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NEW YORK – A machine pistol used by a street hustler and aspiring rapper shot dead in a Times Square gunfight was purchased from a Virginia gun shop by a woman who reported it stolen 10 days after she bought it, authorities said.

Raymond Martinez, who wrote songs about staring down cops inTimes Square and hawked CDs to tourists, was carrying a stolen Mac-10 pistol and a pocketful of business cards from Virginia gun dealers — including the one where the gun was purchased — when he was killed by a plainclothes officer near the Marriott Marquis hotel, police said. The handgun, which held 30 rounds, jammed after Martinez got off three shots.

Jordan Kelsey-Stewart, 25, bought the weapon Oct. 18 from Dale’s Guns in Powhatan, Va., chief NYPD police spokesman Paul Browne said Friday. Officials with Bureau of Alcohol, Tobacco, Firearms and Explosives are trying to find her and are investigating whether she had any connection to Martinez; a telephone listing for her could not immediately be found on Friday.

Police said Kelsey-Stewart reported the gun stolen from her car Oct. 28 in Richmond, Va. It was unclear how Martinez obtained it, and there was some evidence he owned it for only a brief period of time — weeks at most and perhaps just days.

Investigators also were trying to determine whether Martinez had other weapons. They said they found a .22-caliber handgun during a police search of Martinez’s home on Friday.

“We’re actively investigating whether he was involved in purchasing firearms,” Browne said.

Dale Blankenship, who owns Dale’s Guns, said he provided the information about who bought the gun to the ATF earlier Friday. He said Kelsey-Stewart was from the Richmond area, had all the proper identification and passed a background check when she purchased the weapon.

Blankenship said she bought the gun by herself. He didn’t know what happened to the gun after he sold it.

“I have no idea,” he told The Associated Press. “I don’t know how the gun was stolen.”

Martinez, 25, went by the rap name “Ready” and regularly sold CDs for his group, Square Free, in Times Square. He was part of a freelance collection of hawkers who sell self-produced wares on the street.

Police said Martinez ran a scam in which he would autograph a CD or put a passerby’s name on it, and then demand payment of $10. He had been arrested June 19 at 1515 Broadway, the exact same location where Thursday’s confrontation started, for not having a tax stamp, which allows hawkers to sell their self-produced wares.

Vendors selling their own work are protected by the First Amendment and fall outside the stricter regulation of vendors selling retail goods.

The sheer number of vendors in Times Square and their aggressiveness lead to frequent confrontations with authorities trying to catch counterfeiters and protect tourists from scams.

Martinez and his brother are well known to regular Times Square denizens and videos of them rapping and getting hassled by police are posted on YouTube. In one shaky video, Martinez shouts, “They ain’t taking me nowhere!” and “I’m ready to lay some down!” as officers, their hands in their pockets, escort him from the area. His lyrics talk of hawking CDs and staring down cops.

Sgt. Christopher Newsom usually works in uniform on a task force that tracks aggressive peddling. He was in plainclothes when he stopped Martinez on Thursday and asked him for his tax stamp, setting off the chase and shootout.

Josiah Deandrea, who was distributing fliers Friday to a comedy act a block from the shooting scene, said he had seen Martinez in the area in the past.

“Nobody had any idea he had a gun,” Deandrea said.

Daniel O’Phalen, 24, who passes out fliers in Times Square for the musical “White Christmas,” said Martinez was part of a regular crew of CD salesmen. Sometimes, he said, the group would order him off a corner, saying he was on their territory.

“They’re pushy. They’re not nice guys,” he said.

Still, it’s rare that police encounters with peddlers escalate to gunfire.

“These are usually quality-of-life violations, and they typically do not escalate, they don’t involve violators being armed,” Browne said.

If Martinez had recently gone looking for a gun, it wouldn’t have been unusual for him to look out of state.

Because buying a firearm is so difficult in New York, people barred from owning pistols here often travel south to shop at gun shows where there are no required background checks for people buying secondhand weapons. Martinez didn’t have a license to own a firearm.

There is also a steady supply of guns purchased at southern gun shops and smuggled north.

Mayor Michael Bloomberg has been a fierce critic of gun stores with a record of selling weapons that later wound up in the hands of criminals, suing several of them in recent years for reckless conduct and driving several out of business.

“This is one of the great public health threats. And our police officers are clearly in danger,” the mayor said Friday.

The machine pistol like the type used Thursday are rare in the city: only 26 have been recovered so far this year, compared with 5,427 other guns. In 2008, there were 46 recovered, and 5,959 other guns.

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UPDATE 12/11/09 8:40

NEW YORK — Raymond Martinez was running a common scam on the throngs of holiday tourists in Times Square, pushing shoppers to buy his CDs, police said. But Martinez was no ordinary peddler, they said: He was carrying a loaded pistol and had a handful of business cards from gun dealers in his pockets.

The 25-year-old was shot to death by a plainclothes police sergeant Thursday after trading gunfire in the taxi area of the landmark Marriott Marquis hotel.

Sgt. Christopher Newsom operates a task force that monitors aggressive panhandling and was patrolling with an anti-crime unit when he recognized Martinez and his brother from past run-ins. He asked the two for their tax stamps, which allow peddlers to sell on the streets. But Martinez took off running, through to the hotel’s passenger drop-off area.

Newsom pursued, and Martinez turned and fired with a machine pistol that held 30 rounds, getting off two shots before it jammed, police said. The officer fired four times, striking Martinez in the chest and arms and killing him, police Commissioner Raymond Kelly said.

“We’re lucky the weapon jammed,” Kelly said.

Martinez’s brother Oliver returned to the family’s Bronx home Thursday evening after hours in police custody. Another brother, Anthony, arrived at the home later Thursday, crying out that he hates police: “They shot my brother!” he said, hugging Oliver.

Investigators are trying to determine whether Raymond Martinez was selling illegal weapons. They say the gun he used in the shooting was reported stolen in Richmond, Va., on Oct. 28.

Police say they also found four business cards linked to Virginia gun dealers near Richmond, in Hampton Roads and in Ivor. All the gun shops declined to comment.

One of the cards had a handwritten message on the back: “I just finished watching ‘The Last Dragon.’ I feel sorry for a cop if he think I’m getting into his paddy wagon,” according to police. It’s unclear who wrote the message, apparently referencing the 1985 martial arts movie.

Police say it’s not uncommon that some hawkers are also arrested on more serious charges. Police Capt. Edward Winski, of the Midtown precinct where the shooting occurred, said there have been more than 400 arrests involving illegal and licensed peddlers this year and illegal activity has been increasing.

Citywide, there are 853 licensed street vendors, but veterans are qualified to have licenses beyond the cap, so the actual number is more than 2,500. Vendors of their own material — music, art or anything else that is protected speech — are not required to have licenses so there is no official tally. They are required to have tax stamps, which aren’t tracked by the city.

Police said the Martinez brothers fell into the latter category but had been cited previously for not having their stamps. They were also suspected of running a scam in which they’d ask the name of someone, write it on a CD and then demand payment of $10. But their cousin Nailean Arzu said the slain man had been lawfully selling CDs for years.

“Everybody loved him,” she said. “It’s a great loss to the family.”

Police spokesman Paul Browne said officers pay special attention to scams and panhandling during the holidays. Specialized units are set up in areas, including Times Square and Canal Street, where stolen goods, knockoffs and scams are prevalent.

“We focus on them this time of the year, because they’re preying on tourists during the Christmas holidays,” Browne said.

Others say the peddlers get a bad rap.

“I think they get treated tougher than they actually are,” said Zach McCabe, a comedian who has been passing out fliers for his shows for nearly a year on the strip of Broadway where the CD peddlers often stop tourists.

He said he didn’t think the vendors harass people.

The hotel where the shooting took place is located in the Broadway theater district in the heart of Times Square. The Marquis Theatre, where “White Christmas” is playing, is in the hotel. Bullets from the gunfight shattered the window of the Broadway Baby gift shop and a side window of the box office on the street.

The police commissioner said the shooting preliminarily appeared to be within department guidelines, which allow for deadly force when an officer’s life is threatened.

Hours after the shooting, the area had returned to the normal holiday bustle, even as police officers surrounded the hotel.

Donna Anderson, of Murray, Utah, was staying at the Marquis. She was intrigued by what happened — not scared.

“I wanted to get a picture of the crime scene,” she said.

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12/10/09 2:28

NEW YORK — A panhandler opened fire on police in busy Times Square on Thursday afternoon and was shot and killed by an officer near the famed Marriott Marquis hotel, police said.

No one else was injured. The 25-year-old suspect was recognized by a plainclothes sergeant on a task force that monitors aggressive panhandling, and took off running through to the hotel’s passenger drop-off area, chief NYPD spokesman Paul Browne said.

At some point, the man turned and opened fire on the officer, continued running, then turned and fired again, Browne said. The plainclothes officer returned fire, killing the suspect, Browne said.

Dave Kinmahan, a tourist from Boston, was parking his car in a spot below street level at the hotel when he saw one man shooting another.

“I was 20 yards away,” Kinmahan said. He said he thought, “is this real or this a movie?”

The hotel is located in the Broadway theater district and near the heart of Times Square. The area includes the Minskoff Theatre, home to the popular show “The Lion King,” and bullets hit the theater ticket box near the Marquis, cracking the window.

It’s not clear how many shots were fired. Browne described the suspect’s gun, which was recovered, as a pistol with a long clip.

Dozens of police officers surrounded the popular hotel, taping off the valet parking area as tourists and holiday shoppers stopped to watch the commotion.

Kathleen Duffy, a spokeswoman for New York City Marriott Hotels, said the shooting took place in a taxi pickup and drop-off area. Duffy said the shooting didn’t involve any guests or hotel employees.

Duncan Stewart, a Broadway casting director for National Artists Management Co., has a 12th-floor office that overlooks Times Square. He said he was on the phone when he heard three loud pops.

“With the echo, I didn’t quite know what it was, but within five minutes, there were cars, police sirens, cops running,” he said. “It was chaotic.”

Stewart has worked in Times Square for the past three years. He’s gotten used to seeing the weird and wacky, but almost never anything violent.

“It’s bizarre. It’s one thing to see the Naked Cowboy day after day in Times Square, but a shooting is something different altogether,” he said.

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