Who am I kidding? They don't go after real criminals.
I don’t believe it is illegal to build your own firearm so long as you never try to sell it. Selling to cops in a buy back program is a “no questions asked, immunity granted” transaction, so this may not be a problem.
mamelukesabre is right. You can manufacture your own firearm as long as you never transfer it to another person.
Funny thing is they aren't criminals.
And even if the ATF did try to bust them, it is *highly* likely that they would be easily shot-down, not only could they use the reasoning found in Rock Island Armory v. US, but they could also include a 10th Amd challenge against it.
Just because something is illegal in one way (the authority of the ATF in this hypothetical) does not preclude it from being illegal in other ways.