In the second day of testimony, Jose Roman, an admitted drug and gun smuggler for the Juarez drug cartel, took the stand.
Roman is the one who implicated the Reese family after he was arrested in January 2011 accused of smuggling drugs from Mexico.
Homeland Security agents said after Roman's arrest, he volunteered to cooperate with investigators. Agents said he then told them he had been smuggling guns into Mexico that he had purchased from the Reese family's Deming store, New Deal Shooting Sports.
In court Thursday, Roman said he had been purchasing ammo from New Deal for about five years before he started smuggling guns for the cartel. He said he felt comfortable purchasing firearms and ammo from the Reese family because he had known them for several years.
Roman said he hired Penny Torres to purchase guns on his behalf so he could smuggle them to La Linea, the enforcement branch of the Juarez drug cartel. He said he did not want his name associated with the firearms.
"I told her everything was OK. Everything was set up. So, we went to New Deal and I chose the AK-47s. She signed the paperwork. I took the guns to Mexico," Roman said on the stand.
Roman said he mostly dealt with Ryin Reese when he purchased from the store.
"I told Ryin (Reese) the weapons were for me, and they were going to Mexico and everything was going to be OK because the police in Mexico were paid off," Roman said.
Roman admitted to going to New Deal with Torres three times to purchase firearms.
Eventually, Terri Reese reported Torres as a suspicious purchaser, which started an investigation into Torres.
"I was in Mexico and I received a message. It was Terri (Reese) and she told me to go to the store. I went to the store and Terri told me two agents went to the store and talked to them because they found some of the rifles in Mexico. She told me not to bring Penny Torres to the store anymore," Roman said.
The defense argued that Terri Reese did everything she was supposed to do by reporting Torres and providing all the information requested of her by the Bureau of Alcohol, Tobacco and Firearms.
Roman was arrested after investigators received intel that he was going to leave the country.
After he pointed a finger at the Reese family, Homeland Security Special Agent Eddie Solis-Pacheco admitted he was skeptical of Roman's information but felt the allegations were serious enough to be investigated.
Pacheco took the stand on Wednesday. He said Homeland Security agents recorded two or three phone calls from Roman to the New Deal store.
In the audio recording from a phone call in February 2011, Ryin Reese is heard greeting Roman casually saying, "Hey, what's going on?"
Roman replies, "Same old, same old. Looking for AKs. How many do you have?"
Roman later asks, "Are you willing to give me a discount?"
Ryin Reese replies, "Of course."
It was this phone call, along with one or two others, that Pacheco said showed there was a familiar relationship between the Reese family and Roman.
In April 2011, Homeland Security Investigations began a months-long undercover operation looking into the Reese family using Roman as the main undercover agent.
Roman, along with several undercover agents posing as straw purchasers, went into the New Deal store with recording devices to gather direct evidence that his allegations were true.
The prosecution believes these recordings prove the Reese family knew the guns they were selling were being smuggled into Mexico.
The defense has argued the federal government went "all in with a known cartel member."
"Not only did the government believe Mr. Roman. They helped him become a better liar," said defense attorney Brad Hall in his opening statements on Wednesday. "In return, he got the deal. He won't spend the rest of his life in prison."