Federal authorities have brought gun charges against a man they say admitted selling guns to Chattanooga gang members.
The FBI said a search of the home of James Rex Gregory turned up 107 firearms, thousands of rounds of ammunition, 120 grams of marijuana, 176 hydrocodone pills, approximately 40 gallons of moonshine and $80,670 in U.S. currency.
Gregory has agreed to plead guilty to selling firearms without a license and to selling firearms to a prohibited person.
He faces up to five years in federal prison.
In August 2010, ATF agents began investigating Gregory for selling firearms without a license. Authorities said Gregory ran frequent ads in the Tennessee Trader indicating multiple firearms were for sale.
Between August 2010 and June 2011, he advertised the sale of more than 40 different firearms. There is no record of him applying for or obtaining a license, it was stated.
Beginning on Dec. 20, 2010, an ATF agent acting in an undercover capacity contacted Gregory regarding the firearms he advertised for sale. Between Dec. 2010 and June 2011, the undercover agent purchased more than 10 firearms from the defendant. During these deals, Gregory offered numerous other firearms for sale or trade; he told the agent what he would sell the firearms to make a profit; and he sought out and bought firearms for the sole purpose of selling them to the undercover agent or another purchaser, it was stated.
The undercover agent told Gregory on several occasions that he was going to sell the firearms purchased from the defendant to gang members in New Jersey, authorities said. The defendant admitted that he sold firearms to gang members in Chattanooga, it was stated.
While the agent was purchasing firearms from the defendant, he also offered to sell the agent hydrocodone pills. The agent purchased a total of 140 hydrocodone pills from the defendant on four separate occasions (including 30 hydrocodone pills traded on June 23, 2011).
On Jan. 28, 2011, an individual working as a confidential source for ATF agents purchased three firearms from Gregory. This individual is a prohibited person, specifically a person who has been convicted of an offense for which the punishment exceeds one year.
During the sale, the individual told Gregory that he had served several years in prison and would not be able to pass a background check. He was able to buy firearms from Gregory, it was stated.
On June 23, 2011, the defendant arranged for a trade with the undercover agent, where the defendant would give the agent seven firearms and 30 hydrocodone pills in exchange for two pounds of marijuana. As soon as the transaction was complete, ATF agents arrested Gregory and executed a federal search warrant of the residence.
Agents found the cache of firearms, ammunition, drugs, moonshine and cash.
The agents also found a sign on the door of the residence that said "Closed 6 pm."