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Attorney General Lockyer Resolves Lawsuit Alleging Thousands Of Gun Law Violations By California Wal-Mart Stores

Wal-Mart to Pay $14.5 Million for Fines, Compliance and Public Education
Wednesday, January 5, 2005
Contact: (415) 703-5837

(SACRAMENTO) – Attorney General Bill Lockyer today announced that he has reached a settlement with Wal-Mart Stores, Inc. resolving a civil complaint alleging thousands violations of state gun laws over a three-year period from 2000-03. Under the terms of the $14.5 million agreement, Wal-Mart will pay $5 million in fines, submit to court-enforced compliance with all gun laws, and provide more than $4 million to fund state compliance checks, prevent the sale of ammunition to minors and educate the public on gun laws.

“ Wal-Mart’s failure to comply with gun safety laws put the lives of all Californians at risk by placing guns in the hands of criminals and other prohibited persons,” Lockyer said. “Although Wal-Mart has suspended gun sales in California, this settlement will ensure that it follows state law if it renews sales and will also provide valuable public education about the importance of gun safety. I will continue to vigorously regulate all gun dealers in California to ensure compliance with the law - the health and safety of all Californians depends on it.”

The agreement resolves a civil complaint filed yesterday by the Attorney General in Sacramento Superior Court, and concludes a thorough investigation by the state into the sale of long-guns (such as rifles and shotguns) at selected Wal-Mart stores in California. Lockyer’s lawsuit alleged that Wal-Mart engaged in unfair competition by committing thousands of violations at five separate stores. Among the laws Wal-Mart allegedly violated are:

Selling and delivering firearms to 23 individuals the Attorney General’s Office had informed the store were prohibited from possessing firearms,

Delivering firearms to 36 persons prohibited from possessing a firearm by means of a “straw purchase” to a relative or friend,

Delivering firearms to persons prior to the completion of a criminal background check,

Failing to verify the identity of purchasers through thumbprints and by scanning driver’s licenses, and

Failing to document that a firearm safety device, such as a trigger lock, was delivered with each firearm.
Lockyer’s lawsuit stems from a series of inspections, investigations and audits conducted between 1999 and 2004 that uncovered thousands of firearms law violations at numerous Wal-Mart stores. Routine inspections by Firearms Division agents of Wal-Mart stores in 1999 and 2000 revealed numerous technical violations of state gun laws. In response, a special training program was provided by the Attorney General to Wal-Mart officials to ensure knowledge and compliance with state laws.

In September 2001, state agents inspected the Wal-Mart store in Pleasanton and again discovered numerous violations - including allowing buyers to claim firearms before background checks were completed and failing to conduct background checks on employees allowed to sell guns. Special training on gun law compliance was provided to Bay Area Wal-Mart stores.

Subsequent Wal-Mart inspections in 2002 and 2003 revealed continued violations of law. As a result, the Firearms Division conducted an investigation of six Wal-Mart stores and identified hundreds of state gun law violations. The stores were located in Turlock, Merced, Los Banos, Madera and two in Sacramento. After notifying Wal-Mart of the findings, in April 2003 the company voluntarily agreed to shut down firearms sales at all of its 114 store locations that sold guns in California.

Later in 2003, the Firearms Division completed a comprehensive audit of five randomly selected Wal-Mart stores in Folsom, Turlock, Fresno, Ukiah and Simi Valley. The audit uncovered 2,891 violations that occurred between 2000 and 2003; these violations served as part of the basis of the Attorney General’s lawsuit.

Among the most serious of the violations discovered by the Attorney General were 23 confirmed cases where Wal-Mart released a firearm to a prohibited person and 36 “straw” purchases (where an individual purchases a gun on behalf of a prohibited person). Follow-up investigations by Firearms Division agents led to the successful recovery of 20 weapons sold to prohibited persons. With respect to the straw purchases, criminal charges have been filed against 20 different individuals and most of the firearms have either been recovered or confirmed to have been transferred to a non-prohibited person. Investigations regarding the outstanding prohibited person and straw-purchase cases remain ongoing.

Under the terms of the settlement, Wal-Mart is subject to court-enforced compliance ensuring that if it resumes selling firearms in California it will comply with all relevant laws. The agreement also provides $1.2 million to fund the Attorney General’s costs associated with monitoring Wal-Marts’ compliance with the law over the next five years. A total of $3 million will be used to develop and implement a system to validate the age of ammunition purchasers and to create a public service campaign regarding firearm safety, particularly for safe storage from children. Wal-Mart will also pay $5 million in civil penalties for its violations and the Attorney General will receive $800,000 to reimburse investigative costs. Further, Wal-Mart has already spent more than $2 million and will spend at least $2.5 million more over the next five years to ensure future compliance with California and federal laws regulating the sale of firearms.

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