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The Business of Guns

The Demise — and Rebirth — of a Notorious Nevada Gunmaker

Facing multiple lawsuits, Jimenez Arms declared bankruptcy earlier this year. Now it's starting anew.

This story was published in partnership with The Daily Beast.

In 2018, federal agents revealed that guns made by Jimenez Arms Inc. had been funneled into an alleged trafficking network based in Kansas City, Missouri. The network’s suspected leader, a fire department captain, had allegedly purchased pistols directly from the company even though he lacked the appropriate license. Two years later, Jimenez Arms filed for bankruptcy. 

For Alvino Crawford and his wife Beverly, the bankruptcy triggered mixed emotions. It imperiled their lawsuit against Jimenez Arms, the low-end gunmaker that had produced the allegedly trafficked handgun used to kill their 29-year-old son in 2016. But the Crawfords believed that their efforts had helped compel the 15-year-old company to shutter, and they took solace knowing they might have spared other parents the pain of losing a child to its products.

“I feel like [Jimenez Arms closing] is a jumping-off point, not only for people here in Kansas City, but also for those around the country who want to hold gun manufacturers accountable for inappropriate behavior,” Alvino Crawford told The Trace at the time. “I just hope they don’t find a loophole or some way to reorganize and start doing the same thing again.” 

Less than two months after declaring Jimenez Arms insolvent, however, the company’s president, Paul Jimenez, had begun reorganizing the operation. In late April, the Bureau of Alcohol, Tobacco, Firearms and Explosives granted him a license to manufacture firearms under the name JA Industries LLC, at a facility in walking distance of Jimenez Arms’ former headquarters. 

The Crawfords were shocked when their attorneys told them the news. “It’s unconscionable to think that Mr. Jimenez would be able to do this,” Alvino Crawford said. 

Paul Jimenez’s repackaging of his company reflects a time-tested strategy for countering litigation and regulatory scrutiny. JA Industries is 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 crime. 

While lawsuit-burdened businesses often seek shelter in bankruptcy court, the emergence of JA Industries comes as plaintiffs’ attorneys are proving increasingly successful at piercing the gun industry’s special legal protections, fueling concerns that other executives will take similar steps as the threat of litigation intensifies. Remington Outdoor Co., long among the nation’s largest gun producers, filed for bankruptcy protection on July 27, jeopardizing a potentially revelatory lawsuit brought by the families of children killed in the 2012 Sandy Hook Elementary School massacre in Newtown, Connecticut. 

Through public records requests, The Trace obtained Jimenez’s license application and audio recordings of the recent bankruptcy hearings, which were conducted via telephone because of the pandemic. We also examined thousands of pages of complaints, transcripts, inspection reports, and other materials culled from civil and criminal court cases. 

We found evidence that Paul Jimenez’s business arrangements were part of a long-running pattern of schemes that have repeatedly blocked victims seeking justice through the courts. His predecessor, Bruce Jennings, used similar tactics while operating the earlier companies and brought himself under investigation for tax fraud. Many of the details surfaced during our review have not been previously reported. Paul Jimenez did not respond to multiple voicemails and emails seeking comment for this story.

Jimenez Arms originated in Southern California, where Bruce Jennings, his family, and their close associates began establishing manufacturers to meet Americans’ demand for cheap handguns after 1968 legislation restricted their importation. The Jennings family companies pumped out millions of low-quality pistols colloquially known as “junk guns” or “Saturday Night Specials” (the latter term has garnered criticism for racial overtones). 

As their products played an outsized role in violence, the Jennings family amassed a fortune. Bruce Jennings, for example, bought a 52,000-square-foot Arizona mansion with an indoor ice skating rink, drove a Ferrari, and owned a number of airplanes, including a P-51 Mustang named “Saturday Night Special.”

Dr. Garen Wintemute, an emergency room physician and director of the Violence Prevention Research Program at the University of California, Davis, famously coined the moniker “Ring of Fire” after noticing that the biggest junk-gun manufacturers were located in a circle around Los Angeles. Of the six manufacturers in operation when Wintemute released his report on the Ring of Fire companies in 1994, five were owned by the Jennings family or its close associates. “It’s S.O.P. [standard operating procedure] for these people is to get in trouble, leave the trouble behind through bankruptcy, and start over,” Wintemute told The Trace. “This sort of reinvention has worked since the beginning.”

Bruce Jennings garnered national attention after a 7-year-old Northern California boy named Brandon Maxfield was shot through the face and neck as a family friend was trying to unload a pistol produced by Jennings’s company Bryco Arms. The shooting left the boy permanently paralyzed from the neck down. In order to fix a jamming problem in earlier versions of the Model 38, Jennings had redesigned the gun so users couldn’t unload it with the safety on. The Maxfield family sued, and in 2003, a jury ordered Jennings and his companies to cough up more than $21 million in damages; they declared bankruptcy one day later. 

As the bankruptcy auction neared, the Maxfields and their attorney raised money in hopes of buying Bryco — but only to dismantle it. The effort failed when they were narrowly outbid. 

The winner was Bryco’s factory foreman: Paul Jimenez. 

Jimenez, who’d worked at Bryco for more than a decade, offered $510,000 for the company, beating the Maxfields’ bid of $505,000. Their attorneys questioned how Jimenez had the financial resources for such a purchase, noting his salary at Bryco was only $30,000 a year. Jimenez claimed the money would come out of his life savings, but The New York Times later reported that on the same day he won the bidding, Shining Star Investments, LLC, a gun distributor owned by Jennings’s second ex-wife, wired Jimenez $430,000. Jennings’s lawyer at the time denied his client had funded the wire transfer and said it was an “arms-length transaction.” 

The ATF revoked Jennings’s gun license shortly before his bankruptcy, because of a Congressional amendment making misdemeanor domestic violence a disqualifying offense. More than a decade earlier, Jennings had pleaded down an initial felony charge for breaking his wife’s jaw. Despite Jennings being cast out of the industry, ATF records provided to The Trace show he met with the inspector considering the license for Paul Jimenez and threatened to sue if there was a delay. 

With the license in hand, Paul Jimenez began manufacturing conspicuously similar handguns at Bryco’s former Costa Mesa plant under the name Jimenez Arms. California regulators initially refused to let Jimenez Arms sell its 9mm model because the prototype provided by Paul Jimenez had the word “Bryco” buffed out, inspection records show. After tests arranged by Maxfield’s attorney found several Jimenez Arms models violated the state’s safety and performance standards, the California Attorney General’s Office ordered the company to stop manufacturing. But Paul Jimenez had already begun, and later completed, a move of the operation to Henderson, Nevada, which lacked such requirements. 

Paul Jimenez denied that Jennings was behind the formation of Jimenez Arms and told the ATF he would have no role in the business. But during more recent civil litigation, Jimenez said that Jennings began loaning Jimenez Arms money as early as 2006. The following year, Paul Jimenez sold a majority stake of the company to trusts that Jennings had set up for two of his children, court records and inspection reports show. The Jennings family continued to own stock in Jimenez Arms for about another decade. 

In 2012, a federal raid on Jennings’s Florida home netted a laptop and external harddrives containing thousands of movies and images of children engaged in sex acts. One agent testified that the search also turned up a book titled How to Hide Your Assets and Disappear, with Jennings’s business card tucked between the pages as a bookmark. 

Jennings pleaded guilty to child pornography charges and was sentenced to 10 years in prison. At around the same time, Jimenez Arms agreed to pay $1 million for JoJen Inc., a Florida gun distributor owned by Jennings’s fourth wife, court records show. Jennings, now 71, did not respond to a letter seeking comment for this article. 

Jimenez Arms ranked among the 25 biggest American pistol producers as recently as 2017, but it holds less than $34,000 in assets, according to bankruptcy records. Paul Jimenez has attributed the company’s downfall to the so-called Trump Slump, an industrywide drop in sales after the president’s election allayed fears of stricter federal gun laws. 

Court records indicate other reasons for Jimenez Arms’ paltry value. Through his sole proprietorship, Paul Jimenez maintained personal ownership of the machinery and gunmaking components purchased during the Bryco bankruptcy auction — and charged Jimenez Arms to lease them. A 2016 shareholder lawsuit alleged that Jimenez had frequently sucked out most or all of the company’s profits in this way. The lawsuit, brought by Jennings’s daughter who held stock in Jimenez Arms, claimed that Paul Jimenez took more than $3 million out of the company under the guise of “rents” and other expenses.

Experts say the arrangement recalls how Jennings managed Jimenez Arms’ predecessors. A lawyer helping Brandon Maxfield collect on the judgment against Bryco wrote in one filing that Jennings utilized “a variety of legal entities and trusts” to keep money “one step ahead” of litigants and other creditors. As one example, the lawyer noted that funds from Bryco were paid as “rent” to an entity “purportedly owned” by trusts set up for Jennings’s children. 

Mike Harkins, a journalist who chronicled Maxfield’s case in his book Move to Fire, said such schemes were part of an effort by Jennings to keep his companies from posting a profit. “Where there’s no profit, there’s no money for plaintiffs, and that was part of his philosophy on being judgment-proof, knowing that bankruptcy was always an option,” Harkins said. “I have no doubt Paul Jimenez learned from that.” 

In a countersuit against Jennings’s daughter, Jimenez accused her and her family of pressuring Jimenez Arms to exclusively sell guns at artificially low prices to Shining Star Investments, the distributor owned by her mother. (The legal dispute ended in a settlement.) Firearm manufacturers are required to pay a 10 percent excise tax on their sales prices for pistols. The tax does not apply to distributors. Therefore, if Jimenez Arms marked down its prices, it would have avoided paying the usual tax amount. For Shining Star Investments, meanwhile, the discount could have netted bigger profits when it resold the guns to retailers. 

Paul Jimenez claimed the Jennings family members’ “unlawful conduct” had exposed him to “prosecution,” according to the countersuit. A 1992 exposé about the Jenningses in The Wall Street Journal reported that the Internal Revenue Service considered charging Bruce Jennings with tax fraud after learning Bryco sold guns at artificially low prices to a distributor he owned. As the IRS built its case, the ATF held off revoking Jennings’s licenses, which it was planning to do based on a determination that he had “purposely falsified” information to “shield” his involvement in gun businesses after receiving the felony domestic violence charge

According to ATF records provided to The Trace, Jennings told the inspectors investigating him that he had left a company based in Chino, California, “open” even though it was “dormant” in order to “stack up” product-liability suits. “Sometime in the future, I will file… bankruptcy proceedings and will go out of business in Chino,” Jennings reportedly said.

A spokesperson for the Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau, which now enforces excise tax payments from gunmakers, said he couldn’t legally comment on specific cases. Public records, however, indicate the trade bureau imposed a tax lien on Jimenez Arms in 2017. Its more recent bankruptcy petition shows the company owes federal excise taxes in the amount of $900,000, accounting for nearly half of the company’s $2.3 million debt heap. 

The bankruptcy court is required to use money raised from the sale of Jimenez Arms to pay off the company’s tax debts — including the $900,000 excise tax bill — before divvying the leftovers among plaintiffs and other creditors, according to Carron Nicks, a Texas-based bankruptcy lawyer. Considering the company’s listed assets are worth less than $34,000, “these poor plaintiffs could get, if anything, pennies on the dollar,” Nicks said. 

As plaintiffs’ attorneys probe Jimenez Arms for any assets that could have been inappropriately transferred out of the company, they have lashed out at the ATF, saying the decision to issue Paul Jimenez another license exemplifies the agency’s lackluster oversight of the gun industry. “I wasn’t surprised Mr. Jimenez tried to get a new license, but I was shocked the ATF let it happen,” said Alla Lefkowitz, the director of affirmative litigation for Everytown Law, the legal branch of the advocacy group Everytown for Gun Safety, which is helping represent plaintiffs in two cases against Jimenez Arms. “They’re letting him make a mockery of the licensing process.” (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.) 

Congress has sharply restricted the ATF’s discretion over licensing decisions, mandating that applicants be approved as long as a short list of conditions is met. Still, Lefkowitz said there was ample reason to reject Paul Jimenez’s latest application. She pointed to inspection records showing the bureau had cited Jimenez Arms for multiple violations of federal gun laws during inspections dating back to at least 2012. Even more striking, she said, the ATF’s own agents identified Jimenez Arms as the primary supplier for the Kansas City firefighter arrested on gun-trafficking charges. 

“There’s an extensive record of Jimenez Arms apparently engaging in illegal and reckless business practices,” Lefkowitz said. “And just changing the name of the company shouldn’t mean Mr. Jimenez gets to avoid the consequences and keep selling guns the same way he’s always been.”

On July 8, Everytown Law sent the ATF a 10-page letter demanding the agency reverse its “reckless and irresponsible” decision to issue a manufacturing license to Paul Jimenez’s newest entity. 

The ATF did not respond to requests for comment.

Jimenez Arms’ legal entanglements began in the spring of 2014. Melinda Orr, a 44-year-old county government employee in East Texas, was getting into her car at home when her Jimenez Arms model J.A. 380 pistol slipped out of its partially unzipped carrying case, the local sheriff’s office said. The pistol hit the ground and fired, fatally shooting Orr in the face. 

The shooting prompted Orr’s husband and parents to sue, alleging that Jimenez Arms had failed to recall J.A. 380s after learning the weapons were prone to discharging when jostled or dropped. After two years in court, the Orr family agreed to settle. The original settlement amount is confidential, but when Jimenez Arms entered bankruptcy in February, the company still owed $625,000, according to its initial filing

Rusty Phenix, the family’s attorney, said Orr might still be alive if federal regulators could force manufacturers like Jimenez Arms to recall defective firearms. But when Congress created the Consumer Product Safety Commission in 1972, lawmakers expressly exempted firearms from the agency’s jurisdiction. 

In 2018, Remington finalized a class-action settlement following claims that a defect in the company’s popular line of Model 700 rifles caused them to shoot without the trigger being pulled. The CPSC couldn’t force Remington to initiate a recall, even as the rifles were linked to dozens of deaths and hundreds of serious injuries. (Remington voluntarily recalled some of the rifles in response to the class-action suit, but millions remained in circulation). The CPSC could, however, mandate recalls of ceramic travel mugs because their lids didn’t fit properly, tea pitchers prone to leaking and burning people, and sports jerseys shown to cause lacerations.

“This is one of those things that just strikes me as odd,” Phenix said. The CPSC is “why we don’t have flammable pajamas… But it has no ability to deal with safety issues as they relate to guns, which are inherently dangerous.” 

As Jimenez Arms defended itself in Texas, more trouble began brewing in Missouri. 

Dwight Crawford had spent most of his life in the Kansas City area after being adopted when he was 3 or 4 years old. At 29, his family knew him as an avid Chiefs fan who loved to draw and planned on pursuing a career as a barber. 

“I was very proud to see the young man that he was growing up to be,” said his father, Alvino Crawford. “And for him to lose his life the way he did makes it much more difficult for us.”

On a warm summer night in 2016, Dwight Crawford stopped to tie his shoe on a corner in the Rockhill Manor neighborhood. According to a police report, two attackers set upon him. The first beat Crawford with a baseball bat. When he tried to get up, the second, a 16-year-old boy, pulled out a J.A. 380 and shot him multiple times. 

The ATF knew that a gun-trafficking network might have been operating in Kansas City, but the bureau would not mount a serious investigation until 2018, when an analyst noticed the J.A. 380 from Crawford’s killing was one of several guns used in crimes after passing through the hands of a Kansas City Fire Department captain named James Samuels. 

Samuels was arrested 10 months later and is facing federal charges for allegedly trafficking 77 firearms into Kansas City over a five-year period. Of those guns, 57 of them were Jimenez Arms pistols. One ATF investigator said in an affidavit that the company’s role came as little surprise given how its pistols were “frequently used by criminals.” Because the pistols are “commonly inexpensive,” the agent wrote, profits could be made “by buying them at a low cost and selling them at marked up price to prohibited individuals.”

The ATF said Samuels often bought handguns directly from Jimenez Arms and had them shipped to a licensed retailer for pickup. That changed after Samuels told Jimenez Arms that his usual retailer had moved and gave his home address as the new location. The company subsequently shipped 11 pistols directly to the firefighter’s house, court records show. Samuels has pleaded not guilty.

The ATF never charged Jimenez Arms in connection to Samuels’s trafficking ring, but recent lawsuits against the company have relied on details from the investigation to mount accusations of wrongdoing. Kansas City Mayor Quinton Lucas, a Democrat, announced in January that the city had filed a suit alleging Jimenez Arms facilitated the trafficking scheme and should reimburse taxpayers for police services and other violence-related costs. A judge ruled in February that the Crawfords could move forward with similar claims. Jimenez Arms entered bankruptcy one week later. 

Since losing his son, Alvino Crawford has vigorously advocated for a crackdown on nefarious handgun manufacturers. He believes Jimenez Arms was only concerned about making money and didn’t care if its products injured or killed people. 

“This manufacturer is where it started, but if there were other people that knew about this and did nothing, whether they are in government or wherever, they need to be held accountable, too,” Crawford said. “Lives are at stake.”