That's my understanding too. They were given an offer they couldn't refuse.
Technically not true.
They NICS checked the straw purchasers and got a "go" from NICS, but even went so far as to say to their local ATF agent "these guys sure feel like straw buyers, you sure your system is working right? We don't think we want to sell to these guys."
ATF said, "Don't worry about it, we're tailing these guys and can account for all of these weapons. Keep on selling to them, you're helping us out."