While lying on the form would be a felony, he hadn't fill out the form at that point.
Conspiring to skirt the law like this is prosecutable as you pointed out, but the dealer has not only refused to conspire but has fulfilled his obligation to refuse the transfer. Which I'm betting was the real intention; bust an FFL in a high profile mess of silliness in order to get traction to further his agenda and add to his 15 minutes.
I think this was meant partly as a tit-for-tat retaliation for that NBC reporter (Dave Gregory). And it fell through. As if his fate was "sealed" LOL.
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