U.S. IS ARMS BAZAAR FOR MEXICAN CARTELS

PHOENIX -- The Mexican agents who moved in on a safe house full of
drug dealers last May were not prepared for the fire power that greeted them.

When the shooting was over, eight agents were dead. Among the guns
the police recovered was an assault rifle traced back across the
border to a dingy gun store here called X-Caliber Guns.

Now, the owner, George Iknadosian, will go on trial on charges he
sold hundreds of weapons, mostly AK-47 rifles, to smugglers, knowing
they would send them to a drug cartel in the western state of
Sinaloa. The guns helped fuel the gang warfare in which more than
6,000 Mexicans died last year.

Mexican authorities have long complained that American gun dealers
are arming the cartels. This case is the most prominent prosecution
of an American gun dealer since the United States promised Mexico two
years ago it would clamp down on the smuggling of weapons across the
border. It also offers a rare glimpse of how weapons delivered to
American gun dealers are being moved into Mexico and wielded in
horrific crimes.

"We had a direct pipeline from Iknadosian to the Sinaloa cartel,"
said Thomas G. Mangan, a spokesman for the federal Bureau of Alcohol,
Tobacco, Firearms and Explosives in Phoenix.

Drug gangs seek out guns in the United States because the gun-control
laws are far tougher in Mexico. Mexican civilians must get approval
from the military to buy guns and they cannot own large-caliber
rifles or high-powered pistols, which are considered military weapons.

The ease with which Mr. Iknadosian and two other men transported
weapons to Mexico over a two-year period illustrates just how
difficult it is to stop the illicit trade, law enforcement officials here say.

The gun laws in the United States allow the sale of multiple
military-style rifles to American citizens without reporting the
sales to the government, and the Mexicans search relatively few cars
and trucks going south across their border.

What is more, the sheer volume of licensed dealers -- more than 6,600
along the border alone, many of them operating out of their houses --
makes policing them a tall order. Currently the A.T.F. has about 200
agents assigned to the task.

Smugglers routinely enlist Americans with clean criminal records to
buy two or three rifles at a time, often from different shops, then
transport them across the border in cars and trucks, often secreting
them in door panels or under the hood, law enforcement officials here
say. Some of the smuggled weapons are also bought from private
individuals at gun shows, and the law requires no notification of the
authorities in those cases.

"We can move against the most outrageous purveyors of arms to Mexico,
but the characteristic of the arms trade is it's a 'parade of ants'
-- it's not any one big dealer, it's lots of individuals," said
Arizona's attorney general, Terry Goddard, who is prosecuting Mr.
Iknadosian. "That makes it very hard to detect because it's often
below the radar."

The Mexican government began to clamp down on drug cartels in late
2006, unleashing a war that daily deposits dozens of bodies -- often
gruesomely tortured -- on Mexico's streets. President Felipe Calderon
has characterized the stream of smuggled weapons as one of the most
significant threats to security in his country. The Mexican
authorities say they seized 20,000 weapons from drug gangs in 2008,
the majority bought in the United States.

The authorities in the United States say they do not know how many
firearms are transported across the border each year, in part because
the federal government does not track gun sales and traces only
weapons used in crimes. But A.T.F. officials estimate 90 percent of
the weapons recovered in Mexico come from dealers north of the border.

In 2007, the firearms agency traced 2,400 weapons seized in Mexico
back to dealers in the United States, and 1,800 of those came from
dealers operating in the four states along the border, with Texas
first, followed by California, Arizona and New Mexico.

Mr. Iknadosian is accused of being one of those dealers. So brazen
was his operation that the smugglers paid him in advance for the guns
and the straw buyers merely filled out the required paperwork and
carried the weapons off, according to A.T.F. investigative reports.
The agency said Mr. Iknadosian also sold several guns to undercover
agents who had explicitly informed him that they intended to resell
them in Mexico.

Mr. Iknadosian, 47, will face trial on March 3 on charges including
fraud, conspiracy and assisting a criminal syndicate. His lawyer,
Thomas M. Baker, declined to comment on the charges, but said Mr.
Iknadosian maintained his innocence. No one answered the telephone at
Mr. Iknadosian's home in Glendale, Ariz.

A native of Egypt who spent much of his life in California, Mr.
Iknadosian moved his gun-selling operation to Arizona in 2004,
because the gun laws were more lenient, prosecutors said.

Over the two years leading up to his arrest last May, he sold more
than 700 weapons of the kind currently sought by drug dealers in
Mexico, including 515 AK-47 rifles and one .50 caliber rifle that can
penetrate an engine block or bulletproof glass, the A.T.F. said.

Based on the store's records and the statements of some defendants,
investigators estimate at least 600 of those weapons were smuggled to
Mexico. So far, the Mexican authorities have seized seven of the
Kalashnikov-style rifles from gunmen for the Beltran Leyva cartel who
had battled with the police.

The store was also said to be the source for a Colt .38-caliber
pistol stuck in the belt of a reputed drug kingpin, Alfredo Beltran
Leyva, when he was arrested a year ago in the Sinaloan town of
Culiacan. Also linked to the store was a diamond-studded handgun
carried by another reputed mobster, Hugo David Castro, known as El
Once, who was arrested in November on charges he took part in killing
a state police chief in Sonora.

According to reports by A.T.F. investigators, Mr. Iknadosian sold
more than 60 assault rifles in late 2007 and early 2008 to straw
buyers working for two brothers -- Hugo Miguel Gamez, 26, and Cesar
Bojorguez Gamez, 27 -- who then smuggled them into Mexico.

The brothers instructed the buyers to show up at X-Caliber Guns and
to tell Mr. Iknadosian they were there to pick up guns for "Cesar" or
"C," the A.T.F. said. Mr. Iknadosian then helped the buyers fill out
the required federal form, called the F.B.I. to check their records
and handed over the rifles. The straw buyers would then meet one of
the brothers to deliver the merchandise. They were paid $100 a gun.

The Gamez brothers have pleaded guilty to a count of attempted fraud.
Seven of the buyers arrested last May have pleaded guilty to lesser
charges and have agreed to testify against Mr. Iknadosian, prosecutors said.

In one transaction, Mr. Iknadosian gave advice about how to buy
weapons and smuggle them to a person who turned out to be an
informant who was recording him, according to a transcript. He told
the informant to break the sales up into batches and never to carry
more than two weapons in a car.

"If you got pulled over, two is no biggie," Mr. Iknadosian is quoted
as saying in the transcript. "Four is a question. Fifteen is, 'What
are you doing?' "