Unravelling a weapons web of Jekyll and Hyde

His lawyers contend he is a model citizen. And as a successful businessman, Gary Hyde certainly exudes an aura of respectability. For years the 41-year-old father-of-two was a volunteer police officer in his northern England home town of York until a serious injury forced him to retire.

"He is an upstanding and respected member of that community," his lawyers argued.

But now another picture of Hyde is emerging.

A man who had turned his enthusiasm for guns and military memorabilia into a thriving business as Britain's very own lord of war; an international arms dealer, whose chief currency is the AK-47 assault rifle.

Under investigation in two continents for his role in deals involving huge shipments of arms, stretching from Britain and the Balkans to Iraq and China, Hyde's activities have triggered calls from a leading human rights group for governments to tighten the licensing of arms dealers, the shadowy middlemen who broker multi-million-dollar deals through a multitude of companies.

Hyde was arrested last month in Nevada at Shot - the US gun industry's annual jamboree that this year was attended by a record 60,000 enthusiasts and 1600 exhibitors. US officials arrested Hyde in connection with the alleged illegal import into the US of almost 6000 Chinese-produced AK-47 magazines, each capable of holding up to 75 rounds of ammunition.

The US authorities contend that Hyde, German arms dealer Karl Kleber and Kent-based businessman Paul Restorick, tried to pass off the magazines as made in Bulgaria to get past a US arms embargo on weapons produced in China.

Kleber, 61, has already signed a plea bargain. Hyde's application to return to Britain while he awaits trial has been refused by a US judge.

Released from prison on bail, he has been forced to put up his house as surety, surrender his passport and wear an electronic tag.

His lawyers say he denies the charges and that the case against him is weak.

Intriguingly, however, the US case reveals that Hyde may have many more questions to answer than those simply relating to importing AK-47 magazines.

Federal prosecutors revealed in court that Hyde also faces criminal allegations in England relating to the sale of 40,000 AK-47s.

Prosecution documents also reveal that British customs "initiated an investigation of Gary Hyde in 2007" and searched his home and the premises of two of his arms dealerships: Jago Ltd and York Guns.

What is irrefutable is that Hyde is a man who likes to deal in large quantities of AK-47s, the most popular assault rifle in the world.

Companies linked to Hyde, who according to his defence documents regularly does business with the British Ministry of Defence (MoD), legally imported 78,000 AK-47s from Bosnia to an armoury in Nottingham in 2005. It was a major coup for the man who joined York Guns in 1985 straight from school.

Friends recall that he would buy the odd rifle or pistol from Kleber. But as the two men built a business relationship, Hyde developed an appetite for large deals. Recently released confidential US embassy cables revealed that in 2008 York Guns tried to ship 130,000 AK-47s to Libya.

The memo, obtained by WikiLeaks, reveals the company was acting as the intermediary between an unidentified Ukrainian arms manufacturer and Libyan officials.

The size of the deal raised eyebrows in diplomatic circles, as Libya has only 70,000 ground-force troops and these would be unlikely to use a weapon as dated as the AK-47.

The cable noted that the export licence was rejected because the "The UK is concerned the intention may be to re-export the weapons, particularly to armed rebel factions backed by Khartoum and/or Ndjamena in the Chad/Sudan conflict".

It has also emerged in the US case against Hyde that in 2008 the German federal police agency, the BKA, launched an investigation into Kleber to determine whether he had been involved in "the illegal sale of machine guns via Croatia to Iraq". This was in response to allegations that companies linked to Hyde had sold tens of thousands of guns to Ziad Cattan, the former head of military procurement at the Iraq Defence Ministry, without an appropriate arms brokering licence.

Cattan fled Iraq after a warrant was issued for his arrest amid allegations that he had siphoned off millions of dollars in corrupt deals.

Amnesty International expressed concerns that many of the guns shipped to Iraq disappeared after delivery. The Italian newspaper Corriere della Sera alleged that Italian-made Beretta pistols, exported legally from a UK company not linked to Hyde, found their way into the hands of al-Qaeda.

Campaigners said the fiasco highlighted the need for a comprehensive overhaul of the military's relationship with private arms brokers.

Amnesty wants the UK government to agree to concrete rules that it will not authorise weapons shipments where there is a substantial risk they will fuel human rights violations, armed conflict, crime, terrorism, poverty or corruption.

This policy could take form next month when governments meet in New York to negotiate a new UN arms treaty. A draft is expected by 2012.

"Negotiations for an international arms trade treaty are at a crucial stage," said Oliver Sprague from Amnesty. "If they go well, we could get a treaty that stops arms brokers and gunrunners selling weapons to human rights abusers. If they go badly, people will continue to exploit legal loopholes and get rich by fuelling armed violence."

Gary Hyde's lawyers say

He is an upstanding member of the community.

Amnesty International's Oliver Sprague says

It's a deeply alarming case that demonstrates yet again why arms brokering, small arms and ammunition trafficking must be at the heart of efforts to secure a new global arms trade treaty.

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