For anyone interested here is the actual statute (HR 4827, Law #106-547) I'm not a lawyer but it seems the statute is clearly stating that if you can mount a defense under the conditions outlined, you don't have anything to worry about legally (you could be charged but not likely convicted). If a federal law enforcement agent finds FBI or DEA badges being used in a photo shoot or movie, as part of a collection hanging on your wall, etc. they are not going to arrest you knowing you can mount a successful defense in federal court. State and local laws are anybody's guess. I need a DEA badge for a photo shoot, and after actually reading the statute I'd be a little more comfortable about ordering one. I see a whole lot of wiggle room in this law.
‘‘§ 716. Police badges
‘‘(a) Whoever—
‘‘(1) knowingly transfers, transports, or receives, in inter*
state or foreign commerce, a counterfeit police badge;
‘‘(2) knowingly transfers, in interstate or foreign commerce,a genuine police badge to an individual, knowing that suchindividual is not authorized to possess it under the law ofthe place in which the badge is the official badge of the police;‘‘(3) knowingly receives a genuine police badge in a transfer
prohibited by paragraph (2); or
‘‘(4) being a person not authorized to possess a genuine
police badge under the law of the place in which the badgeis the official badge of the police, knowingly transports thatbadge in interstate or foreign commerce,
shall be fined under this title or imprisoned not more than 6months, or both.
‘‘(b) It is a defense to a prosecution under this section thatthe badge is used or is intended to be used exclusively—
‘‘(1) as a memento, or in a collection or exhibit;
‘‘(2) for decorative purposes;
‘‘(3) for a dramatic presentation, such as a theatrical, film,
or television production; or
‘‘(4) for any other recreational purpose.
‘‘(c) As used in this section—
‘‘(1) the term ‘genuine police badge’ means an official badge
issued by public authority to identify an individual as a lawenforcement officer having police powers; and
‘‘(2) the term ‘counterfeit police badge’ means an item thatso resembles a police badge that it would deceive an ordinaryindividual into believing it was a genuine police badge.’’.