Judge: Retired Salem police captain reaped profits from post-Sandy Hook gun sales

Sep. 2—CONCORD — A now-retired Salem police captain who ran a sideline business selling guns online was able to boost his profits by selling rifles at inflated prices immediately following the 2012 Sandy Hook school shooting, according to information disclosed in a federal judge's order.

Fears of an assault weapons ban doubled the prices of the weapons, and retired Capt. Michael J. Wagner pocketed $33,000 from the sales, according to an order issued Wednesday by a judge in U.S. District Court in Concord.

The order is the latest in a tax evasion case that the IRS has brought against Wagner, who went on leave in February 2019 and retired in August 2020. His is the only surviving case of a years-long investigation by authorities into wrongdoings at the Salem Police Department.

According to court filings, Wagner used his 25% police discount at the New Hampshire-based gunmaker SIG Sauer to buy firearms and sell them online without a federal firearms license. Wagner purchased 36 rifles — there is no indication of what type of rifles — between Dec. 23, 2012, and Jan. 22, 2013, according to the order.

Twenty school children and six adults died at the Sandy Hook shooting, which took place on Dec. 14, 2012, in Newtown, Connecticut. The shooter, Adam Lanza, was born in New Hampshire and moved to Newtown at age 6. He killed himself at the scene.

In an email, defense lawyer Mark Lytle of Manchester said Wagner has never violated any firearms laws and has never been charged with doing so.

"The IRS has alleged a single count of violating the tax law, which he will defend against vigorously at trial and trusts that he will be vindicated by a jury of his peers," Lytle said.

An investigation by the Bureau of Alcohol, Tobacco and Firearms determined that Wagner sold multiple firearms over the internet on gunbroker.com during "a brief period of high demand," reads an order issued by District Court Judge Paul Barbadoro.

"(ATF Agent John) Cook testified that Wagner sold the firearms shortly after the Sandy Hook school shooting, when prices for assault rifles doubled based on speculation that an assault weapons ban was imminent," reads a footnote in the order.

The New Hampshire Attorney General, the FBI and the ATF all investigated Wagner for possible wrongdoing. Topics include:

Sales of firearms could have been a violation of the New Hampshire Official Oppression law, which prohibits the misuse of public office for personal gain.

Wagner did not have a federal firearms license but used a close friend, who owns a New Hampshire gun shop, to sell several rifles online.

Wagner at one point ordered a Salem police officer to "pick up a rifle" for him at SIG Sauer, raising concerns he was using a straw buyer to purchase a firearm.

By April 2019, the investigators determined that the gun sales were outside the five-year statute of limitations. That's when they brought in the IRS to look at possible tax crimes, which have a longer limitation period. A federal grand jury indicted Wagner on the tax charge in 2020.

According to the judge's order, Wagner's gun sales were no secret at the police department, and they did not sit well with some Salem police officers. Three officers told Town Manager Christopher Dillon about their concerns, and Sgt. Chad Clark complained about them at a union meeting.

In February 2018, Dillon launched the Kroll audit, which addressed numerous issues at the department, including insubordination to town hall, discouraging citizen complaints, intimidation of civilians, and racist and sexist posts in social media.

The Kroll audit formed the basis for the New Hampshire Attorney General investigation into the Salem police, but it did not mention the gun sales.

But it mentioned two other matters involving Wagner. One is his purchase and resale of a Salem police cruiser, something he refused to discuss with a Kroll auditor. The other is Wagner's removal of internal affairs files from the Salem police offices once the Kroll report landed on the desk of an Attorney General investigator.

No charges are expected to come on those matters. Last year, the state Attorney General's Office announced that its investigation into Salem police was over.

The multiple-year effort resulted in one successful prosecution — a speeding violation against Sgt. Michael Verrocchi. Officials said they didn't have enough evidence to bring charges against the two highest targets of their investigation — former Police Chief Paul Donovan and Deputy Chief Robert Morin.

Barbadoro's order addressed an effort to have the tax charge dismissed.

Wagner's lawyers argued that statements made by Wagner to Kroll investigators could be used against him at trial. And lawyer said and the case should be thrown out because authorities wouldn't have known about any misdeeds were it not for statements Wagner made during the Kroll investigation.

Barbadoro rejected their arguments. Wagner's statements to Kroll can't be used at trial, the judge said. But their value was minimal when it comes to the investigation.

"This is a tax fraud case where, once the government obtained the SIG Sauer records through independent means, the rest of its evidence came about from following a paper trail," he wrote.

The case is expected to go to trial in mid-October.