KnoxNews has this article on the mess. He's got links to the CNS news article about it, and to a Freedom of Information Act response; this from the document:
"The customer would complete the SP-65 and the ATF Federal 4473 in order to purchase the firearm. ATF personnel reviewed their form and determined if the purchaser was located in a certain area of either the City of Richmond or the County of Henrico. ATF personnel would direct either the Richmond PD or Henrico PD Residence Check Team to go by the residence of the individual whose information was contained on the ATF 4473 form to determine if the individual resided at the residence. Upon the completion of the residence check, they would permit the transfer of the firearm or conduct further questions of the perspective purchaser."
As they say, read it all. And hope that charges will be filed against both the federal and local agencies that took part in this. From my understanding, they broke the law. Not 'went to the edge', not 'pushed things a bit'; they broke the law.
Ravenwood and Say Uncle have been covering this as well.
And Showmasters should file civil charges as well. As I said before, there is no excuse for this.