http://www.ticklethewire.com/wp-cont...as-shipley.pdf
This is a copy of the indictment. The problem is not that he talked to police, the problem is he lied. According to the indictment, he sold over $118,000 worth of firearms. You are allowed to "occassionally" sell a firearm without an FFL, including from a personal collection. According to the indictment, he went way beyond that.
As everyone who has ever purchased a firearm knows, you have to fill out an ATF 4473 when you buy it stating you are the purchaser of the weapon and it does belong to you. Apparently, he falsified several of these, making actual straw purchases for third parties, with the full intent of purchasing the weapons and immediately transferring them to a third party.
He also got in trouble by conducting actual interstate transactions over the internet. You cannot do this without going through a FFL holder. This guy was a federal law enforcement agent. He knew the rules and thought he could use his position to circumvent them for a profit.
IMHO, this guy is not the victim of some "entrapment" ploy, he is someone who thought he could abuse his position as an FBI agent to supplement his retirement.