Man who sold guns across West pleads guilty after feds seize more than 500 weapons in Nevada

By the time federal agents had finished searching Gary Keith Osterhout’s home in Sparks, Nevada, nearly a year ago, they pulled 510 handguns and rifles out of the house.

Revolvers, shotguns, rifles, an inventory so large it took more than 10 pages of single-spaced type to list them all in court documents.

The homemade arsenal had been assembled by the former Tracy resident by traveling to gun shows throughout the west and paying cash for hundreds of weapons “to avoid creating a paper trail,” weapons that he later sold out of the trunk of his car to residents of California, federal prosecutors say.

There was only one problem: “The defendant has never held, nor applied for, a federal firearms license,” court records say.

On Thursday, Osterhout pleaded guilty in Sacramento federal court to a single count of unlawful dealing in firearms, part of a plea agreement under which he agreed to give up ownership of hundreds of weapons from his armory.

“The defendant purchased guns from legitimate sources and then re-sold the guns on the black market,” court records say. “Between March 1, 2015, and February 12, 2019, the defendant purchased at least 290 firearms.

“Fourteen of those guns were later recovered by law enforcement as part of unrelated criminal investigations.”

Court records say undercover agents with the federal Bureau of Alcohol, Tobacco, Firearms, and Explosives bought 40 weapons from Osterhout during eight buys between May 2018 and February 2019, and during the transactions Osterhout did not fill out any of the required ATF weapons transfer forms or conduct background checks on the buyers.

Instead, he explained his business model to the agents, court papers say.

“During the firearms transactions with ATF undercover agents, the defendant stated that during a big gun show, he will typically gross $20,000—$30,000 and that he typically makes $100 in profit from each gun sold,” court records say. “The defendant said that he had friends that held federal firearms licenses, but the defendant did not want to deal with ATF or let ATF know what he was doing.

“The defendant said that he used cash to avoid creating a paper trail.”

Authorities say Osterhout first came to their attention as the ATF and Sacramento police were investigating guns purchased by a south Sacramento gang.

That investigation led them back to Osterhout, who officials say originally sold one of the weapons.

Undercover agents later made buys from Osterhout at roadside sales in Truckee, Emigrant Gap, Reno and Verdi, Nevada.

Court records say some of the weapons Osterhout sold later turned up in unrelated investigations, including the discovery of a 9 mm Beretta pistol Mexican police recovered in Chiapas from a car that was believed to be en route to deliver weapons to Guatemala.

Court records also say Osterhout described to an undercover agent in October 2018 his distaste for California’s strict gun laws.

“Osterhout relayed to the (undercover buyer) that ‘I don’t have a problem selling to people from California because I lived in California and know how f----- up it is,’” court documents say.