Bureau of Alcohol, Tobacco, Firearms and Explosives is revoking the federal firearms license of JA Industries, a Nevada-based gunmaker that declared bankruptcy and rebranded itself more than once in an attempt to sidestep lawsuits and investigations over its alleged unscrupulous business practices.
The development was revealed in a March 30 letter by the U.S. Attorney’s Office for the Southern District of New York, which is presiding over a lawsuit that seeks to strip the gunmaker of its license. The suit, filed in January 2021 by Illinois and Kansas City, Missouri, followed an investigation by The Trace and the Daily Beast that showed that the company, originally known as Jimenez Arms, had been repackaged to avoid lawsuits and regulatory scrutiny. The ruling is a win for gun reform groups, which have been employing novel strategies to penetrate the gun industry’s special legal immunity to most lawsuits.
Jimenez Arms initiated bankruptcy proceedings in February 2020 just as it came under increasing scrutiny for its ties to an interstate trafficking ring. The filing was widely seen as an effort by owner Paul Jimenez to sidestep lawsuits stemming from revelations that his company had supplied pistols to a Kansas City, Missouri, firefighter who later pleaded guilty to trafficking guns, at least one of which was used in a murder. Within two months, Jimenez had set up shop under a new banner, JA Industries, which was within walking distance of Jimenez Arms’ former headquarters. Still, the ATF issued it a federal firearms license.
In August 2020, The Trace’s Brian Freskos revealed that JA Industries was at least the twelfth gunmaking business operated by members and close associates of the same extended family since 1970. Several of those companies closed as they or their executives faced criminal accusations, federal investigation, or lawsuits alleging the handguns their factories produced were prone to spontaneously discharge, explode, or be used in a crime.
In a court filing in fall 2021, the Southern District revealed that the ATF had agreed to initiate an inspection of JA Industries, which was set to take two months. The results of that inspection have not been released, but appear to have led to the ATF’s ruling. The agency did not respond to a request for comment.
“I appreciate the ATF’s decision to revoke JA Industries’ license, which should never have been approved in the first place,” Illinois Attorney General Kwame Raoul said in a statement. “The ATF’s decision is a step toward holding accountable manufacturers of guns that are designed for trafficking.”
The gun reform group Brady has been trying to shut down bad apple gun dealers for years. Everytown Law, the legal branch of the advocacy group Everytown for Gun Safety — which joined Illinois and Kansas City in the suit — is currently joining several other cities in suing the ATF to compel the agency to regulate ghost guns. (Everytown for Gun Safety’s nonpolitical arm provides funding to The Trace; here is a list of The Trace’s major donors and its policy on editorial independence.)
Alla Lefkowitz, the senior director of affirmative litigation for Everytown Law, said following the ATF’s ruling, “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.”
According to the March 30 filing, the plaintiffs have requested a copy of the revocation notice “in anticipation of dismissing the case.”
