If it was built before they started classifying full auto parts as an NFA item then it probably was built with M16 parts. Weapons manufactured with the parts prior were exempt, however it's a catch 22. The parts can be in it but if you use soft primers it will fire full auto when the selector is in the full auto position. I'm willing to bet that is what happened.
USAF Retired, CATM, SC CWP, NH NR CWP, NRA Benefactor
To preserve liberty, it is essential that the whole body of people always possess arms, and be taught alike, especially when young, how to use them... -- Richard Henry Lee, 1787