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His hands stuffed into the pockets of a winter coat, Rocky Salazar fingered the snub-nosed .25-caliber pistol he carried like a lucky stone.

A 15-year-old soldier in the Satan Disciples street gang, Salazar was standing on West Chicago Avenue one February evening last year when a fellow Wells High School student happened to walk past.

The boy “gave me a bad look,” Salazar later explained to police, and so he shouted a gang slogan and fired once, sending a slug into the back of 19-year-old Rosalio Jiminez and wounding him severely. Salazar was arrested and charged in Juvenile Court with aggravated battery and unlawful use of a weapon.

There were three unusual things about Salazar’s gun.

He had neglected to obliterate the serial number on its blue steel casing.

Police happened to recover the weapon.

And federal agents decided to trace it.

Their search led to a ranch-style home on a prosperous, tree-lined street in Highland, Ind., where entrepreneur James Board sold firearms from a converted family den.

Its wide front lawn bedecked with bright flowers and a stone angel, Board’s home served as a crucial link in the underground pipeline through which hundreds of guns flowed daily onto Chicago’s streets and into the hands of gang members like Salazar.

During one nine-month period in 1991, the cherubic Hoosier illegally distributed more than 800 low-caliber semiautomatic pistols to Chicago gangs, federal records show.

This is the story of how one gang got its guns.

Told in state and federal court records, as well as interviews with the participants, it is a tale of lax federal inspections, ineffective gun registration laws and the mayhem that results on the streets.

Federal officials say it is in many ways typical: Board was not a devious career criminal who figured out new ways to cheat the system, but one of many licensed gun salesmen who discovered the quick profits that can be made in America’s unsupervised and scantly regulated arms market. Methods like his are being reproduced in home-grown weapons shops across the country, enabling gangs to procure low-caliber semiautomatic handguns by the crateload.

“In the old days, the majority of guns used by felons may have been stolen in burglaries of homes or gun shops, but those days are long gone,” said Assistant U.S. Atty. Stephen Sinnott, who supervises the prosecution of illegal gun deals in Chicago.

Today’s gangs get most of their guns the way Salazar got his, using strawman purchasers and licensed but unscrupulous dealers. In its 2,000-mile journey from a Mira Loma, Calif., foundry to Chicago’s chilly, asphalt killing fields, the weapon was shipped to Board’s home and, from there, passed into the hands of a loose network of gang members and outsiders who help them.

Among them was Manuel Robles, a shaggy-haired foreman at a Southwest Side shower door factory. Acting as the middleman, Robles ordered bulk quantities of pistols from Board and stored them in the back of a co-worker’s van, according to records and interviews.

A fellow factory worker introduced Robles to gang lieutenant Juan “Lil’ Player” Alvarez, 21. Alvarez, his body stitched with black pitchfork tattoos, dispensed the weapons to the street.

“I was just the delivery man,” Alvarez said in an interview. “I would drive up certain streets and certain people would be in a car and I would drop (the guns) off and that was it. I made $100 if anything each time.”

To date, about 60 of Board’s guns have been confiscated by Chicago police from murder suspects, drug dealers and gang members. As for the hundreds of others Board sold illegally, “the repercussions of these weapons will be felt on the streets for a long time to come,” said U.S. Bureau of Alcohol, Tobacco and Firearms spokesman Jerry Singer.

In a coffee shop in Michigan City, Ind., James Board took deep drags from a low-tar cigarette and fiddled with his tawny mustache.

An unemployed, 37-year-old truck driver with a wife and two children, Board began dealing guns in 1988 because “it was an easy business to get started in. There’s not a lot of upfront costs,” he said.

Board’s only previous arrest was in 1981, for speeding. “I didn’t know anything about gangs,” said Board, a lifelong resident of Highland.

“I was basically looking for a business I could do out of the house so I could help raise the kids,” he said.

After paying a $30 application fee and waiting 45 days for federal bureaucrats to determine that he had no felony convictions or mental illness, Board became one of America’s 287,000 federally licensed firearms dealers and manufacturers. He was free to order unlimited amounts of guns without background checks or waiting periods. The license allowed him to sell nearly any kind of gun to any adult who swore he or she had no criminal record.

About three-quarters of the dealers work out of their homes, like Board, federal records show, and fewer than 1 in 10 is visited annually by one of ATF’s 220 inspectors.

Board had been selling guns for two years before he was first inspected in 1990. Crammed in a cardboard box, the few receipts he bothered to keep were in shambles, federal reports show. Board nervously explained to inspectors that he had in some cases mislaid invoices and in others merely forgotten to complete federally required gun-selling forms, according to a 21-page agent’s report.

But because it was his first inspection, Board was not punished. Instead, he was given an easy-to-read, government-published handbook on “The Cans and Can’ts of the Gun Control Act,” and allowed to continue selling.

Documents seized in a later search warrant revealed that at the time he was illegally selling about 100 guns a month. Those sales were never recorded by Board, as federal rules require.

Agents had no way of knowing about the sales because, unlike automobile and land titles, gun sales records by law are not computerized or kept by a central government agency. Instead, each dealer keeps records separately in his or her own shop. Gun lobbyists have blocked laws that would create a central registry of guns by invoking the deep-rooted fear that if officials knew to whom the weapons were sold, they could more easily seize them.

As a consequence, such federal inspections rarely turn up evidence of under-the-table dealing, officials say. In 1992, for example, only 24 licenses were revoked, while 35,562 new licenses were issued.

When he was caught, Board was charged in an Indiana federal court with five counts of failing to keep records of the weapons he sold, as well as related violations. He pleaded guilty to one count involving a 26-gun sale and served 16 months in prison. He was released in September.

Described in case agents’ reports and court records, his illegal sales entailed a frenetic minuet of long-distance phone calls, highway travel and old-fashioned elbow grease.

It is not clear how Robles found his way to Board, but it is not difficult to find a gun shop. There’s a crowded market of dealers who advertise in sporting magazines, pass out their business cards at county gun shows and list their phone numbers in the Yellow Pages under GUNS & GUNSMITHS.

Most of Board’s customers were police officers and collectors who bought one or two expensive, high-caliber pistols at a time.

“No cheap junk,” Board said.

But when Robles arrived, Board said, he tripled his income to about $15,000 a year. “Basically, he seemed like a regular, hard-working Joe. He said he wanted to ship guns down to Mexico. I asked him, `Is everything on the up and up?’ and he said, `Yeah.’ I took his word for it.”

By 1991, Robles was placing near-weekly orders for .25-caliber semiautomatic pistols, asking for “the little ones,” according to government reports and transcripts of taped phone conversations.

Board would then get on the phone himself, calling among wholesalers to determine the lowest price. In one typical transaction, Board paid Wisconsin and Michigan wholesalers about $35 each for 70 pocket-size semiautomatics, selecting Lorcin L25 models like the one Salazar used.

Advertised in glossy sporting magazines as “Our number one selling lady’s gun,” the L25 features a “comfort zone grip that fits snug in your palm.”

Cops call it a “gut gun” because it is sure to be effective only when fired at close range and against soft flesh. More than 10,000 were made last year.

“We have no way of telling from the license if he is a one-man operation or has 500 employees, so we have no reason to be suspicious,” said Michael Saporito, senior vice president of R.S.R. Wholesale Guns Inc. of Winter Garden, Fla., whose Midwest subsidiary shipped 40 of the 70 guns.

“It is not unusual to see orders for 20 or 30 Lorcins. These firearms sell fast,” Saporito said. “Price has a lot to do with it,” and also, “they’re fairly concealable.”

Board offered the weapons to Robles for $50 each. When Robles agreed on the price, Board had the wholesalers send the guns to a Hammond UPS station, where they were held for cash on delivery.

Board said he rarely stocked guns in the house because he did not want his 9-year-old son and 5-year-old daughter to find them.

Instead, he drove to Chicago and got $3,500 cash from Robles. Then he drove back to Hammond and paid for the guns, doubled back to Chicago and placed the boxload of guns in the back of a waiting van in the parking lot of Robles’ factory.

Board prided himself on such service.

In one transaction watched by federal agents, Alvarez pulled up next to the van in a red and black-trimmed Blazer and picked up 23 pistols in a box marked “auto parts.”

Alvarez, who admitted that he was “deep into” the hierarchy of the Satan Disciples, had a criminal record dating to 1988, when he was caught at Juarez High School with a .25-caliber Raven semiautomatic in his coat pocket. He was expelled and sentenced to 18 months’ probation for that crime. He was arrested 15 more times in the next four years, court records show. His most recent arrest was in July for carrying two “wicki sticks”-cigarettes laced with animal tranquilizer and dipped in embalming fluid. That case is pending.

Alvarez said he did not consider the mayhem the guns caused on the streets.

“What’s happening out there really don’t concern me,” he said. “The only thing I was interested in was the amount of cash I was going to be paid. I was not thinking of whose hands they were in.”

When he was arrested with Board’s guns, Alvarez was charged with both state and federal offenses. He has already served a year in state prison, and in November will begin a 14-month federal sentence.

Robles, who pleaded guilty to federal weapons distribution charges, awaits sentencing.

Asked where the guns went, Robles said, “I had no idea.”

Board’s wife divorced him in December while he was in prison.

“He told me everything was legal and I trusted him and didn’t get involved,” said Lynn Board.

“He’d say, `I’m going out to do some business.’ To him, they were just like widgets or any other piece of merchandise. He figured wherever they went after he sold them was none of his business,” she said.

Federal officials are currently mulling over a host of reforms that will reduce the number of kitchen-table dealers like Board. Proposals include boosting license fees, doubling the number of inspectors and imposing stricter record-keeping requirements on them. America’s current gun-licensing system “encourages a flourishing criminal market in guns,” an Aug. 11 White House memo said.

Today, Board favors a ban on the retail sale of pocket-size pistols, as well as more stringent background checks on dealers and owners. But he stops short of calling for the kind of government-maintained registry of guns that would have allowed inspectors to catch him earlier.

“See, a lot of gun owners are afraid that if the government knew where all the guns were, the government could seize them,” Board said. “If people could trust the government, there wouldn’t be any problem, but they can’t.”