Billings Man Busted with Illegal Sawed-Off Rifle After Domestic Dispute

A Billings man is heading to federal prison after being caught with an unregistered and illegally modified firearm during a domestic dispute last summer.

Caught with an Unregistered Firearm

Derek Joseph Velarde, 37, was sentenced to 63 months in federal prison, followed by three years of supervised release. Velarde had previously pleaded guilty in February 2025 to possessing an unregistered firearm, a serious federal offense.

U.S. District Judge Susan P. Watters handed down the sentence in a case that stems from an incident that took place in July 2024.

Domestic Disturbance Leads to Arrest

According to court documents, Billings Police were called to a home on Florine Drive on July 1, 2024, for a report of a man with a firearm who was involved in a domestic dispute. When officers arrived, witnesses identified the man as Velarde and told police he had fled the scene on foot.

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Police found Velarde nearby a short time later. He was taken into custody and officers recovered a .22 caliber Savage Arms rifle that he had tried to hide in some bushes. A witness confirmed Velarde had the gun with him during the domestic dispute.

Weapon Was Short-Barreled, Not Registered

An ATF agent later examined the firearm and found it had been significantly altered. The rifle’s overall length was just 15 inches, and the barrel was only 7 inches long. Under federal law, that makes it a short-barreled rifle, a weapon that must be registered in the National Firearms Registration and Transfer Record. Velarde’s weapon wasn’t registered, and it was confirmed to be fully operational.

Federal Charges and a Lengthy Sentence

Because the firearm was not properly registered and fell under the category of a short-barreled rifle, Velarde faced federal charges. Assistant U.S. Attorney Kelsey Hendricks prosecuted the case, which was investigated by both the ATF and the Billings Police Department.

Part of a Broader Push for Safer Communities

Velarde’s case falls under the umbrella of Project Safe Neighborhoods (PSN), a nationwide initiative focused on reducing gun violence and making neighborhoods safer. PSN encourages collaboration between local, state, and federal law enforcement as well as community organizations.

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The program’s mission includes building trust in the justice system, supporting violence prevention efforts, and targeting enforcement where it’s most needed. To learn more about PSN and the work being done to prevent gun violence, you can visit Justice.gov/PSN.