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All the Feds have to do is deny they had anything to do with the illegal acts. That probably can't work in this case, but you can bet that was an option before the operation came unraveled.
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That's what worried me at first: that nobody would listen to Howard's side of the story. Fortunately, he appears to have kept records of emails and meetings with agents and with the US Attorney.
If he hadn't, and if the ATF had some plausible deniability, Mr. Howard would have been scapegoated. As soon as the Terry gun was traced back to his shop, he'd have been "outed" as the guy who "supplied the cartels," and they'd have thrown him in prison.