No one else was injured.
The 25-year-old suspect, Raymond Martinez of the Bronx, and his brother were trying to dupe tourists into buying CDs near Broadway and 44th Street just before noon when he was recognized by a sergeant who runs a task force that monitors aggressive panhandling, Police Commissioner Raymond Kelly said.
The officer, Sgt. Christopher Newsom, asked them for their tax identification, which allows peddlers to sell on the streets. But Martinez took off running, through to the Marriott Marquis hotel's passenger drop-off area.
Newsom pursued, and Martinez turned and fired with a Mac-10 9mm machine pistol that held 30 rounds; he got off two shots before it jammed, police said. The officer fired four times, striking the suspect in the chest and arms and killing him, Kelly said.
Martinez's brother Oliver returned to the family's Bronx home Thursday evening after hours in police custody, pushing past two uniformed officers inside, crying out that he hates police: "They shot my brother!" he said.
The commissioner said the shooting preliminarily appeared to be within department guidelines, which allow for deadly force when an officer's life is threatened.
Police say the Martinez brothers were working a scam in which they would approach tourists, ask them their names, then write the names on the CDs and demand payment of $10. They claim the CDs are original work they've created, but it's unclear if that's true. They had already been given a summons by officers this year for not having identification.
Martinez's cousin Nailean Arzu said the slain man had been selling CDs in the area for years.
"He was my cousin. He was loved. Everybody loved him. It's a great loss to the family," she said.
The hotel is located in the Broadway theater district in the heart of Times Square. The Marquis Theatre, where "White Christmas" is now playing, is in the hotel. Bullets from the gunfight shattered the window of the Broadway Baby gift shop and a side window of the box office on the street, police said.
Dave Kinahan, a tourist from Boston, was parking his car in a spot below street level at the hotel when he saw one man shooting another.
"I was 20 yards away," Kinahan said. He said he thought, "Is this real or this a movie?"
Raymond Martinez had been wanted for assault in the Bronx. The gun he used in the shooting was reported stolen in Richmond, Va., on Oct. 28, police said.
He also had with him several business cards from gun dealers there, but it's not clear if he was also selling weapons, police said.
One of the cards had a handwritten message on the back: "I just finished watching 'The Last Dragon.' I feel sorry for a cop if he think I'm getting into his paddy wagon," according to police. It's unclear who wrote the message, which apparently references the 1985 martial arts movie.
NYPD spokesman Paul Browne said officers pay special attention to scams and panhandling during the holidays. Specialized units are set up in areas, including Times Square and Canal Street, where stolen goods, knockoffs and scams are prevalent.
"We focus on them this time of the year, because they're preying on tourists during the Christmas holidays," Browne said.
NYPD Capt. Edward Winski of the Midtown precinct, where the shooting occurred, said arrests involving sellers on the streets have increased in the past few years. So far this year, there have been more than 400 arrests involving illegal and licensed peddlers around Times Square.
But some say peddlers get a bad rap.
"I think they get treated tougher than they actually are," said Zach McCabe, a comedian who has been passing out fliers for his shows for nearly a year on the strip of Broadway where the CD peddlers often stop tourists.
He said he didn't think the vendors harass people. "I don't see it. I see them talking to people."
A few hours after the shooting, the area had returned to the normal holiday bustle, even as dozens of police officers surrounded the hotel.
Donna Anderson of Murray, Utah, was staying at the Marquis. She was intrigued by what happened — not scared.
"I wanted to get a picture of the crime scene," she said.
I ran into a bunch of guys trying this a couple of years ago (loled and walked away when they asked me to pay for that bullshit), so I can't help but wonder if it was the same people. Of course I don't want peddlers to get hurt, but they definitely are a harrassment by using deception. Also fuck you Donna Anderson: this isn't Law & Order, you privileged twat.