"Stolen guns are not the only source and in many cases they're not the predominant source of guns used in crimes," said Treasury Department Undersecretary James Johnson.
Legitimate buyers purchase guns and resell them, at a profit, to criminals. This is known as straw purchasing. Nearly half of the illegal guns end up in the hands of people under 24 years of age.
Said John Magan, Director of the Bureau of Alcohol, Tobacco and Firearms: "Many times the investigation shows that the person with the felony conviction, who cannot have a firearm, is standing right next to the person in the gun store when it's purchased."
The victims of violence want to see changes. "I want something done about the illegal distribution of guns," said Veronica Trott, whose son was shot and killed in New York. "I want lethal weapons to be taken out of the hands of our youths."
The report also found that some few unscrupulous gun dealers sell guns directly to criminals. Other such guns come from gun shows where background checks are not required.
The government investigation has already resulted in the arrests of hundreds of illegal gun traffickers. And it's being credited with a corresponding drop in street crime.