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Reserch was done, and a family member removed the fireing pin and welded the action shut. It now hangs on his wall in a shadow box in memory of his grandfather. No laws are broken and a family treasure is in a place of honor as it should be. The ATF was not called, but if they find and check this gun it has been made unfireable.
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You would have to ask the ATF if welding the action shut is sufficient to keep someone out of jail.
They might say no.
Firearms that are Machine guns, violate the NFA, are pure poison. You just don't know if the ATF wants to make you the evil poster child of the year and nail your hide to the wall, or not.
You can find the threads, David Olofson went to jail because the AR15 he lent out, malfunctioned and doubled. The ATF took the position that it was a machine gun. The owner got 30 months in jail.
http://www.wnd.com/index.php?fa=PAGE.view&pageId=68590
The ATF has gone after people with semi auto's that doubled because the free floating firing pin hit a sensitive commerical primer.