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Yeah; the FBI were doing undercover operations with them for 15 months before arresting them. I don't know any more details of the case than the wikipedia article highlights, but surely you'd have enough evidence to arrest people trying to build a death ray at some point prior to 15 months. Maybe our gov't just thought that their innovation was useful and figured they'd wait and see where they went with it.
Why would they pass up free R&D on a potential death ray?
They probably thought a death rate was total bullshit until suddenly it wasn’t