The AR-15 had been illegally converted without changing the exterior appearance. As a convicted felon, Mr. Steward is banned for life from possessing firearms of any sort. That search produced a number of firearms, including several machine guns. It is the BATF's position that Mr. Steward's conviction means that his wife is also banned from owning firearms if they are kept in the home. I have no personal knowledge of any of these events.
Criminals can be creative.
Whether Mr. Steward's sole felony happened as described, I do not know. Given the record of BATF and some of their documented entrapment schemes, such an incident is not beyond the scope of credibility. I was always taught that the issue involved in governmental action was legality v. illegality, not right v. wrong. A deduction is either legal or illegal. Laws are always written as compromises and the so-called loopholes' are left in place so the law can be passed.