"If you are a federally licensed gun dealer and your license is revoked because you've engaged in misconduct, … your entire inventory, under prevailing law, is deemed your personal collection. You then can sell it free from any background checks."
U.S. Rep. David Cicilline, D-R.I., in a news conference
Cicilline spokesman Richard Luchette referred us to the federal firearms law. We found Section 923 of Title 18, Chapter 44, which includes some of the regulations on federally licensed firearms dealers.
But the law doesn't specifically address what gun dealers who lose their federal licenses can do with the firearms in their inventory. That absence, according to Cicilline and other gun-control supporters, is a serious loophole, allowing dealers to transfer their inventory into a personal collection and then sell those firearms — without requiring buyers to submit to a background check.
Luchette also sent us links to a couple of examples provided by Mayors Against Illegal Guns, headed by New York City Mayor Michael Bloomberg and Boston Mayor Thomas Menino.
One 2006 example involved a Maryland gun dealer who had lost his license for multiple violations in which firearms in his sales inventory were unaccounted for.
After the dealer filed a federal lawsuit against the director of the federal Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Department of Justice issued a legal opinion that said "'when a dealer loses his license, he can dispose of his inventory by selling those firearms without being deemed to have engaged in the business in violation of" a federal law.
The gun dealer would violate the law only "if he chooses to purchase and resell firearms," the opinion stated.
We also contacted the Bureau of Alcohol, Tobacco, Firearms and Explosives, the agency that handles licensing of firearms dealers.
ATF spokeswoman Debora Seifert said that once someone is no longer a federally licensed firearms dealer, either voluntarily or because his license is revoked for some misconduct, then "they are citizens, so they have the ability to convert the firearms from their (sales inventory) into their own personal inventory."
Therefore, she said, dealers who are no longer federally licensed do not come under the ATF's purview. Because they are no longer subject to the federal jurisdiction of the ATF, they can conceivably sell those firearms. Those sales are free from federal requirements for background checks of buyers.
We rate the claim True.
Edited for print. Read the full version at PolitiFact.com.