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I’m looking at a NFA purchase. So many scams! How do I find out if this is a legit outfit? M-16

LOL, you first. Tell us how their service works out for you.
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/s means sarcasm
 
It’s a scam. Many ways that have been noted here, but first the product you were buying is half market value. That should be your first indicator. Stick with local gun stores, known machine gun dealers or online like reuben at www.dealernfa.com or davidspiwak.com. Reuben will be a little more expensive, but he is 100% trusted. David Spiwak is also very trusted, but his inventory is much lower.
 
Unfortunately neither Ruben or David have had M16's in quite awhile, although Ruben generally has converted AR-15's.

Scam? If you find a Colt M16 advertised below $40,000 then you can assume it's a scam.

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The OPs example was not an original Colt M16. So I thought he was looking for a conversion. People often say M16 when what they mean is full auto AR 15 conversion. Regardless, if you were gonna find one that should be a couple places to look.
Also a good place to look is Sturmgewehr.
There are some dealers, including Reuben, but also private guys. You just have to do your homework. I’ve bought off here before and been very happy.
 
Just when I thought I didn’t want anything else……
 
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