Antique Firearms Expert Indicted

[Steven Mace]

Antique Firearms Expert Indicted

July 11, 2006
Staff and Wire Reports

Robert L. Wilson, a world-renowned antique gun expert and former longtime resident of Hadlyme now serving a prison sentence for fraud, was indicted Monday on separate charges related to an alleged swindle in Louisville, Ky.

Wilson, a widely published authority on Colt, Winchester and other historic firearms, helped an Alabama couple defraud a Louisville museum founder out of nearly $2 million by inflating the values of some antique firearms, according to the federal indictment.

Prosecutors estimated that Michael Salisbury and his wife, Karen, turned a profit of at least $1.75 million from 1997 to 2002 by giving false appraisals of weapons to collector Owsley Brown Frazier.

Wilson, known as "R.L. Wilson," helped the Salisburys prepare appraisal certifications in November 2000 for several antique firearms that Salisbury bought on behalf of Frazier, according to the indictment. The grand jury charged Wilson with conspiracy to commit fraud and making false statements on federal tax returns.

The indictment said Wilson, of San Francisco, made the false statements on his tax returns in 2000 and 2001. He moved to California from the Hadlyme section of Lyme around 2001, when he filed for bankruptcy protection.

Frazier was collecting antique firearms for the Frazier Historical Arms Museum in downtown Louisville, which he funded with his own money. Court documents said Frazier, former vice chairman of the Brown-Forman Corp., owner of Jack Daniel's and other liquor brands, sometimes paid twice the value of the original purchase price, federal prosecutors said.

Wilson, 67, faces a maximum of five years in prison and a $250,000 fine. He is scheduled to be arraigned in Louisville on Aug. 21. He is currently serving a one-year sentence for fraud in Lompoc, Calif., in an unrelated gun swindling case in Connecticut.

In that case, federal prosecutors said Wilson arranged a deal for a buyer to acquire an antique Colt pistol in exchange for cash and other antique firearms. Prosecutors said Wilson kept $195,000 that was supposed to go to the seller and disposed of the other antique guns to pay off a creditor. He pleaded guilty to wire fraud and was sentenced last December.

The Salisburys were indicted in federal court in January on charges of conspiracy to commit fraud, federal tax evasion and money laundering.

Wilson was involved in a controversy in Hartford in the 1970s and 1980s Wilson involving the Colt firearms collection at the Museum of Connecticut History, in which 324 pieces were illegally traded out of the museum in exchange for a dozen firearms or paired sets. No one was charged with a crime in that case, which was investigated after the time limit for prosecution had expired.

Monday's indictment of Wilson "comes as no surprise to anyone that knows him," said Dean Nelson, the current administrator of the state museum, who has gathered evidence in an effort to show that Wilson's trades plundered the collection.

Nelson said he turned over his records to the FBI in Kentucky in 2004.

Frazier's 100,000-square-foot museum in downtown Louisville houses several ancient artifacts and a collection from the Royal Armouries, Britain's national repository for arms and armor.

http://www.courant.com/news/local/hc-ctwilson0711.artjul11,0,4607236.story?coll=hc-headlines-local

Steve Mace

[RampantScot]

Wow, Sad people truly try to rip people off....

[wayne in boca]

You know,a guy like that has only one thing to sell-his crediblity.What will he do now?

[Steven Mace]

Saturday, December 1, 2007

Trial to examine gun purchases for museum

Three accused of defrauding Frazier

By Andrew Wolfson
awolfson@courier-journal.com
The Courier-Journal

Antique gun dealer Michael Salisbury once said that he loved millionaire collector and philanthropist Owsley Brown Frazier like a parent.

On Monday, in a trial that could last two weeks or more, a federal court jury will be asked to consider whether Salisbury, along with his wife, Karen Cruse Salisbury, and R.L. Wilson, a once internationally renowned expert on 19th-century arms, defrauded Frazier and should be imprisoned for it.

The three are charged with conspiring to bilk Frazier and his Frazier International History Museum out of about $1.75 million by overcharging the retired Brown-Forman Corp. liquor company executive and heir for 11 weapons, including Buffalo Bill's rifle and Geronimo's bow and arrows.

The indictment says that Michael Salisbury, whom Frazier hired to run the museum, promised to charge him fair market value but instead added markups of up to 100 percent, pocketing the difference.

All three defendants have pleaded not guilty and said Frazier approved of a deal that allowed Salisbury to collect a commission by charging Frazier more than he paid.

"We will prove that Mike and Karen Salisbury are innocent of all the charges brought against them," said their co-counsel, Gregg Hovious.

Assistant U.S. Attorney Terry Cushing, who is prosecuting the case with Eric Long, said his office doesn't comment on pending cases. Wilson's lawyer, Laura Wyrosdick, an assistant federal public defender, couldn't be reached for comment.

The trial -- before U.S. District Judge Charles R. Simpson III -- could offer insight into the often secretive world of high-stakes antique gun dealing.

Frazier, who is expected to testify, has acknowledged that he kept purchase prices secret even from the museum's board, because "Louisville is a very gossipy town" and he "didn't want people running around gossiping about what I did or didn't do."

Salisbury has said he didn't get receipts for the purchases because they are frowned upon in the industry, which likes to deal in cash. The case has roiled the world of antique firearms dealers -- many of whom have been subpoenaed to testify from around the country, said LeRoy Merz, owner of Merz Antique Firearms of Fergus Falls, Minn., the nation's largest dealer in antique Winchesters.

Merz said he has been called to testify by the government, though he said Salisbury is "real fine person" and put together "a fine collection" for Frazier.

"I feel for every party involved," Merz said. "This is a tragedy."

Frazier's tax claim
Court papers suggest that the defendants will try to put Frazier on trial by showing that when he donated guns to the museum's charitable foundation, he valued them for tax purposes at higher amounts than what the Salisburys charged him. That allowed Frazier to get tax deductions that exceeded the price he paid.

For example, the indictment accuses Salisbury of overcharging Frazier by making him pay $300,000 for two of George Custer's pistols that Salisbury acquired for $235,000. Yet Frazier claimed to the Internal Revenue Service that the pair of pistols was worth $500,000.

"Surely, most taxpayers would be interested in how Mr. Frazier is able to tell the IRS they are worth $500,000 but tell the court they are worth less than $300,000," Hovious has written.

Frazier said through a museum spokesman that he'd have no comment until after the trial, and his lawyers were not immediately available for comment.

The charges
Salisbury, of Owens Cross Roads, Ala., bought items on behalf of Frazier and the museum from 1997 to 2002, when he left his job as president of the museum, which opened two years later.

The Salisburys are charged with money laundering, conspiracy to commit fraud and conspiracy to commit money laundering.

They are also accused of profiting from $60,000 in kickbacks allegedly paid by an artist whose paintings were purchased by the museum.

Michael Salisbury also faces four counts of tax evasion that accuse him of failing to report profits from the alleged fraud between 1999 and 2002. If convicted, he faces up to 95 years in prison and $2.5 million in fines.

Wilson, who lives in San Francisco and is the author of more than 40 books on weaponry, is charged with lying on federal tax returns and participating in the conspiracy by submitting false appraisals to cover up Salisbury's allegedly inflated prices.

Payment agreement
The trial could turn on whether the jury finds that a handwritten agreement between Salisbury and Frazier was in effect.

One paragraph in the Aug. 1, 2001, document called for Salisbury to get a 10 percent commission on the first $1 million of purchases and 5 percent on acquisitions that exceeded that.

Frazier has conceded he received the agreement and made handwritten notes on it. But he said he rejected it because of some other provisions and considered it "trash."

But Salisbury's lawyers have noted that Frazier retained the document and didn't scratch out the provisions allowing the commissions.

"Mr. Frazier knew that Mr. Salisbury was earning and keeping commissions on gun transactions and expressly consented to it," Hovious said in motion seeking dismissal of a related lawsuit filed by Frazier and the museum. The suit has been put on hold pending the outcome of the criminal case.

The government has said in its trial brief that even if there was a valid contract, Salisbury "grossly inflated" the purchase price of items he acquired.

Prosecutors Long and Cushing also say Salisbury concealed his alleged misdeeds by falsely claiming that dealers wouldn't provide receipts or by having dealers "doctor" receipts.

The government also said that Salisbury avoided buying guns at public auctions -- where the purchase price would be disclosed -- and laundered his profits by depositing them into bank accounts of Karen Cruse Salisbury, who then was his girlfriend.

http://www.courier-journal.com/apps/pbcs.dll/article?AID=/20071201/NEWS01/712010418

Steve Mace

[Steven Mace]

Posted on Tue, Dec. 04, 2007

Attorney: Gun dealer accused of bilking collector was no fraud

By DYLAN T. LOVAN
Associated Press Writer

LOUISVILLE, Ky. --An antique gun enthusiast accused of bilking a millionaire collector by taking a cut on the guns he sold was actually earning a commission on the sales, defense attorneys said Tuesday.

Michael K. Salisbury is charged in an alleged fraud scheme that federal prosecutors said overcharged the collector, Owsley Brown Frazier, for a long list of famous firearms owned by the likes of Gen. George Custer, Buffalo Bill and J. Edgar Hoover. Some of those guns later ended up in a museum that Frazier funded.

Attorneys for Salisbury said he and Frazier, who preferred to keep his antique purchases private, had a secret agreement that called for Salisbury to receive fees for the firearm acquisitions.

"Whether you call it a commission, whether you call it a finder's fee, whether you call it a sale, Owsley Frazier knew Michael Salisbury was going to make money," Neal Sonnett, an attorney for Salisbury, said Tuesday during opening arguments of a trial in federal court.

Prosecutors say Salisbury, along with his wife, Karen Salisbury, and R.L. Wilson, a noted firearms historian, conspired to bilk about $1.5 million from Frazier, who is the great-grandson of the founder of liquor giant Brown-Forman Corp.

Sonnett said Salisbury, of Owens Crossroads, Ala., wouldn't have traveled all over the country to find and purchase antique guns for a millionaire without being compensated.

"None of what Michael Salisbury was doing was a favor," Sonnett said.

Salisbury and Frazier grew close after they met in 1997 and Salisbury began finding the firearms for Frazier, an avid collector. Frazier later named Salisbury president of the $32 million museum in Louisville.

But prosecutors said Karen Salisbury helped her husband launder the money and Wilson, one of the country's leading authors on antique firearms, offered "predetermined" appraisals of the antiques. They said Wilson, of San Francisco, also profited from the sale of a gun to Frazier and a $300,000 book deal that Frazier bankrolled.

But an attorney for Wilson, Laura Wyrosdick, said that book, "Silk and Steel," was published and was on sale at Frazier's museum as recently as last month.

"Mr. Frazier, who feels that Mr. Wilson is a fraud, or a phony or a crook, is selling his books at his museum," Wyrosdick said Tuesday.

Scott Cox, an attorney for Karen Salisbury, said Frazier and Michael Salisbury's relationship went sour after Frazier hired a bookkeeper at the museum who started questioning some of the transactions between Frazier and Salisbury.

Cox said Frazier turned on Salisbury after Frazier was warned by its former treasurer that the museum, which opened in 2004, could lose its tax-exempt status.

Frazier "turned his back on him," Cox said.

That treasurer, Ed Webb, confirmed during testimony on Tuesday that Salisbury did receive a commission on at least one acquisition, a set of guns and other memorabilia that belonged to the outlaw Jesse James. The commission was $150,000.

The Frazier International History Museum in Louisville houses several ancient and historical weapons. It also has the only permanent U.S. collection from the Royal Armouries, Britain's national repository for arms and armor.

Prosecutors cited as evidence several of Frazier's purchases included in a January 2006 indictment. In one instance, Frazier paid Michael Salisbury $300,000 for a pair of Custer's Colt six-shooters, though Salisbury had acquired them for $235,000.

Court documents filed by Salisbury's attorneys in a lawsuit showed that Frazier later took a $500,000 tax deduction on the Custer pistols. That civil case is on hold until the criminal proceedings are completed.

Both Salisburys face up to 20 years in prison if convicted; Wilson could be sentenced to up to five years.

http://www.kentucky.com/471/story/249517.html

Steve Mace

[Steven Mace]

Gun dealers to try to prove innocence in museum fraud trial

Dec 31, 2007 @ 01:23 PM
By The Associated Press
Herald-Dispatch.com

Three people accused of defrauding the millionaire founder of a historic weapons museum will begin presenting their case to a federal judge this week.

Federal prosecutors have argued that Owsley Brown Frazier, a well-known Louisville philanthropist, grossly overpaid for several antique weapons he later displayed at the museum.

Defense attorneys are expected to begin their case on Wednesday. The defendants are antique dealer Michael Salisbury; his wife, Karen Salisbury; and R.L. Wilson, a world-renowned historic firearms appraiser.

The trial began on Dec. 3 but broke for the holidays.

Much of the evidence concerns famous firearms that Frazier acquired with the help of Salisbury, including a Winchester rifle owned by Buffalo Bill.

http://www.herald-dispatch.com/news/x607057912

Steve Mace

[Steven Mace]

Wednesday, January 23, 2008

Jury clears gun dealer of fraud

Arms museum's founder may still pursue civil case

By Andrew Wolfson
awolfson@courier-journal.com
The Courier-Journal

Michael Salisbury promised to serve Owsley Brown Frazier with "honor and integrity" as he helped the philanthropist amass the gun collection that eventually became the $32 million Frazier International History Museum.

Yesterday, after a six-week trial and more than 11 hours of deliberations, a jury of nine women and three men found that Salisbury did not betray that trust.

The U.S. District Court jury in Louisville found Salisbury and his wife, Karen Cruse Salisbury, not guilty of conspiring to defraud the liquor-fortune heir by overcharging him $1.75 million for historic guns and artifacts he acquired for Frazier's collection.

The couple was also acquitted of money-laundering charges -- for allegedly hiding the profits in Karen Salisbury's bank account. The jury found Michael Salisbury guilty only of two misdemeanors for failing to pay taxes, for which Judge Charles R. Simpson III will sentence him April 28.

One of Salisbury's lawyers, Neal Sonnett, called the verdicts a "total vindication of Mr. Salisbury on any allegation that he tried to cheat Mr. Frazier."

A third defendant, R.L. Wilson, who was described during the trial as the world's leading expert on antique weapons and was accused of inflating the appraised value of Frazier's collection, was acquitted on charges of aiding and abetting a false income-tax return.

The Salisburys, who live in Alabama, broke into tears as the verdicts were announced. Frazier, sitting in a wheelchair in the courtroom aisle, stared straight ahead, closing his eyes but showing no emotion.

None of them would comment afterward, but Sonnett, of Miami, said the verdict showed that the prosecutors shouldn't have pursued the case.

"As I told the jury, if Owsley Bumford had brought this complaint, they would ... not have proceeded," he said.

Scott Cox, one of Karen Salisbury's lawyers, said she was "tremendously relieved" but that the prosecution had driven her out of her frame-shop business and imposed "a horrible burden on her and her family."

Beth Reid, the museum's general counsel, said Frazier and the museum haven't decided whether they will press on with a pending lawsuit in which they accuse Michael Salisbury of civil fraud by secretly charging commissions on the purchases -- the same allegation as in the criminal case.

"We are studying our options," she said.

But co-counsel Gregg Hovious, who has defended the Salisburys in the lawsuits, suggested the couple would sue Frazier for malicious prosecution if he proceeds.

"They had better study those options carefully," Hovious said.

U.S. Attorney Dave Huber said in an interview that he and assistant U.S. attorneys Eric Long and Terry Cushing were disappointed in the verdict but respect the jury's decision.

Huber said his office was obligated to try the case "because we had an allegation of major fraud against not only an individual, but a museum."

Huber said Frazier's deteriorating physical condition -- he claimed in two days of testimony not to remember key facts in the case -- was responsible for creating reasonable doubt.

Federal prosecutors depicted Michael Salisbury as a "con man" and Frazier as his mark.

But Salisbury's lawyers put the retired Brown-Forman executive on trial, calling him a "liar" and claiming that he turned on Salisbury to protect himself and the museum after questions were raised that could have jeopardized its tax-exempt status and his tax liabilities.

Neither Salisbury nor his wife testified, but their lawyer accused Frazier's lawyers, accountants and even his long-time secretary of conducting a conspiracy against Michael Salisbury so they could preserve their standing with Frazier.

The government's case was damaged when Frazier, who acknowledged he makes as much as $7 million a year in interest income alone, said on the stand that he expected Salisbury to make commissions.

Frazier also admitted that when he was president and owner of Bittners, he tried to sell antique furniture for double or more what he paid for it wholesale.

The defense lawyers also showed that Frazier claimed more in tax write-offs on most of the weapons when he donated them to the museum than he paid Salisbury for them, even with the commissions.

"If there was a con game going on, it was Frazier's," Sonnett said during his closing argument last week.

The government, however, showed that Salisbury procured bogus receipts to cover up the markups, indicating that he knew what he was doing was wrong.

Prosecutors also tried to show that Salisbury, after he was named president of the museum in 2001, needed to conceal commissions and kickbacks by using the account of his then-girlfriend Karen Cruse because it would have been illegal for him to have received the money directly.

Salisbury faced up to 30 years in prison and a $2.5 million fine if he had been convicted of fraud.

The government contended that Karen Salisbury advanced the conspiracy by "schmoozing" Frazier, giving him hugs and kisses, pushing him in his wheelchair, and isolating him from others who could have warned him that Michael Salisbury was ripping him off.

Sonnett denounced those allegations as "cheap shots."

The Salisburys also were charged with laundering money they got from Frazier when they put it in Karen Salisbury's bank account. But attorney Rob Eggert, who also represented Karen Salisbury, noted that Frazier approved of passing the money through her account so that he wouldn't get dragged into any future divorce that might pit Michael Salisbury against his wife.

Michael Salisbury also was charged with tax evasion for failing to report income on the deals from 1999 through 2002. He was convicted on the lesser charge of failing to file taxes in two of those years.

The principal charge against Wilson -- that he joined in the conspiracy to defraud Frazier -- was dismissed earlier in the trial by Judge Simpson.

That left Wilson charged only with aiding and abetting a false tax return filed by Frazier. The government charged that he inflated appraisals of Frazier's weapons to cover for the exorbitant amounts charged by Michael Salisbury, and to curry favor with Frazier so he could get a $300,000 deal for a book about the museum's collection.

But Wilson's lawyer, Laura Wyrosdick, said Wilson had already written 45 books and wouldn't have committed a crime to get a contract for another one.

"I am very happy," Wyrosdick, a deputy federal public defender, said after the verdicts were announced. "I knew all along he was innocent."

Steve Mace