Author’s Note:

Throughout the criminal justice process and when I began my prison sentence, I did not initially
plan to tell my story. The tears of my mother at my sentencing and the realization of the impact of my
choices remained too close to my heart. But later came the inquiries of writers and the entertainment
industry, which ultimately resulted in larger-than-life stories, a best-selling book and now a major
Hollywood movie. The book and movie were based on my preliminary writings, used without my
authority, which were unfortunately expanded and dramatized without consulting me – despite my
offers of aide. Such unauthorized versions of my life story compelled me to respond to set the record
straight despite the pain and realization that resulted in my writing this book. At the beginning of this
process, someone told me an old expression that goes: “When telling your life story, make sure that
you’re the one holding the pen.”

So... now I’m the one holding the pen, even though it forces me to relive such a turbulent chapter of
my life. In a CNN interview, my father expressed his early dreams for me when I was a toddler, that I
would become a doctor or lawyer… and then his shame when I became a gun runner. Now, I journey
forth as an author, not based upon career ambition or fatherly direction, but instead to set the record
straight for my own personal honor. This memoir reflects my present recollections of my experiences
over a period of years.

So, here is my story, the way I remember it.

“Once a gun runner… always a gun runner.”

Efraim Diveroli
PROLOGUE
 THE HOOK
“By age 18, Efraim Diveroli was an international arms dealer. By 21, he had landed a $300 million
contract with the U.S. Army. And by 22, he was in handcuffs.” - Tristram Korten, Details magazine

“Since early last year [the U.S. military has relied] on a fledgling company led by a 22-year-old… to
enter the murky world of international arms dealing on the Pentagon’s behalf.” - CJ Chivers, New
York Times

ON AUGUST 23RD OF 2007, EFRAIM DIVEROLI was standing on

the 29th-floor balcony of his luxury South Beach apartment, staring through
bloodshot eyes at the clear blue waters of the Atlantic Ocean. He was clean-
cut with boyish good looks - handsome by anyone’s standards - dark
features, an athletic frame, five foot ten inches tall. His sensuous girlfriend
was lying in bed, just inside the sliding glass doors; her bare breasts slightly
exposed underneath the silk sheets. They had been out all night snorting
coke and partying at Mansion, a trendy club in South Beach.
He slipped a Parliament between his lips and inhaled. Efraim had
come a long way since entering the international arms business three years
earlier. He had sold over a quarter of a billion dollars in weapons and
munitions to the United States Government and delivered them to countries
such as Iraq, Pakistan, Niger, Colombia, and Germany; he dealt with
international criminals and corrupt government officials, circumvented
international laws - maybe even broke a few - and he was only 21-years-
old.
ACROSS TOWN, roughly two-dozen agents with the Defense
Criminal Investigation Service (DCIS) and U.S. Immigration and Customs
Enforcement (ICE) shoved their way through the office doors of AEY,
Incorporated’s headquarters - Efraim’s defense contracting business -
screaming at the staff, “Put your hands in the air and step away from the
computers!”
The receptionist yelped, “What the hell?” as the Special Agent in
Charge, Michael Mentavlos, a six-foot-tall, lean and muscular military type,
shoved a federal search warrant in her face, and growled, “Don’t touch
anything.”
A MINUTE LATER Efraim’s secretary called his cell phone.
“Efraim,” she whispered, “We’ve got police in the office.” It wasn’t
uncommon for law enforcement to mistakenly show up at AEY, Inc.
thinking it was a retail gun store.
“So tell ‘em to leave.”
“I can’t... they say they’ve got a warrant for...” she glanced around at
an ICE agent packing up a cardboard box of documents, “pretty much
everything.”
“Search warrant?” Efraim didn’t have time to deal with a search
warrant and a bunch of overzealous federal agents; he had just completed a
$51-million contract with the Department of Defense to supply weapons
and ammunition to the Iraq Security Forces, was in the middle of a $298-
million contract to supply munitions to the Afghanistan Security Forces,
and had tens of millions of dollars in other military contracts to deliver on.
“What do you want me to tell them?” she hissed.
Efraim put out his cigarette, reached for the Ketel One and OJ in his
fridge, poured himself a screwdriver, and sighed, “Put ‘em on the phone.”
The warrant wasn’t completely unexpected; Efraim had had his fair share of
run-ins with the U.S. Government, among others. Besides, he hadn’t done
anything wrong - that he knew.
Agent Mentavlos grabbed the phone from the frightened secretary.
“We’re not leaving, Mister Diveroli,” snapped the agent. “You’re gonna
need to come down here.” He slammed down the receiver; the agent had
been investigating Efraim Diveroli for nearly two years on multiple
violations of federal law and the International Trafficking in Arms
Regulations, from exporting weapons and munitions out of over a dozen
Eastern European countries to purchasing weapons from the People’s
Republic of China - but this time they had him.
Diveroli had faced down some of the world’s most corrupt and
merciless arms dealers over the negotiating table, but he had no inkling of
the whirlwind of secrets, lies, and betrayals that his best customer - the U.S.
Government - was about to unleash on him.
Agent Mentavlos stepped into Efraim’s private office, where several
other agents were rummaging through the loose papers on Efraim’s desk,
copying his hard drive, and yanking files out of cabinet drawers. The agent
glared at the glossy movie poster hanging on the wall behind Efraim’s desk,
clenched his jaw and tightened his fingers into white-knuckled fists, while
the actor Nicolas Cage stared back at him through a collage of shell casings
- the Lord of War.
CHAPTER ONE
 FLORIDA’S “GOLD COAST” AND A GOOD JEWISH BOY
“Now you know, and knowing is half the battle.” - G.I. Joe

I WAS RAISED IN “MAYAIMI” Beach - the Tequesta Indian word for

“big water.” It’s a beautiful city. With miles of crisp white Atlantic beaches
lined with glittering glass-walled skyscraper hotels, Miami Beach is dotted
with marinas, yacht clubs, and golf courses - lots of palm trees and piña
coladas. The city’s subtropical climate, museums, and historic Art Deco
buildings make it a year-round vacation destination.
Miami Beach’s ethnic melting pot boasts a diverse Latin community
and the largest Jewish population in the southeastern United States. I grew
up in “Mid Beach,” in a relatively prosperous Jewish community, but my
parents struggled financially. We were lower middle class - at best.
MY PARENTS WERE NEVER MADLY IN LOVE. They married too
young. What should have been a teen starter relationship turned into a
Jewish Orthodox marriage - my mother got pregnant when she was 19-
years-old, and I was the first of five, followed by Aaron, Avigail, Avrohom,
and Yeshaya. By the time my parents realized they didn’t like each other,
they had five kids, and they were struggling. They constantly bickered over
money, trying to make ends meet. I remember lying in bed at night listening
to my father yell at my mother, “If you’re so worried about it, call your
father or brother for the money!”
“But they’re our bills!” she screamed back. I remember telling myself,
I never want to struggle like that. I wouldn’t live like that. They seemed so
miserable.
I would be lying if I said our financial situation didn’t have an effect
on me from an early age. At my fifth birthday party, I sat in front of my
frosted cake stacked with five candles, surrounded by my friends and
family, singing happy birthday. Someone said, “Make a wish!” as I blew out
the tiny flames.
“Efraim,” said my mother, “what did you ask Hashem (God) for?”
 I looked her right in the face and answered, “I asked him to make me a
millionaire.” She rubbed my upper back and gave me a conciliatory grin,
but I wasn’t smiling, and I couldn’t be pacified.
LIVING IN MIAMI BEACH - an affluent Jewish community - only
made the situation worse. We lived in a modest house, just a few short
blocks away from mansions and multimillionaires. Our neighbors had
Bentleys and private jets; they shopped in stores that we couldn’t even
afford to walk into. There was a period of time, when I was seven or eight
years old, that we ate macaroni and cheese or spaghetti virtually every night
for months. Even when it was a special occasion and my father brought the
entire family out for dinner, it was always cheap pizza at the local greasy
spoon - eight slices for seven people and water, no soda. “We can’t afford
it,” was something I heard a lot growing up. There never seemed to be...
enough. That’s what it boils down to, there was never enough.
My mother would tell my brothers and sister that money wasn’t
important, that it didn’t make you happy, but I knew she wasn’t speaking
from experience, and she didn’t seem all that genuine when she said it. The
people living in those mansions didn’t look nearly as miserable as my
parents. The kids at my school were wearing designer clothes, while every
generic garment I owned came off a sales rack at Marshalls or T.J. Maxx.
While my friends were taking lavish vacations, I was working summer jobs
- packing screws and bolts at a relative’s warehouse, stocking shelves and
bagging goods at the local grocery store.
MY FATHER, MICHAEL DIVEROLI, worked odd jobs including
selling scholastic textbooks and encyclopedias to schools. He wasn’t
successful like many of my friends’ fathers; he didn’t have that… drive. He
wasn’t what my uncle Bar Kochba would call “an earner.” My father had an
unhealthy fixation with money - to his detriment. He desperately wanted to
be rich, but he didn’t want to sacrifice or invest enough to get there. That
combination of greed and frugality plagued my father and my family. It
consumed him. But he was my father and I loved him, yet I was also a little
embarrassed by him.
MY FAMILY IS JEWISH ORTHODOX: the branch of Judaism that
believes that God revealed the laws of the Torah (the first five books of the
bible) and the Talmud (the basic laws of Judaism) directly to Moses on
Mount Sinai. They strictly observe all traditional Jewish laws, including the
dietary rules and the laws of keeping the Sabbath: no working on the
Sabbath, no driving, no using the telephone or Internet, and on and on...
everything had to be Kosher, that sort of thing. It’s an extremely restrictive
religious sect of Judaism to follow - especially when you’re living in a
place as free-spirited and party-oriented as Miami Beach.
As a child I was sheltered. I attended Toras Emes Academy, an all-
boys elementary school; for middle school I was forced to attend Toras
Chaim, an all-male academy. I wasn’t even allowed to go to the co-ed
Orthodox Jewish school - Hebrew Academy - that was right down the street
from my parents’ house.
For a long time, I was a good Hebrew student. I wore the tefillin and a
yarmulke - as a sign of respect to God - studied the Torah, the Gemara, and
the Mishnah. I was a true believer - until one day I began to have doubts. I
wanted to believe. No one wants to think they’re going to blink out of
existence and end up worm food someday, yet I had my doubts, and I knew
I couldn’t be what they wanted me to be.
I’m certain my mother would describe me as having been an extremely
rebellious child. “Even as a little boy he was smart,” I’ve heard her say,
“but uncontrollable. If I told Efraim not to do something... he’d go right out
and do it anyway. His father and I couldn’t tell him anything - he wouldn’t
go to Temple, wouldn’t go to school. Punishing him didn’t work - nothing
did.” My parents didn’t like my music, my clothes, or my friends. I was
always in trouble.
DON’T GET ME WRONG, I’M NOT COMPLAINING - I had a
loving family. There were trips to Busch Gardens and Disney World. I had a
great group of friends; we would sneak into the luxurious Miami hotels and
swim in their massive pools, bask on South Beach, and watch the Florida
sun scorching the tourists bright pink. There were lots of sand castles, beach
balls, and bikinis. It wasn’t a bad childhood... I’m just sayin’.
MY UNCLE BAR KOCHBA BOTACH owned Botach Tactical, a
police-supply business. He primarily sold domestic police supplies such as
weapons and ammunition, flashlights and gasmasks. He wasn’t picky; he
would sell to everyone from security guards to federal agencies. Eventually
my mother convinced her brother - my uncle - to hire my father. He opened
a small satellite office of Botach Tactical in Miami Beach - a 150-square-
foot hole in the wall, where my father used my uncle’s established
relationships with manufacturers and distributors to bid on state and federal
contracts to supply first-aid kits and uniforms, stuff like that. Things
seemed to be all right, and my father started making a decent living.
THE FIRST TIME I HELD A GUN - believe it or not - I was ten-
years-old, wandering the aisles of Toys ‘R’ Us. Somewhere between the
stuffed animals and Super Nintendo I spotted an unattended cart with a
small black nylon fanny pack lying in it. My mom was several aisles away
looking at board games or something, and I wandered over to the cart,
checked up and down the aisle - didn’t see anyone - snatched up the bag,
and unzipped it, revealing a pair of chrome-plated handcuffs, two full
magazines, and a loaded Glock 9 mm handgun.
I remember picking it up, feeling the weight of it in my hand... it felt
powerful. I felt powerful. Dangerous. I had never felt that way before.
Standing in an aisle, surrounded by G.I. Joes and Star Wars action figures, I
held out the weapon, using both hands - like I had seen on television - and
pretended to fire the Glock several times. I made the pop, pop, pop, sound
of a gun. And for a second - at ten-years-old - I thought about slipping the
Glock underneath my shirt and into the waistband of my shorts, sneaking
the weapon out of the store and back home. But I was terrified of what my
mom would do to me if she found it. So I placed the handgun and the bag
back in the cart and walked away. I’ve been fascinated with guns ever since.
Minutes later, I was standing with my mother in the checkout lane
when a man, with a shield clipped to his belt, came running into the store;
franticly looking up and down the aisles until he found the cart with his
black nylon bag.
IT WASN’T LONG AFTER THAT VISIT to Toys ‘R’ Us that my
grandfather took me to my first gun show. It wasn’t anything special - not
an expo, just an indoor flea market - but I was transfixed by the weapons.
Most of the vendors displayed their guns in neat rows on their booths’
counters, and some had them arranged haphazardly on folding tables, but all
of the vendors were ready to bargain and make deals.
I knew the names of several weapons from television and movies, and
at the first opportunity I asked one of the vendors, “Can I see a Smith and
Wesson .357, please?” The guy didn’t miss a beat, just looked down at me
and asked if I wanted to see a full-size or a compact model. I didn’t know
the difference, but confidently said, “Full size.”
He turned around and grabbed an unloaded duo-tone revolver with
“.357” stamped on the side and handed it to me. It was huge and heavy,
much heavier than the Glock, “How much?”
The vendor looked at my grandfather and the two men grinned at one
another, while I stared at the glistening hunk of steel. I can’t remember what
the price was, but I do remember my grandfather saying, “When you’re
older, Efraim... when you’re older.” Grandpa bought me a soda and a
blowgun, but he made me leave the revolver behind.
MY FASCINATION WITH MIND-ALTERING SUBSTANCES
STARTED EARLY TOO. When I was 11-years-old, I would drink four or
five cups of Manischewitz at holiday dinners; by age 12, I was sneaking
bottles of wine out of my parents’ house. I’d drink half the bottle and refill
it with water. It got so bad that by the time holidays rolled around, all that
was in those bottles was water.
About a year or so after my first drink, I met a couple Jewish kids near
the Boardwalk on Miami Beach - ”snowbirds” that had flown down for
Passover holiday. They were 15 or 16-years-old, and they were smoking
weed. I was a little scared - my mother had me pretty terrified about doing
drugs - but they were older, and I thought they were really cool... so I did it.
I loved it and went strong on the good herb for the next ten-plus years.
GOOFING OFF WITH MY FRIENDS became a big part of my
childhood. We would skip school, hit the beach, or sneak home and play
Nintendo 64 for hours. Mario Cart, 007, and Mortal Combat were some of
my favorites, but especially 007, because I loved how realistic the weapons
were.
My mother was constantly getting phone calls from the school
informing her, “Your son didn’t show up today,” or “He skipped again.” She
would scream and holler at me, tell me I was grounded, and take away my
privileges, but I didn’t listen to her - she couldn’t control me. I was a
straight juvenile delinquent.
One night, I was out shooting hoops with my best friend at the time,
Jonathan Berney, and our buddy, Daniel Greenberg, at the local middle
school’s basketball court. It was after nine o’clock, and the security guard
pulled up in his little golf cart. He was a 30-year-old ex-high school football
bully type, now 40 pounds overweight and wearing a polyester rent-a-cop
uniform that was two sizes too small. He was a fat Billy Ray Cyrus
wannabe, with a buzz cut up top and long hair in the back. This guy was
constantly pushing us around, shooting his mouth off, and embarrassing us
in front of girls. A bully with a rental badge. His best days were behind
him, and he was pissed off about it.
“Hey!” he yelled as he got out of his electric vehicle, “it’s nine o’clock
- the courts are closed girls.” Which was only true when he was working.
We told him that the lights stayed on until ten o’clock, and he snapped, “Get
outta here ladies!”
On the walk back to my house I said, “I’m sick’a that guy.” I stopped
cold and looked at John. “Do we have any ammo left in the paintball guns?”
We put on our black T-shirts and pants, grabbed our Tippman Spider
paintball guns - or “markers” - and hoppers loaded with roughly 100 balls
apiece, and stuffed them into our backpacks. Forty-five minutes after being
kicked off the court, we crept through the rec center - Special Forces style -
and snuck up behind the security guard. We waited, and waited, and waited.
He was leaning back in the plastic seat of his rent-a-cop mobile, with the
basketball court’s flood lights blaring down on him, sipping on a Budweiser
and listening to Def Leppard. Daniel whispered, “You guys sure about
this?”
I looked at him and hissed, “I got an anti-Semitic vibe from the guy...
Fuck ‘em.” We waited, and waited, and waited. Then... the court lights
popped off, everything went dark, and we swarmed in from his flank - guns
blazing. Thump! Thump! Thump!
The average paintball marker cranked up to its maximum velocity of
350 feet per second will leave softball-sized bruises on you from 40 feet
away. We were 20 feet away, and he was yelping and screaming as the hail
of hard plastic ballistic projectiles slapped and smacked against his body.
Thump! Thump! Thump! The security guard jolted and jerked with each
thump and strike. He threw his beer in the air and before it hit the asphalt
court he had abandoned his golf cart and streaked off into the darkness.
We immediately ran off in the opposite direction - toward my house -
and about halfway there we heard the sirens of a dozen Miami Beach police
cruisers. The three of us dove behind some bushes as they roared by.
Terrified, we stashed the guns there… and literally crawled almost the
whole way home. Now I know that it seems like an incredibly reckless and
cruel thing to have done, but keep in mind, he was mean to old people,
children, and small animals. The guy had a mullet for God’s sake! He had it
coming.
 IT WASN’T LONG AFTER THE PAINTBALL INCIDENT that my
life was irrevocably changed. After years of begging my parents to enroll
me in a co-ed school, I was finally allowed to attend Hebrew Academy in
2000, at the age of 14. At first, I was doing pretty well, studying, attending
class, and really trying. And then, a few months into my first semester, I
went on a weekend spiritual retreat in Jacksonville, Florida - known as a
“Shabbaton” - with several school chaperons, teachers and Rabbis. We were
at a communal Sabbath dinner when my best friend Jon asked, “You wanna
get high?”
We slipped out the back of the building and smoked Jon’s weed out of
a beat-up metal pipe. We got caught by a Rabbi and kicked out of school.
No warning. No suspension. Just, “Get out!” It was the third time I had
smoked pot in my life. I didn’t even last three months at the Hebrew
Academy. We were placed on a plane and flown back to Miami.
Our parents picked us up at the airport. The first thing my mother said
when she saw me was, “On the Sabbath; how could you?!” She was more
upset that I had desecrated the Sabbath than she was that I had inhaled an
illegal substance and got myself expelled three months into my freshmen
year of high school. Even Jon’s parents were upset with me, regardless of
the fact that it was their son’s weed we were smoking.
THAT NIGHT, MY MOTHER CRIED ON THE PHONE to her
brother, my uncle Bar Kochba Botach - or BK. “What am I going to do with
this boy?” she wept into the phone. “He was expelled for drugs! His father
can’t control him.”
“Send him to me,” he said from California. “I’ll put him to work in the
warehouse with the Mexicans, show him how good he has it over there.”
“Bar Kochba, good Jewish boys don’t work in gun shops in the middle
of South Central, L.A. They get high school diplomas and college degrees...
and become doctors and lawyers…”
“But Terry, he’s not a good Jewish boy!” he barked. “Put him on a
plane!”
Out of frustration, my parents banished me to stay with my uncle in
Los Angeles. You know - because there’s no pot in California. My uncle
was supposed to straighten me out. He thought that forcing me to work
would give me a dose of reality, show me how hard the real world was.
CHAPTER TWO
 THE BASE
“Patriotism... is the egg from which wars are hatched.” - de Maupassant

LOS ANGELES IS A MASSIVE CITY, stretching from the golden

beaches that line the Pacific Ocean to the west and south of the city to the
snow-capped mountains rising to the northeast. The City of Angels is
America’s playground: Every year, millions of tourists are drawn to Los
Angeles to enjoy the natural beauty of Southern California, major
attractions such as Disney Land, Warner Brothers, and Universal City
Studios, celebrity stargazing.
But I didn’t get to see any of that. Instead, I was stuck in a dark and
dirty warehouse in South Central L.A. on Crenshaw Blvd. Botach Tactical
was housed in an old bank building. A virtual fortress of three-foot-thick
concrete block walls, its steel doors and bulletproof glass had been
converted into a warehouse and offices. Its three stories of Home Depot-
style industrial steel shelving were packed with inventory. The
neighborhood was a virtual warzone, with members of the infamous Crips
and Bloods gangs shooting it out in streets surrounded by slums and
housing projects.
My uncle liked to portray himself as a “devoted father and husband,
and a deeply religious Jew.” As the owner of Botach Tactical, a police-
supply company with a popular website and a national customer base, he
paid me minimum wage - which I accepted; I was just a kid. But he worked
me 12 to 14 hours a day - and paid no overtime. He would pick me up from
my cramped apartment at four in the morning and drop me off around six at
night. I was cheap labor, nothing else. It became obvious that he had only
brought me to Los Angeles to embarrass my father and come off as a hero
to my mother.
My uncle never tried to teach me anything, but he berated me
constantly about my drug use and lack of religious conviction. “You’re on
the wrong path, Efraim,” he would say.
 We argued constantly. The thing is, I didn’t like my uncle’s bullshit,
but I loved working. I was a 14-year-old kid stocking and selling police
equipment. I was making my own money - not a lot of it, but it was mine.
My uncle had me sharing a 700-square-foot two-bedroom apartment
with my two cousins and four ex-Israeli soldiers that worked for him as
salesmen. They were ex-military, but they couldn’t sell anything. Their only
skills were hitting targets and smoking weed. We were crammed in that
apartment; sleeping on single beds and the couch. I spent most of my free
time - which wasn’t much - driving around getting stoned with my cousins,
Joe and Jordan Wachtel, or hanging out at Venice Beach, watching the
human carnival: female sun worshippers strutting around in skimpy bikinis,
body builder freaks, hippies, and nutcases.
The only real problem with working for my uncle was my uncle. After
a while, I couldn’t stand the guy and our business philosophies couldn’t
have been more different. In my opinion, he was shamelessly optimistic and
would invest in inventory that was difficult to sell, resulting in millions of
dollars in merchandise strewn everywhere making it impossible to operate
efficiently, and he always thought that the next big thing was right around
the corner.
Eventually, when my parents saw that I was enjoying my exile, they
began pressuring me to give school another chance. “Oh, Efraim,” pled my
mother on the phone one night, “I want my children to be successful, not
high-school dropouts that work in gun shops. Please Efraim, do this for
me.”
“Mom,” I said, “I think I could be really good at this... I’ve been taking
sales calls and…”
“Efraim, please! I’m begging you to come back and give school
another chance.”
I DIDN’T WANT TO GO BACK TO FLORIDA, but around the same
time my mother was badgering me about school, my uncle and I got into a
huge argument. I wanted to move out of the warehouse and work sales -
”I’ll work strictly commission,” I told him. “I know the inventory and…”
“You’re just a kid! What do you know?”
“Not on the phone I’m not.” I’d been taking sales calls for months, and
he knew it. “On the phone I’m thirty-years-old and ex-military... and I’m
better at it than these has-been soldiers you’re keeping around who barely
speak English.”
 “What do you know, you’re just a punk kid,” he spat. “Get outta my
office!”
After that, I knew it wasn’t going to work out.
I MOVED BACK TO MIAMI and began attending Beach High. The
curriculum wasn’t the problem - I’ve always been a fast learner - but the
atmosphere wasn’t what you’d call “conducive to living a drug-free
lifestyle.” It was packed full of partiers, and on top of that, I hated school; it
was boring. I didn’t attend 90 percent of my classes. I just felt like if I had
to get up early and spend 30-plus hours a week somewhere, I needed to
leave with a paycheck.
ON SEPTEMBER 11TH OF 2001 four domestic airliners were hijacked
by members of the Islamic terrorist group al-Qaeda. The aircrafts were
headed for the West Coast, full of fuel. You know the story.
At 8:46 am, the first plane struck the north tower of the World Trade
Center in New York; roughly 15 minutes later, a second plane flew into the
south tower. Each caused significant damage. A third aircraft struck the
Pentagon at 9:40 am, and within an hour a fourth plane crashed in
Pennsylvania.
Around ten o’clock I was eating a falafel - the only thing on the menu
that was kosher - at a Beach High kiosk. I was washing my meal down with
a Pepsi when Avital Ash - a girl I’d had a crush on since we were kids -
walked up to my table with tears in her eyes, “Did you hear... two planes
crashed into the twin towers in New York,” she sniffled and wiped at her
eyes. “They’re saying it might be terrorists.”
I immediately went to my parents’ house and watched the footage of
the planes hitting the World Trade Center towers on CNN. The explosions.
The news anchor, Aaron Brown, was in tears. I remember hearing the
bodies hit the concrete as people jumped to escape the heat. The south
tower had collapsed before I got home, but when the north tower collapsed
under its own weight, I couldn’t believe it... it was the worst thing I’d ever
seen. I wasn’t thinking about terrorists - I was 15-years-old and not thinking
on a geopolitical scale at the time. All I knew was, nearly 3,000 innocent
people had been murdered.
That night, my family and I sat in our living room and watched
President George W. Bush address the nation. “Today, our fellow citizens,
our way of life, our very freedom came under attack,” said Bush from the
Oval Office. He spoke of bravery and sacrifice, of terror and danger. “And
in grief and anger we have found our mission and our moment. Freedom
and fear are at war... I will not forget this wound to our country or those
who inflicted it... May God grant us wisdom, and may He watch over the
United States of America. Thank you.”
Just over a week later, Bush addressed the nation again. “Fellow
Americans... On September the 11th, enemies of freedom committed an act
of war against our country,” said the President from the chamber of
Congress. “The evidence we have gathered all points to a collection of
loosely affiliated terrorists’ organizations known as al-Qaeda. They are the
same murderers indicted for bombing the USS Cole... [Islamic extremism]
that perverts the peaceful teachings of Islam... [to] kill Christians, and Jews,
to kill all Americans... The [group’s leader Osama bin Laden] has great
influence in Afghanistan and supports the Taliban regime in control of that
country.” Bush then demanded that the Taliban close all terrorist training
camps and hand over every terrorist member of al-Qaeda - including bin
Laden - to the United States immediately. “Or share their fate... We will
direct every resource at our command... every tool of intelligence, every
instrument of law enforcement, every financial influence, and every
necessary weapon of war - to the disruption and to the defeat of the global
terror network... Perhaps the NATO Charter reflects best the attitude of the
world: An attack on one is an attack on all.”
After it refused to hand over bin Laden, the United States and its allies
charged the Taliban government of Afghanistan with harboring bin Laden
and his followers. In early October of 2001, before the fires at the World
Trade Center had stopped smoldering, the United States and allied forces
launched an invasion of Afghanistan.
IT DIDN’T TAKE LONG before I was hanging out with my old
buddies. Within a few months of enrolling in Beach High, I was skipping
classes to get stoned at the local golf course with my friend Deedles or to
hang out at someone’s house - before long I wasn’t going to school at all.
A MONTH OR SO AFTER DROPPING OUT of high school, Jon and
I were at a friend’s house sitting around with a group of stoners watching
CNN footage of U.S. helicopters landing in Afghanistan and listening to
music. We were all drinking and smoking weed - I’d just turned 16 - and
someone asked, “You guys wanna try some coke?”
I figured why not - all the bullshit warnings I’d been given about
alcohol and weed killing me or ruining my life hadn’t come true. In fact, as
far as I was concerned, it made life a hell of a lot better. The stuff about
cocaine was probably a lie too. “Sure,” I said, “I’ll do some.”
I snorted a line - and then another one - and I loved it. It was an
awesome rush. Coke made me feel invincible and emboldened. It made me
want to work and dream. When I was lit up on cocaine I felt like I could
take over the world.
MY UNCLE’S BUSINESS had picked up considerably since
September 11th: gasmasks, safety equipment, and survival gear. He called
up my mother and asked if I would consider coming back and helping him
out. “BK,” she said, “I’m trying to get him to go back to school. He’s so
smart and…”
“Terry, I need him... He’s a hustler. I’m swamped and I can’t keep up.”
My mother told me not to go, but as much as she pleaded, I didn’t
listen to her. Besides, at that point in my life it was pretty clear that I wasn’t
going to be getting a high school diploma. I was working several menial
jobs to make ends meet and selling bags of weed to my Jewish friends on
the side, but none of that had the appeal of dealing in weapons.
CHAPTER THREE
 WEAPONS OF MASS DESTRUCTION
“No good decision has ever been made in a swivel chair.” - General George Patton

I DECIDED TO GO BACK TO CALIFORNIA and give working with

my uncle another try. This time, I was going to make a real effort to get
along with him - a serious effort. I convinced him to allow me to work
strictly on commission. He agreed to split the profit on all the new business
I brought in - fifty/fifty, with me selling all the products he already carried
for zero compensation. But I was sure I could make it work.
My uncle would make comments like, “Efraim thinks he’s gonna be a
big businessman,” and laugh about it with his buddies. But I ignored him,
and when his friends’ backs were turned he would ask me to help him
organize some stock or call a supplier. It was pathetic.
I STARTED LIVING AND BREATHING GUNS AND AMMO. I was
studying manuals, breaking down weapons and reassembling them in the
back room of my uncle’s shop, all the while doing internet research on the
technical and business aspects of a wide array of weapons and munitions. I
was working 18-hour days educating myself and drumming up new
business for myself and Botach Tactical.
I focused on pre-ban assault rifles, transferable machine guns, and
ammunition. I would buy and sell throughout the country using Internet gun
billboards - classifieds for dealers. I’d buy or trade for used AR-15 rifles
from a police department in Illinois and sell them to a weapons dealer in
Texas. I traveled from state to state, demonstrating Israeli Micro Galil
machine guns to local and state police departments. I was 16-years-old,
pitching machine guns to 45-year-old cops - totally stoned.
Initially the small-town sheriffs and city police officers were skeptical
of me - I was a baby-faced teenager. But the moment I started spitting out
the Micro Galil’s specs, that doubt turned into sales. The gun is based off
the exceptionally reliable and virtually indestructible AK-47 platform, with
improved accuracy and a 35-round 5.56x45 mm and 7.62x51 mm NATO
detachable box magazine feeding system. I was a frighteningly convincing
salesman. “Look,” I’d tell them, “If your officers aren’t using Micro Galil’s,
they might as well be using harsh language.” They would laugh and order a
dozen machine guns.
I would cold-call dealers and manufacturers, pitching weapons like the
Colt AR-15, Steyr-AUG, HK-91 pre-ban assault rifles, as well as 5.56 mm,
7.62 mm, .50 cal and 9 mm rounds. I never minded cold calling - hell, I
liked it! It was a great way to make contacts.
That’s how I met Ralph Merrill, a 60-year-old Mormon firearms
manufacturer from Utah. I called Vector Arms, Ralph’s company, and asked
if he was interested in purchasing 10,000 .50 caliber rounds. “Not for the
company,” he said. “But I’m a big 50 cal shooter - I’ll buy them for
personal use.” It seemed like a lot for personal use, but whatever. Weeks
later, once the transaction had been completed, Merrill called and told me
how impressed he was by my professionalism and enthusiasm. He wanted
me to keep him in mind if I came across any more deals. Ralph seemed like
a real mensch - a stand-up guy.
IN EARLY 2003, THE UNITED STATES alleged that Iraqi President
Saddam Hussein was attempting to develop “weapons of mass destruction”
in violation of United Nations Security Council resolutions. I remember
watching Colin Powell on this old beat-up television we had in the
warehouse, as he addressed the United Nations. “I’m absolutely sure that
there are weapons of mass destruction [in Iraq] and the evidence will be
forthcoming,” said Powell, leaning into the microphone. “We’re getting it
just now.”
After years of United Nations’ weapons inspectors being denied access
to a variety of sites throughout Iraq, and months of failed attempts to rectify
the situation, the Security Council unanimously passed Resolution 1441,
finding Iraq in breach of its obligation to fully disarm any chemical,
biological, or nuclear programs, and to comply with all U.N. weapons
inspections.
On March 17th of 2003, President George W. Bush addressed the
American people, “My fellow citizens, events in Iraq have reached the final
days of decision... [Saddam Hussein] has uniformly defied the Security
Council resolution demanding full disarmament. Peaceful efforts to disarm
the Iraqi regime have failed again and again... The United States and our
allies are authorized to use force in ridding Iraq of weapons of mass
destruction... Saddam Hussein and his sons must leave Iraq within 48 hours.
Their refusal to do so will result in military conflict...” To the Iraqi people
he said, “The day of your liberation is near... free nations have a duty to
defend our people by uniting against the violent. And tonight, as we have
done before, Americans and allies accept that responsibility. Good night,
and my God continue to bless America.”
Forty-eight hours later, Hussein hadn’t left Iraq, and Bush notified the
world of the United States’ intentions. “My fellow citizens, at this hour,
American and coalition forces are in the early stages of military operation
to disarm Iraq, to free its people, and to defend the world from grave
danger.” He ordered coalition forces to begin striking targets of military
importance. “The people of the United States and our friends and allies will
not live at the mercy of an outlaw regime that threatens the peace with
weapons of mass murder... We will bring freedom to others and we will
prevail. May God bless our country and all who defend her.”
Within hours, the United States and allied nations - mainly Great
Britain - launched Operation Iraqi Freedom.
I watched the invasion between cold calls: embedded CNN reporters
riding along with the troops - straight to Baghdad; the M-1 Abrams firing
their sabots into the Iraqi’s Soviet-made T-80 tanks, while roaring across the
desert; the thousands of surrendering soldiers of the Republican Guard
throwing down their AK-47 assault rifles and PKM machine guns, waving
their white flags. When I saw the U.S. soldiers sweeping through Saddam’s
presidential palaces with their M-4 assault rifles and M249 Squad
Automatic Weapons, I thought, I want to be the guy providing those
weapons.
When the U.S. boots hit the Iraqi soil, my uncle said, “This is going to
be good for business.”
I hate to admit it, but that putz was right.
MY FATHER AND UNCLE would regularly search multiple web sites
- fedbid.com and fbo.gov, known as “FedBizOpps” - for relatively small
federal government contracts to provide gasmasks for the FBI or uniforms
for U.S. Border patrol agents. $50,000 here and $100,000 there. But I
noticed there were huge solicitations for billions of dollars in military
hardware of all types, including weapons and munitions - my specialty.
Those were the contracts I wanted. But when I asked my uncle about
bidding on them, he said, “What do you know about government contracts
or delivering to a war zone? Come on Efraim, those are for large defense
contractors... international arms dealers… they’re not for us.”
“Yeah, but Botach Tactical is already registered on FedBizOpps, it has
past performance history with the government, and it’s a licensed import
export…”
“Stick to what you’re doing with the pre-ban gun boards stuff,” he
leaned back in his swivel chair, sucked on an American Spirit and said,
“I’m not going to risk my money on that.”
“But there’s no more risk than what you’re already doing.” It wasn’t
like selling inventory; you didn’t have to actually buy anything until after
you had been awarded the contract. “I’ll start small, something like…”
“Efraim!” he spat, “I’m not backing it, so you’re not doing it...
period.” Like I said, he wouldn’t have known a real opportunity if it hit him
in the head at point blank range.
MY PARENTS WERE IN A LOVELESS MARRIAGE for most of
my life. Trust me - there wasn’t any chance of me walking in on them
having sex. When I was 17-years-old, my uncle broke the news, “Your
parents are getting a divorce, Efraim. You know how your father is... My
sister deserves better, she’s too good for ‘em.” The whole time my uncle
was speaking I was thinking, This is how you’re telling me, by bashing my
father? He could have said, “They married too young” or “They had grown
apart,” but instead this asshole was making cracks about my father. My
father and I may not have been particularly close, but he was still my dad -
I’ve always hated my uncle for that.
My parents’ divorce bothered me, because I’d always thought they
would be there - together. Miserable - but together. Up to that point in my
life, I’d always felt like I had a home to go to - even if I didn’t want to be
there, I knew it was there. Now that assurance was gone. I was alone. On
my own. My father remarried immediately, to an Orthodox Jewish woman
from Chile who spoke very little English. She was practically a Jewish
mail-order bride. And she didn’t like me - to this day, she talks shit about
me behind my back.
I found out later - after the divorce - that my uncle had started holding
back my father’s commissions. A little here and a little there, but it added
up fast, and before my father knew it, my uncle owed him over $100,000.
When he demanded his money, my uncle fired him. At the time I didn’t
know any of this.
 WITHIN A YEAR, I had made more than $1 million in new sales for
Botach Tactical, and my uncle began to avoid paying me my commissions.
I’d made his company over $200,000 in profits, but he was holding off on
paying me my seventy-five grand - my seventy-five grand! He paid me a
little here and there - just enough to live on. My uncle used a litany of
excuses to justify withholding the bulk of my commissions. He would say,
“Efraim, I can’t pay you until we balance the quarterly commissions, but
I’ll give you a couple thousand to hold you over,” and he would cut me a
check for a fraction of what he owed me.
At the end of the quarter, my uncle told me, “Oh Efraim, I’m sorry I
forgot to cut your check, I’ll do it on the fifteenth of next month,” he pulled
out his money clip and peeled off several hundred dollars. “Take this... until
the fifteenth.”
After six months of the delays, one of the Philippine salesmen told me,
“He’s dragging you... BK isn’t gonna pay you, Efraim. He’s going to screw
you... it’s what he does.”
“He’s my uncle,” I scoffed. “He’ll pay me.” I couldn’t believe that a
family member would do that to blood. But I was wrong.
A couple months later, my uncle had run out of the good excuses. He’d
say, “I don’t have the liquidity to pay you right now, give me some more
time,” or, “You start going to Temple and stop doing the drugs... then
maybe I’ll pay you.”
“Regardless of whether you agree with my lifestyle or not,” I said…
“You still owe me the commissions!”
“You’re too young to have that kind of money, Efraim,” replied my
uncle. “You’ll overdose on the marijuana!” Marijuana?
“I’m not shooting heroin,” I growled. “I occasionally smoke some
weed after working an eighteen hour day... for you!”
My uncle brought up the fact that I was living rent-free in one of my
grandfather’s apartments. Not my uncle’s apartment, my grandfather’s. I
didn’t argue. Instead, I said, “Okay, so what’s fair market rent on a shitty
two-bedroom in LA, one thousand a month? I’ve been sleeping on the
couch there for twelve months with six other guys. So half the rent sounds
more than reasonable, take six thousand out of what you owe me and cut
me a check.”
“I can’t do this right now, Efraim!” he snapped. “We’ll talk about it
next week.” He walked into his office and slammed the door.
 MOTHER FUCKER! After a few more weeks of excuses, I finally
acknowledged that my uncle wasn’t going to pay me. I guess he figured that
for $75,000, he could afford to lose a nephew - he had a lot more of them.
Eventually, I gave him an ultimatum, “Pay me or I’m outta here.” He knew
how much I loved the business - he didn’t think I’d do it.
“You think you don’t need Botach anymore,” barked my uncle, “Go
then! You’re just like your father!” He assumed that because my father had
allowed himself to be fucked over I would too. He hadn’t counted on my
resourcefulness.
I SPENT THE LAST WEEK WORKING FOR MY UNCLE copying
his client files and then contacting my various accounts, calling in my
accounts’ receivables, as the money was owed to me.
By the end of the week I walked out of Botach Tactical with my
uncle’s entire client list ready to business with me personally and a little
more than $70,000 of my accounts receivables waiting for me in Miami.
Fuck him! I bought a ticket and headed back East.
CHAPTER FOUR
 “FEDBIZOPPS”
“Efraim Diveroli’s father hoped his son would be a doctor or a lawyer. What he got instead was an
international arms dealer.” - CNN

“Hamburgers. The cornerstone of any nutritious breakfast.” - Jules Winnfield, Pulp Fiction (Movie)

AFTER RETURNING TO MIAMI in early 2004, I told my father I

wanted to open a company that specialized in arms/ammunition trading and
defense contracts with the U.S. Government. Everything from flashlights to
assault rifles, I told him. But I already knew I was going to focus more on
weapons and munitions.
By law, all federal government solicitations for supplies or services in
excess of $25,000 must be listed on “FedBizOpps” - the U.S. Government’s
online website, fbo.gov - in order to allow the public to bid on them,
provided your company is registered and has the proper licensing.
In order to give the impression I’d been in business for several years, I
had convinced my father to sell me a shell company: AEY, Inc. He had
originally incorporated it as a small printing business, but hadn’t done
anything with it in years. The name AEY came from the first initial of my
siblings and me. It took some arm-twisting, but I got my father to apply for
a Federal Firearms License (FFL) and to register the company with the U.S.
State Department as an International Arms broker and exporter.
“Dad, I’m also gonna need you to get a Class-Three Automatic
Weapons Permit,” I said. I wasn’t old enough to have the licenses in my
name, but AEY Inc. could register them in its name as long as someone
over 21-years-old was the primary license holder.
“Efraim, I don’t know, you’re just a teenager...,” he complained.
“What about school?”
“We both know I’m not going back to school.”
“International arms and machinegun licenses...” my father sighed and
shook his head, “And you’re sure you can do all this?” To my father it was
a risk, and he wasn’t a risk taker.
 “There’s no doubt in my mind.”
It took some finesse and a little pressure to talk him into it, but we had
a common enemy in my uncle. “I’ll do it,” he said. “I’ll do it.” Eventually, I
got my own Import license from the ATF, an FFL license, and Class-Three
Automatic Weapons License and became a registered exporter and broker
with the State Department.
I STARTED WORKING OUT OF A CRAMPED ONE-ROOM
apartment, surfing the solicitations on “FedBizOpps” and other online
marketplaces. I started bidding on relatively small, safe contracts;
underbidding the established distributors and colossal manufacturers of the
industry like Federal, Remington, and Winchester. My low overhead and
work ethic made up for my lack of experience and industry contacts. It
wasn’t easy. I had to find the merchandise, call up the suppliers and shoot
the shit with them, ask them about their kids’ T-ball tournaments and
peewee football games. I would joke about my wife and our upcoming ten-
year anniversary, “The old ball and chain is hoping for a romantic night out,
but at your prices... it’s looking more like frozen pizza and domestic beer.” I
could come off as a cocky young ex-navy seal or a middle-aged bureaucrat.
No one ever wondered whether I was a 17-year-old stoner working with a
laptop, a cell phone, and a Pyrex water pipe full of high-grade marijuana.
Once I got the suppliers laughing, I’d start talking them down on their
prices - and that was crucial. What most people don’t understand is that an
arms dealer isn’t a broker or middleman in the traditional sense - almost
everything had to be paid for upfront. I hardly ever got credit extended to
me. Once I bought the merchandise, I had to have it trucked to the buyer.
Then the government had to inspect it, sign a DD250 Material Inspection
and Receiving Report, and - if I was lucky - thirty days later I got paid.
I was working out of my apartment, a cheap efficiency I rented for
$600 a month. Many of my competitors were corporate giants with
thousands of employees. General Dynamics had approximately 95,000
employees with medical and pension plans - and they couldn’t compete
with a 17-year-old living on Top Ramen noodles and sleeping on an old
mattress with no box spring. I was driving a beat-up Chevy Cavalier - built
in 1985, the same year I was born - I’d bought it for $500, tax, tag and title;
it overheated so often I had to drive around with two gallons of water in the
trunk. My working capital consisted of my childhood savings and what I
took with me from Botach Tactical - that was it.
 MY FIRST CONTRACT was for nearly one million rounds of 5.56
mm ammunition for the U.S. Army Special Operations Command in Ft.
Bragg, North Carolina. I won the bid in April of 2004, for roughly
$125,000, and it was a disaster. Between Botach Tactical’s diverted funds
and my savings, I had just enough money to make the deal work. I found a
million rounds of Israeli-made 5.56 rounds on the Internet, from KY
Imports out of Louisville, Kentucky, for $100,000. The pictures of the
ammunition looked good - maybe they were photoshopped or depicted a
product I hadn’t bought - but when I had the ammunition shipped to Ft.
Bragg, it was rejected by their base-ammunitions specialist. They wouldn’t
sign the DD250 Material Inspection and Receiving Report.
Apparently, during the ammunition’s voyage from Israel to North
America, the rounds had been exposed to salt water and had become
severely tarnished. Functional, but tarnished. The U.S. Army didn’t want
them. Not only was I about to lose everything I had, but I was about to
default on my very first government contract.
I immediately found this backwoods guy out of Texas who ran a booth
at state gun shows; he was willing to buy the tarnished ammunition - for a
considerable discount. “Well,” I recall asking him, “what’re you gonna do
with it?”
“Shoot,” he replied in a southern drawl, “I’m gonna dump ‘em into a
cement mixer and clean ‘em up with some corncob and walnut media. By
the time I’m done they’ll be so shiny you won’t be able to look at ‘em
without burnin’ your eyes.” Sounded good to me.
Between the money I got back on the saltwater-ammo and some
money I begged my father to lend me, I had just enough to make the deal
work - again. I bought another one million 5.56 rounds from American
Ammunition out of Hialeah, Florida for about $115,000, delivered. Only
this time, I drove out to the company and inspected the ammunition, fired a
couple rounds just to be sure, and then had it shipped.
This time the base ammunition specialist signed the DD250 Material
Inspection and Receiving Report, and I made nearly $10,000. Believe it or
not, as bad as the deal had gone, it motivated me. That was all I really
needed: a little bit of confidence. There was no going back to working for
someone else after that. I certainly would never go back to my uncle.
Over the next eight months, I started bidding on everything from
ammunition and explosives for the Department of Defense to weapons for
Homeland Security. I had to finance everything myself, so that limited me
to smaller contracts - fifty to one hundred thousand dollars on average.
By the end of the year, I had completed over $1 million in U.S.
Government contracts with nothing more than a cell phone and a laptop.
IN EARLY FEBRUARY OF 2005, I bid on a solicitation for over $1.3
million to supply 10,000 level III A-rated ballistic helmets, for the Iraqi
National Army. The thing is, I didn’t really think I was going to win the bid,
so I hadn’t put any thought into how I would fund it. A couple of weeks
later, I was awarded the contract, but I couldn’t afford to finance it myself.
I realized I was going to need a financial backer, so I contacted Ralph
Merrill, the Mormon gun manufacturer from Utah, one of the contacts I’d
made working at Botach Tactical. “Mr. Merrill,” I said, “my name is Efraim
Diveroli, we spoke a few...”
“Of course I remember you Efraim,” Merrill laughed, “You sold me
the fifty cal. rounds...”
I laid out my dilemma - the Department of Defense contract and the
amount of money involved. I had priced out the helmets at roughly $135 to
the government, but I was able to buy them through a contact, Buk Seong
Nam at, Jino Corp., a South Korean distributor for around $100 per.
Ralph had been in the commercial firearms industry a long time, but
had never dabbled in U.S. Government contracts. I explained that the
helmets were just a drop in the trillion-dollar bucket of military solicitations
available out there. My only problem was the availability of funds. “I was
hoping you’d consider taking an equity position in the deal, Mister Merrill.”
I offered him 30 percent of the profit.
He thought about it for a couple of seconds, and said, “Sure Efraim,
I’d be happy to.”
THAT DEAL PUSHED ME TO THE NEXT LEVEL. Knowing Ralph
was behind me, I started getting more and more aggressive. I bid on
research and development equipment for the State Department at roughly
$850,000, and ammunition for the Department of Defense at over $350,000.
The deals were getting bigger and bigger.
IN LATE FEBRUARY OF 2005, I was sifting through the awards
section of “FedBizOpps,” and I noticed that several large contracts had been
awarded to a defense contractor out of California, First Defense Group
International. I called them to see if we could work something out, and
spoke to the “CEO,” Peter Stein, a South African.
 The moment I got the guy on the phone I felt like something wasn’t
right, but I was so thrilled to be talking to the CEO of a big-time contractor
that I didn’t hesitate. “So Mister Diveroli,” he said in a guttural English
accent, “You’re interested in a subcontract, is that right?”
“Yes, sir,” I replied. I knew First Defense had been awarded a contract
to supply 7,100 AK-47 assault rifles to the Iraq Security Forces, for roughly
$700,000. “I can get you the AKs for seventy-five delivered.” I had a
contact in Bosnia that had quoted a price of $55 per, but I had to cover the
cost of shipping. “I’m willing to put up all the capital and split the net profit
fifty/fifty.”
“You know Mister Diveroli,” he sighed, “we’re so swamped here... I’m
going to take you up on that.” His company’s website boasted a dozen
executives, defense experts, and account executives. It was a big outfit. The
type of defense contractor I hoped to be someday.
While my guy in Bosnia was scraping together the AK-47s, Stein ran
into some issues with Rabintex Industries - an Israeli armor manufacturer
he’d convinced to front his company several million dollars of product on a
large U.S. Government contract for body armor - and then Stein
disappeared with the money. God only knows what happened to him. He
stopped answering his cell phone, none of the “executives” or “defense
experts” were answering the business line, and no one was responding to
company emails. That’s when it hit me: I had never spoken to anyone but
Stein; he was the only one who ever answered the phone, and there were no
extensions other than his. He was a one-man operation, just like I was.
After a couple of weeks, my contact in Bosnia said he was ready to
ship the AKs. I had put up over $100,000 of my own money and roughly
quarter of a million dollars of Merrill’s money for the purchase of the AKs,
and now I had nowhere to send them and no one to buy them.
I immediately contacted the Army’s contracting officer in Baghdad
and explained that First Defense was a fraud and Stein was dodging the
Israelis - maybe even dead. “Shit,” said the Army rep. “We need those
AKs.”
“Then you’re gonna have to switch Stein’s contract to AEY, Inc.” I
couldn’t complete the contract knowing the Army was going to cut the
check to Stein’s company.
“Mister Diveroli...” he sighed, “That’s just not done... I can’t just
unilaterally assign you the contract; it’d require signatures of both
companies and the blessing of my superiors…”
“Look, how bad do you need these things?” I asked. “‘Cause if you
don’t assign me the contract you’re never gonna see these AKs.”
“Huh,” he thought about it for a few seconds, then whispered, “How
quickly can you have ‘em here?” I knew I had him.
It took me a few more calls and a little charm, but I convinced the
Army rep to issue AEY, Inc. the contract, and I shipped the AK-47 assault
rifles. I made almost one hundred grand on Stein’s deal.
A FEW WEEKS AFTER delivering the Army’s AK-47s, I was online
checking my corporate account’s balance. I was waiting for a wire from the
Defense Finance Accounting Services (DFAS) - the Department of
Defense’s financial arm - the final payment on another completed contract.
That’s when I noticed my account had over one million dollars in it. The
strange thing is, I recall being shocked by the sight of the $1 million
balance not because it was unexpected - I knew I had made well over a
million dollars by this point - but because it had no real effect on me at all. I
was indifferent. I was an 18-year-old self-made millionaire - and it didn’t
even faze me.
I did however treat myself to a 1993 Mercedes S320, which I paid
$9,900 for. That was it. Not a Porsche or an Aston Martin, I bought a
decade-old, big-body Benz - and I went right back to work! I was still
wearing hand-me-down clothes and living in a shitty apartment, but I was
too focused to care.
I’ve heard people say, “Efraim’s always known what he wanted in life
and how he was going to achieve it,” but that’s not true. I didn’t know what
I was doing. At that point, all I could see was what was right in front of me.
I was bidding on everything I thought I could handle - often times more -
and I was figuring out how to buy it and deliver it after I won the contracts.
On top of that, most of the time I was stoned, drunk, coked up, or some
combination of the three.
I HADN’T SPOKEN TO MY PARENTS IN MONTHS. My father
was upset that I didn’t respect Orthodox Judaism, but he was proud of my
success. My mother, however, was disappointed to the point of writing me
off. She would break down every once in a while and call me, inviting me
to dinner, and I would say, “I’m busy, but I’ll try.”
“Fine!” she would snap, “Come if you want. I don’t care!” and then
she’d slam down the phone.
 EVERY NOW AND THEN I stopped by to check up on her. I would
pull up in my Mercedes, talking on my cell phone to a business associate,
eating a McDonald’s Big Mac, with some chick sitting shotgun. My mother
would scream, “Efraim! It’s the Sabbath, you shouldn’t be driving,” and I
would just smile at her.
I used to tease her. I’d tell her, “Come on mom... you know I’m your
favorite.”
She would always respond, “I love all my children equally,” but then
she would give me this little sideways grin, and I knew - I was her favorite
child... and her biggest disappointment. Sometimes it works out like that.
CHAPTER FIVE
 EQUIVALENT SPECIFICATIONS
“In war, you win or lose, live or die - and the difference is an eyelash.” - General Douglas
MacArthur

I MET THIS GIRL, this really amazing girl. Her name was Rachel, an
orthodox “JAP” (Jewish American Princess) - or at least she wanted to be -
with blonde hair and sapphire-blue eyes. She was 18-years-old, petite, a
hundred pounds soaking wet, and only four foot eleven inches; she was
built like a Barbie Doll. Rachel was in Yeshaya’s - my younger brother -
class.
We met at the canal near North Miami Beach, while drinking beers
with a small group of friends listening to the likes of Godsmack and Korn.
It was only puppy love, but it felt real to me.
LIKE EVERY TEENAGE INTERNATIONAL ARMS DEALER’S
FIRST RELATIONSHIP, it was rocky. We argued all the time, and it was
mostly about me. I didn’t dress good enough for Rachel or spend enough
money on her or spend enough quality time together - all of it was true. I
was wearing old cargo pants and T-shirts, and no, I didn’t spend much
money on her... or on myself, for that matter. I had realized that in this
business, cash is king, and I needed to stay as liquid as possible. And yeah,
I worked around the clock.
We would be on a date, having a romantic dinner at a restaurant and
my cell phone would ring. She’d give me that look - that don’t you dare
answer that look. But what choice did I have? It may have been eight
o’clock at night in Miami Beach, but it was eleven o’clock in the morning
in South Korea.
I was in the middle of a $2.4 million contract with the U.S. Embassy in
Bogotá to supply M249 Squad Automatic Weapons to the Colombian
Army. The M249 is the American version of the Belgian FN Minimi, a light
machinegun manufactured by FN Herstal. The projected profit on the deal
was already very decent - roughly $500,000 - but I had a contact in Seoul
that could provide Daewoo K3 machine guns, the South Korean equivalent
of the M249, at a substantial discount. The K3 had the same specifications;
both were gas-operated and air-cooled, with a muzzle velocity of over 3000
feet per second and a rate of fire of 900 5.56 mm NATO rounds per minute.
That call could have roughly doubled my profit to almost one million
dollars... and it did. I convinced the U.S. Embassy to accept the South
Korean K3s, netting AEY, Inc. just over $900,000.
THE THING ABOUT MOST FEDERAL GOVERNMENT
CONTRACTS IS that everything is in the government’s favor - well,
almost everything. One potential advantage to the contractor is the
“equivalent or equal clause,” which is incorporated into most government
contracts. Once a bidder is awarded a contract, the government allows for
the contracted equipment to be substituted - with permission - for
merchandise of “equivalent specifications.” It’s not a bait-and-switch; it’s
taking advantage of the one thing that was in my favor. So, once I obtained
a contract, I’d work on whittling down my costs. I’d convince the
contracting agency to allow AEY, Inc. to swap out more expensive brand-
name products with generic but technically equivalent merchandise.
Canadian Med-eng bomb suits or British RBR ballistic shields turned into
some generic South African manufacturer’s ballistic shields, and Knight
Armaments’ unnecessarily overpriced SR-25’s 308 rifles, made in Florida,
were swapped out for DPMS 308 rifles, manufactured in Minnesota, which
were technical equivalents that satisfied the mission requirements for half
the price.
DURING THE COLOMBIAN MACHINEGUN DEAL, I became
friendly with Carlos Gonzalez, a Weapons Advisor with the U.S. Embassy
in Bogotá who was helping supply and train the Colombian Special Forces.
Since 1989, the United States had been supplying the Colombian
government with military equipment and advisers to help it oppose the coca
farmers, processors, drug traffickers, and the communist guerilla group
FARC (Revolutionary Armed Forces of Colombia).
Carlos called around five o’clock on a Thursday. “Efraim,” he said,
“I’m in Miami. I was wondering if I could come by, meet you in person.” I
assumed he wanted to stop by AEY, Inc.’s nonexistent office. I didn’t want
him knowing I was working out of my shitty efficiency, so I suggested we
meet for lunch the following day. “No, I’m only in town for the day. I want
to meet now - tonight. Get something to drink, maybe. Have you ever been
to a Latin dance club?” He laughed, “Do you even know what salsa and
merengue music is? Come on, meet me at the club.”
His agency was one of my best clients; they had just bought $2.4-
million-worth of machine guns from my company. “Sure,” I said, “Where
do you wanna go?”
We met at a salsa and merengue club in South Beach that, like most
clubs, carded you at the door. I was only 19-years-old, but I got in without a
problem. As a result of my drug and alcohol problem, I tended to lose my
license all the time. However, while trying to track down one of my many
lost cards, I’d figured out that it wasn’t an uncommon problem. Lots of
people lost their identification cards. So whenever I bought gas, I got into
the habit of telling the cashiers I had lost my ID recently and would they
mind if I looked through their lost and found. They almost always had a
stack of licenses behind the counter. I’d shuffle through them, grab the one
that closest resembled me, hand the clerk a five and walk away with the
card. I had multiple licenses.
It took me a few minutes to find Carlos in the crowd; it was wall-to-
wall tan brunettes dancing to El Gran Combo and Tito Swing. There were
colored strobe lights, lots of low-cut skirts, and I was looking for an average
looking Spanish guy in a club full of Latinos. Carlos was leaning against
the bar; I introduced myself and we shook hands, “Efraim,” he said, “I was
expecting someone... How old are you, if you don’t mind me asking?”
“Nineteen.” What was I going to say - you’re with the U.S. Embassy,
go look it up? “But I look young for my age.”
He smiled politely, his eyes drifting over the liquor behind the bar.
“How’d you get in here?”
“That’s an excellent question, Carlos,” I was starting to feel a little
nervous. “Excellent question.” But I didn’t answer it, and I was starting to
think this was a bad idea, when the bartender asked what I’d like to drink.
“Vodka tonic with a lime,” I said while staring at Carlos.
She said, “ID, please,” and Carlos glanced at me expectantly. The
stress of the situation was starting to make me thirsty, and I thought, fuck it!
I pulled out my Juan C. Perez III Florida driver’s license, slipped the card to
her, and watched Carlos’ eyes follow it.
“Juan Perez the third?” asked Carlos, as the bartender handed me back
the license and poured me a shot of vodka. He laughed nervously, “Who are
you?”
 “I’m whoever the situation requires me to be... Right now I’m a
twenty-five-year-old Latino.” Tomorrow I might be a 45-year-old bible
thumper.
Carlos burst into laughter, “Unbelievable, this whole time I thought
you were in your thirties - probably ex-military... Are you even Efraim
Diveroli?”
We had several shots, danced with a couple Cuban girls, and a few
hours later we were talking shop at a table, with two bronze brunettes.
Carlos had been in Bogotá training Colombian forces for almost a decade.
The narcotics traffickers and FARC - or “narco terrorists” - had declared
“total war” against everyone involved in the campaign against the drug
trade. They killed politicians and judges, blew up newspapers and police
stations. The Colombians had lost a lot of soldiers, and he had lost several
good friends. “It’s the wild wild West down there,” yelled Carlos, over the
salsa music, “but it’s getting better.”
While he was insisting the Colombians were making real progress in
the “war on drugs,” I was excusing myself every 20 minutes or so to do a
couple of lines of what was probably high-grade Colombian cocaine in the
restroom. When one of the girls commented on me rubbing my nose, I told
her, “I’ve got the flu...”
She could tell I was lit up like a Christmas tree, and she snickered, “I
wouldn’t mind some flu?” but Carlos didn’t catch it, and ten minutes later
she and I were in the men’s room snorting coke off the porcelain sink.
I was pretty fucked up. I had this chick grabbing my crotch underneath
the table, while I was pitching Carlos additional military supplies - body
armor, ballistic helmets, ammunition, M-4 assault rifles, and more K-3
machine guns.
“We’re good on most of that... what else you got?” he chuckled.
“What about tactical goggles?” I’d just bought over 1,000 pairs of
military spec fog-proof fragmentation goggles from a military contractor for
$7 per. They were part of a 100,000-unit order for the U.S. Army that got
cancelled. “Everyone needs a good pair of tactical goggles... and I’ve got
‘em in black, desert tan, and jungle green.”
Carlos grinned, “How much?”
“The military buys ‘em in lots of half a million for thirty-five dollars a
pair, but if you take all one thousand... twenty-eight per.”
 “It’s gotta go through the bidding process,” he said, “but we can
probably work something out in the way of getting a solicitation out there.”
A few weeks later, Carlos had the U.S. Embassy put out a solicitation
for 1,000 Tactical Goggles on fedbid.com with technical specifications that
mirrored AEY, Inc.’s goggles - I made a bid and was awarded the contract.
AEY, Inc. made roughly $20,000 in a night of partying, a $7,000
investment, and about an hour of work.
CHAPTER SIX
 PIRATES OF THE DEFENSE INDUSTRY
“May God have mercy upon my enemies, because I won’t.” - General George Patton

“If you’re gonna set somebody up, it’s gotta be a surprise, you got that?” - Chili Palmer, Get Shorty
(Movie)

IN FEBRUARY OF 2005, I spotted a large Army solicitation on

“FedBizOpps” to supply weapons and munitions to the Iraq Security
Forces. It was an enormous quantity of mostly Soviet and some NATO-type
weapons and munitions, many of which I’d never even heard of, like the
DShK (Degtyaryov-Shpagin Large Caliber) 12.7x108 mm drum magazine,
heavy support machinegun and the SVD (Dragunov’s Sniper Rifle) 7.62x54
mm box magazine, long-rang semi-automatic gas-operated engagement
weapon. These things weren’t your standard Smith & Wesson service
revolvers.
IN LATE DECEMBER OF 1991, the hammer and sickle flag was
lowered from the Kremlin and in its place rose the white, blue, and red flag
of Russia. The Iron Curtain had been pulled back. The collapse of the
Soviet Union completed the end of the Cold War by extinguishing Leninism
in the homeland; what emerged from the wreckage were 15 independent
states with a plethora of problems. All were in economic distress, had
significant national minorities, and none had secure, legitimate boundaries.
The world had become a less scary place, but a more dangerous one.
At the time of its breakup, the U.S.S.R. possessed the largest armed forces
in the world - roughly four-million soldiers and a military armed with
everything from small arms to advanced nuclear weapons - and now all of
the newly independent countries possessed sizable stockpiles of weapons
and munitions.
THE WARSAW PACT in May of 1955 had established a mutual-
defense organization composed of the Soviet Union, Albania, Bulgaria,
Czechoslovakia, Eastern Germany, Hungry, Poland, and Romania. The
treaty provided for a unified Soviet command of the combined territories’
military. But after the collapse of the communist governments, there was no
need for the newly independent countries to continue maintaining their
massive inventories of weapons and munitions.
So, many of these cash-strapped countries began selling off huge
quantities of their surplus armaments directly after announcing their
independence. But recently there had been a resurgence in Central and
Eastern European Cold War weapons and munitions sales.
During the collapse of the Albanian government in 1997, over half a
million small arms and light weapons and several tons of ammunition were
looted from the national arsenals around the country; most of the stolen
weapons ended up in Kosovo helping to ignite armed conflict in that region.
As some countries jockeyed for NATO membership, they started
selling off their excess armaments and modernizing their armed forces to
NATO guidelines.
In 2001, Bulgaria sold over 200 Soviet battle tanks and other heavy
weapons to finance NATO standard equipment. The Czech Republic sold
off nearly 200 of their surplus battle tanks, 50 combat planes, and over
20,000 small arms in order to update their equipment. Poland shed 800
battle tanks in 2002. Romania sold off large quantities of surplus light and
heavy weapons and munitions. Between 2003 and 2006, Slovakia’s military
sold off 200 battle tanks and over 300 armored combat vehicles in an effort
to fund their modernization program.
As a result of the destabilization, corruption, and surplus military
hardware and ammunition throughout Central and Eastern Europe, the
availability of Soviet-style weapons and munitions was as abundant as it
was during the decade preceding the fall of the Berlin wall.
When I spotted the solicitation on “FedBizOpps,” I contacted Ralph
Merrill to ask if he had any contacts in Eastern Europe.
“There’s a Swiss gentleman named Heinrich Thomet,” said Merrill.
“I’ve dealt with him on Uzi parts and accessories.” Merrill spoke highly of
Heinrich; he referred to him as a “savvy Swiss arms dealer.” He trusted him
implicitly. Merrill had fronted Heinrich several million on multiple deals
they had done together, and had used him to import thousands of Uzi-parts
kits from South Africa to the U.S.
The three of us swapped emails and several phone calls regarding the
solicitation’s weapons and ammunition requirements. Heinrich had great
contacts throughout the old Soviet bloc and Eastern Europe. It took about a
month, but between his people and my own sources, we submitted a pretty
aggressive bid.
Roughly a month later, in April of 2005, AEY, Inc., Taos Industries,
Blane International, DLS Inc., and SAS all simultaneously won an
Indefinite Quantity Indefinite Delivery (IDIQ) for $51 million. That meant
each company was now eligible to bid against one another for individual
delivery orders. Essentially, we were a select group cutting each other’s
throats over a piece of the $51 million contract, which was a bullshit move
on the part of the Army. I was disappointed about not having won the entire
contract outright, but not deterred.
AEY, INC. STARTED WINNING ALL THE DELIVERY ORDERS.
Mini Compete One was for 1,000 EoTech Holographic laser sights for half
a million dollars. Mini Compete Two consisted of 638 PKM machine guns
for nearly $1 million. A few weeks after winning Mini Compete Four, an
eclectic order of RPK heavy and light machine guns, AKMS rifles, PKM
light machine guns, accessories, and ammunitions for nearly $2.7 million, I
got a call at the office from Stephen Chiebus, a contracting officer in Iraq,
“You won another one Diveroli,” he chuckled. Mini Compete Five was
12,220 AKMS rifles for nearly $1.5 million. “Your only real competition on
this one was Blane International... From what I’ve heard, Milton Blane is
pretty pissed. From the conversation we had... I’d say the guy’s gunning for
you.”
Milton Blane was a 70-year-old defense contractor from Cumming,
Georgia who had been in the arms industry for over 40 years, and my
fledgling company was taking deal after deal from him. It got to be a
running joke with the Iraqi contracting officers. They would call up
laughing, “You just beat out old man Blane for another Mini Compete,” or
“Blane lost another one.”
THE LOSSES GOT SO BAD for Milton Blane’s company that on July
26th of 2005, he contacted Immigration and Customs Enforcement and
made a blatantly false report, hoping to get me arrested and AEY, Inc.
suspended, thereby eliminating his main competition.
Blane stated, “This kid is illegally purchasing AK-47s from China and
having them shipped to Bulgaria and Croatia” - a violation of the U.S.
export laws and regulations. Once there, Blane said, the weapons were
being re-stamped using the mark of Bulgarian and Croatian manufacturers
before being forwarded to Iraq for the fulfillment of my U.S. Army
contract. “What he’s doing is criminal.” The allegations were complete
bullshit; I hadn’t done anything remotely like that - wouldn’t do anything
like that.
The report was eventually forwarded to Agent Michael Mentavlos with
the Defense Criminal Investigation Services (DCIS). Mentavlos
immediately opened an investigation into the allegation.
BLANE’S UNDERHANDED TACTICS weren’t uncommon for
military contractors or arms dealers. They were constantly trying to
sabotage one another, and some arms dealers have even been known to kill
off challengers. I beat out another competitor in mid-2005 on a contract to
supply 100,000 pistol and rifle cleaning kits to Iraq. I won it at roughly
$700,000. But I was so swamped with other orders that I decided to
subcontract it out to another dealer - Beyong Kim, a defense contractor out
of Newport News, Virginia - one of the same competitors AEY, Inc. had
been consistently out-bidding on several non-weapons related procurements
in Iraq.
I talked Kim into accepting what amounted to 30 percent of the profit
margin to complete the contract AEY, Inc. had beat him out of. I should
have known something was wrong... the guy was too eager to help. Kim
ordered the cleaning kits from a South Korean supplier at I assume no less
than $3.50 per kit, but he arranged the transportation to Iraq himself - it was
supposed to be a quick clean $300,000 profit, less $90,000 for Kim.
The day the kits were supposed to arrive, I got an angry call from a
contracting officer. “What the fuck, Diveroli!” he screamed, from Baghdad.
“What’re you thinking; you have any idea what you’ve done?”
“No, I...” I replied genuinely shocked, this was my best client at the
time and I definitely wouldn’t have done anything to upset them, “What’d I
do?”
“Our cleaning kits arrived at Ummqasr port.”
“That’s great, right?”
“No, not great! They arrived in an Iranian cargo ship - an Iranian-
flagged vessel!” A clear violation of not only AEY, Inc.’s U.S. Army
contract, but U.S. law and possibly international sanctions. “Diveroli,
you’re through!”
My first thought was, Kim! And then my adrenalin kicked into
overdrive, “I’ve been sabotaged... hoodwinked,” I then explained what Kim
had done and why. “The guy set me up, Lieutenant.”
 “Huh,” he grunted, unconvinced. “Still... it’s still your responsibility.”
“Come on Lieutenant... what would Jesus do? It was an honest
mistake. Let’s not turn this into an international incident here… nobody
would benefit from that. It’s not going to look good for either of us, let’s
just move past this and... complete the mission.” Just before our
conversation ended I said, “By the way, did you sign off on the stuff?”
“Christ!” he scoffed; “You’ve got a real set on you.” He took a deep
cleansing breath and said, “I’m doing it right now.”
NOT LONG AFTER I started winning the Mini Competes, I decided I
needed some toys. I was at the point where the shitty car and grungy clothes
were becoming a hindrance. I bought a silver Saab 9-5 with black leather
interior and a stainless-steel Rolex Submariner, along with a half dozen
Ermenegildo Zegna and Lanvin suits, Hugo Boss casual wear, and Cole
Haan dress shoes. Believe it or not, it was hard to spend anything on myself
- I’d worn my frugal existence like a badge of honor, bragging about buying
off sales racks and clipping coupons. I’d never even taken a vacation.
I had a Class III Federal Firearms license, so I began collecting
machine guns. They were the only thing I bought that I really enjoyed: two
full-size Israeli-made Uzis, two H&K MP-5 sub-machine guns, two
Bushmaster M-4 carbines, two AK-47 assault rifles - a Hungarian-made
AMD-65 short barrel variant and an Egyptian-made standard Kalashnikov -
and a Steyr AUG assault rifle... about twenty in all. I kept a loaded Uzi
under my desk at all times, in case someone decided to go postal on me - I
was a high-net worth individual, the grandson of Holocaust survivors, and I
wasn’t planning on going out like a sheep to slaughter.
THERE WERE ADVANTAGES to being a small government
contractor, and disadvantages. I was able to win bids with margins that
larger outfits couldn’t afford to compete with. The downside was that I
didn’t have a history with manufacturers or the ability to buy in large
enough quantities to get the sort of significant discounts that were reserved
for the manufacturer’s established distributors. So I improvised - I bid on a
contract for 350 aviation helmets for the Air Force, below what I was told I
could purchase the product for. You have to understand that it was a huge
risk, and underbidding distributors’ or even dealers’ costs just isn’t done. It
could have ruined AEY, Inc.’s performance record, and opened me up to
serious litigation.
 Once AEY, Inc. was awarded the contract - at roughly $123,000 - I
contacted GenTex, a manufacturer of aviation helmets that met the Air
Force’s specs. I told them I had won the contract and tried to place an order
for the spec helmets at a price that would leave me with a reasonable profit
margin.
“You’re screwing with me, right?” snapped the account executive.
Apparently I had caused a real problem for GenTex’s account executive; he
had already received several angry phone calls that morning from the
company’s established distributors. They were in an uproar about being
underbid on a product they - supposedly - had preferential pricing on. “Do
you have any idea what you’ve done...? You underbid all our distributors,
and now you want us to sell you the helmets for less than we’d have sold
them to our own people for… not gonna happen.”
“Look,” I said, “I’m real sorry about that, I made a mistake. I’m new
to this whole thing, but I’ve still got a contract for three hundred and fifty
helmets here, and I need ‘em at two hundred and eighty-five apiece - to
break even.” These were helmets that typically sold for no less than $340
apiece.
“Mister Diveroli,” he growled, “I can’t do that; my distributers would -
”
“I understand what you’re saying, but this doesn’t look good for either
of us - they’re expecting GenTex helmets. I’ve gotta have those helmets and
you don’t want the Air Force coming down on both of us, or cancelling the
order altogether. We both know there’s no guarantee they’ll reorder the
helmets. Even if they do, they might request an entirely different product
that you don’t manufacture.”
“Christ!” barked the account executive. I could practically hear his
teeth grinding through the phone. “Two eighty-five is at cost for us. I can’t
approve that…”
“Then get it approved by a superior, because we’ve gotta get this
done.”
He sighed, “I’ll check, but I doubt it... I’ll have to get back with you.”
He didn’t sound hopeful, but he didn’t say no, either. So I immediately
bought a cashier’s check in the amount of $100,000 and overnighted it to
GenTex’s office.
The following day he called my cell phone, “What’re you doing?” he
asked, perplexed. “I’ve got a cashier’s check here for...”
 “Right, good, good, when do you think they’ll be ready; we’ve only
got thirty days to deliver, so...”
“What’re you talking about?” he snapped. “We haven’t agreed to
accept the two hundred and eighty-five dollar price yet.”
“You said you were going to get it approved…. I thought we had an
agreement... You’ve got the check.”
The problem was “FedBizOpps” posted awards on their website, and
GenTex’s account executive had checked the award amount for the helmets.
“First off, we’re not letting you make twenty-three thousand dollars, when
we’re breaking even.” Right then I knew GenTex was willing to do the deal;
provided they thought I wasn’t making a profit.
“Come on, we both know I’m not making twenty-three grand; I’ve
gotta pay for financing, shipping, employees, overhead...” I added a slight
tremble to my voice, as if I might break down, “I’ve got a kid in college,
my wife’s outta work, if I default on this contract, I... I... I don’t know what
I’ll do...”
“All right...” he said, struggling with the decision, “I’m gonna email
you a contract and I’ll deposit this... but this can’t ever happen again.”
After shipping and overhead, AEY, Inc. made a profit of roughly
$20,000 on the aviation helmets. I’d turned a loser bid into a winner
contract, and God, did it feel good.
I WAS TURNING five to ten percent margins into 20 to 25 percent
profits, sometimes more. It was a huge adrenaline rush, and I became
addicted to it, sometimes pushing the limits of what was legal, ethical, and
socially acceptable. But every warrior has a code. As deep in it as I got,
after people had taken multimillion-dollar chances on me, not one of them
got burned.
CHAPTER SEVEN
 LORD OF WAR
“There are over 550 million firearms in worldwide circulation. That’s one firearm for every 12
people on the planet. The only question is: How do we arm the other 11?” - Yuri Orlov, Lord of War
(Movie)

“Efraim Diveroli [from a young age] knew exactly what he wanted to be; an arms dealer… he loved
the arms industry’s intrigue and ruthless amorality… war criminals, soldiers of fortune, crooked
diplomats…mercenaries loaded with arms.” - Guy Lawson, Rolling Stone

IN JULY AEY, INC. WAS AWARDED A U.S. ARMY CONTRACT

for nearly $550,000 to supply the Iraqis with spotting scopes and tripods,
ballistic helmets, shatter-resistant safety glasses, portable GPS, and a dozen
other security-related items and accessories. It was a massive amount of
items, including 13,000 flashlights and 2,100 electric measuring tapes. I
was dealing with Harry Chang - a frail Chinese guy who owned KenDoo
Technology - and at the time I only semi-trusted him.
Chang had arranged for the acquisition of most of the goods from
several suppliers. I gave him a 30-percent deposit but insisted on inspecting
the merchandise prior to sending the balance. If anything went wrong I
couldn’t afford to lose the money or have it tied up in litigation - at the time
it would have crippled my cash flow. So I asked Rachel if she wanted to
come with me and Harry to China for a week.
“Seriously, Efraim...” squealed Rachel, “China?” I was amazed at how
much shit this tiny little girl had packed for the trip - three huge bags of
clothes. When I picked her up, I immediately thought, this was a mistake.
I’LL NEVER FORGET being at the Miami International Airport; I
was about to hand my suitcase to the baggage handler, and Chang said,
“Efraim,” he glanced respectfully at Rachel, “if someone were to get caught
transporting drugs into China - even a small amount of recreational drugs -
they would be shot and the People’s Republic of China would mail their
family a bill for the cost of the bullet.” Rachel glanced at me knowingly. “It
is that serious of an offense,” continued Chang, “and not even the United
States could stop it.”
I didn’t know what type of drugs Chang thought I had in my bag, but I
knew the little bit of weed I had, had to go. “Mister Chang, I’m going to
need to go to the restroom for a second.”
I wheeled my suitcase into the men’s room and flushed the Ziploc bag
of pot down the toilet.
THE FLIGHT TO HONG KONG (Fragrant Harbor) took 18 hours; we
landed at Kai Tak International Airport in Kowloon and took a crowded
underwater subway to Shenzhen, China - immediately north of Hong Kong.
Shenzhen is a coastal city located in a special economic zone set up for
foreign investment, foreign-owned joint ventures, business enterprises like
manufacturing electronics and textiles - stuff like that. The place was
concrete-and-aluminum factory after factory after factory... and hot like you
can’t believe. Surface-of-the-sun hot.
We stayed at this generic little hotel, and the first thing Rachel did was
order a kosher meal from a specialty delivery service - at $50 a plate.
“Seriously,” I said, “Kosher in China?”
“Yes, Efraim... you might not want to follow the commandments in the
Torah, but I do.”
The second thing she wanted to do was violate one of the
commandments of the Torah, by having pre-marital sex. But who was I to
call her a hypocrite?
The following morning, Chang and three of his associates - wiry
Chinese guys in their mid-40s - took me to the warehouse. It was dark and
dusty, packed with crates and pallets. I randomly opened several boxes and
checked the items and turned on a couple-dozen of the GPS pads -
everything worked and looked good, so I pulled out my cell phone and
called my bank in Miami. “This is Efraim Diveroli,” I said to my account
rep, then provided my account number and security code. “I need to have
two hundred and forty thousand dollars wired to the bank of Su-chou in
China (KenDoo Technology’s bank).” I was placed on hold and a couple of
minutes later the account rep gave me the confirmation number.
Around ten o’clock that night, Chang called to ask if I wanted to be
there when they loaded the containers. “Absolutely.”
It was hot and muggy at the warehouse, over 100 degrees, and it was
in the middle of the night. Chang and his associates had 15 skinny kids who
looked between the ages of 13 and 15 years old loading two 40-foot steel
cargo containers. I felt horrible for them. I’d had some shitty summer jobs,
but I’d never worked the midnight shift on the docks, loading cargo in 100-
degree heat and humidity.
“Efraim,” said Chang, “I’m not sure the boys will be finished loading
both containers in time to make the next vessel.” If we missed that ship, it
could be days before the container could be slotted for the next cargo
vessel. The shipment was already two weeks overdue; I had already wired
the money and needed to complete the contract.
“Fuck that!” I snapped - I had no intention of leaving China without
my merchandise being on a vessel - so I bent over and grabbed a box of
First Aid Kits. Chang and his associates looked shocked as I started helping
the child laborers load the cargo, but they didn’t help. The kids and I packed
both containers over the next several hours. When the steel doors were
finally bolted, I handed the teens a crisp twenty each - which must have
been the equivalent of several days’ labor because the look on their faces is
something I’ll never forget.
When I got back to the hotel, I was drenched in sweat and filth, and
smelled like body odor and cigarettes. Rachel shrieked, “Oh my lord,
Efraim, you’re disgusting!” But I didn’t care what she thought. That
shipment represented over a $150,000 profit, and at the rate our relationship
was deteriorating, she would be gone within a few months. Hopefully I
could make the money last.
Once I knew the containers were safely on their way, Rachel and I
headed to Hong Kong. We checked into the Mandarin Oriental Hotel, an
opulent Chinese palace filled with red silk and Wu school prints.
The city of Hong Kong was bustling with activity. It’s one of the
world’s most crowded places, with about six million people on less than 20
square miles of land. The urban center is packed with shops and open-air
markets, where merchants sell fresh vegetables, fish and poultry; luxury
high-rise buildings wrap around Victoria Harbor and line the narrow streets
crowded with top-of-the-line BMWs and Mercedes-Benzes - it really is the
Manhattan of the East.
We bought knockoff name-brand wallets and purses, sang at a Karaoke
bar in downtown Hong Kong, and visited Walt Disney World in Mainland
China - a “must see” as far as Rachel was concerned. But one of the coolest
things we did was take the sky trolley up Victoria Mountain. At the peak we
could see virtually all of Hong Kong. It was an amazing sight.
We bickered and picked at one another for most of the trip. In
Shanghai I bought a lamb-kabob thing in the shopping district and got
really sick - violently sick. I was sweating and shaking, while puking my
guts out in a garbage can. Rachel just stood there, hands on hips, tapping
her foot, making comments. “You don’t wanna eat kosher... this is what
happens,” and “It’s God’s will.”
She was void of sympathy. At one point, I thought, this chick must
fucking hate me. She was an Orthodox Jew and I was a born-again Pagan.
The relationship was doomed; we were just too young to know it.
NOT LONG AFTER I RETURNED TO MIAMI, Chang asked me to
meet him for coffee at a local cafe. Over lattes, he asked if I would be
interested in another deal, “A very lucrative deal,” he said. Chang knew I
had supplied AK-47 assault rifles to the U.S. Government, and he wanted to
know if I could get him 10,000 of them. “My clients are willing to pay one
hundred and thirty dollars per rifle. They’ll be going somewhere in South
America... I’m working on that now,” said Chang. “Nothing to worry
about.”
“Nothing to... Listen, I can’t just ship ‘em anywhere, flooding South
America with AKs. I need to make an application with the State
Department’s Directorate of Defense Trade Controls office, and to do that I
need an End User Certificate from the country they’re ultimately destined
for. Who are these for anyway? Maybe I can assist with obtaining the
necessary documentation...”
“They’re for the Revolutionary Armed Forces of Colombia.” He said
the name as if it changed nothing, like I’d be shipping them to Wal-Mart.
“But we can’t ship them directly to Colombia because…”
“FARC?” I chuckled nervously, “No, no, no... that’s a violation of
some serious fucking U.S. and probably international laws. That’s serious
prison time we’re talking about here, Mister Chang.” FARC was listed as a
terrorist organization by the U.S.; any attempt to supply them with arms
would be considered participation in a conspiracy to kill U.S. nationals.
Besides being 100-percent illegal, I had just supplied 500 K-3 machine
guns to the U.S. Embassy in Bogotá for the Colombians to combat the
narco traffickers and FARC. Plus I was friends with Carlos. “Mister Chang,
I’m on the other side of that conflict… absolutely not.”
 About a week later, Chang called my cell phone. “They’ve got
someone in the Peruvian military that’ll provide you with an End User
Certificate... very legal, yes.”
I could only imagine what that was going to cost him. Had he never
mentioned FARC I’d have gladly shipped the 10,000 AKs to the Peruvian
military, which was perfectly legal - I could have easily done that. Hell, I
could have forged the End User Certificate for Colombia and had FARC
pick up the AKs at the dock, but morally I just couldn’t, knowing they
would end up in the hands of the same narco terrorists the Colombian
Special Forces and U.S. were fighting. Plus, the possibility of a stiff prison
sentence certainly was a factor in my decision.
“Mister Chang I’ve got a buddy that works at the U.S. Embassy in
Bogotá, supporting the Colombian anti-drug forces... I can’t do it, sorry.”
“They’re willing to pay one hundred and sixty-five per rifle,” said
Chang. “That would be roughly a million dollar profit for you.”
Honestly, how close was I with Carlos? We had only met once. “No,
no, no! I can’t do it. I can’t provide weapons for both sides!” I laughed.
“I’m not the Lord of War...”
IN EARLY 2005, I moved into the Executive Condominiums in Miami
Beach, a historic building built in the early 1920s where the famous
mobster, Meyer Lansky, once lived. I was working out of my apartment,
doing really well, but the paperwork was just getting to be too much. I
couldn’t keep up with all the banking and accounting. I brought in my aunt
Julie to handle the dizzying array of filing and organizational office work.
She is this recluse, without anyone in her life, and a constant pain in my ass.
Aunt Julie kvetched and moaned all the time about anything and
everything. She was scared of her own shadow and thought everything was
a conspiracy and everyone was out to get her - and me. She was
superstitious, visited psychics, and was constantly doing tarot card readings
in the office - a real nutcase. But, I know her heart was in the right place, I
love her to death for it, and always will.
“You’re gonna crash and burn, nephew,” warned Aunt Julie constantly,
“It’s all gonna come crashing down, trust me.”
She tracked my every move. If I went out clubbing or came into work
stoned, Aunt Julie would yell at me. She tried to keep me on a short leash,
but it was useless. I didn’t listen to her. I was making millions and could
care less what she thought.
 RACHEL AND I DIDN’T EXACTLY BREAK UP. She just couldn’t
put up with my work schedule and drug use. She gave me an ultimatum and
stopped calling.
I was pretty broken up about it; she was my first real girlfriend. About
a week later, I was getting drunk on Jose Cuervo with Jon, whining about
how I’d never find someone like her, never feel that way again, never be in
love again - crying the first love blues.
We had just finished the bottle when Jon said, “Fuck Rachel! She
cheated on you anyway, dude.”
“No,” I replied, thinking he was just trying to make me feel better,
“she was a good girl, I fucked it all up. She deserved better and she knew
it... I’m a maniac.”
“Bro,” he sighed, finishing off his glass of Cuervo, “She tried to make
out with me at a party a couple of months ago.”
Five minutes later - drunk and distraught - I drove my car over the
curb of Rachel’s parents’ yard and onto their lawn. I stumbled out and
started banging on her bedroom window, crying and screaming about how
much I loved her and how she had ruined my life. Looking back, it was a
pathetic scene, which I will forever be embarrassed about.
Rachel came to the window and yelled, “Go home, you’re drunk!” Her
mother yanked open the front door with the phone in her hand and
screamed, “Efraim, I’m calling 911… leave!”
“You’re not calling anyone,” I yelled, “It’s the Sabbath!” When her
mother started dialing I realized she wasn’t fucking around, and I slinked
back to my car and drove off.
A MONTH LATER, I had forgotten all about the incident when I was
served a summons to appear in court for a hearing on Rachel’s petition for a
restraining order. I delayed the proceedings several times, but when I
eventually had to appear in court Rachel didn’t even show up and the entire
case was dismissed.
I’ve never actually broken up with a woman. Typically, I drive the
relationship into the ground, and then I just stop calling her or she stops
calling me. I would cheat or would get so busy I’d forget to show up for
dates - no woman is going to put up with that for very long. My
relationships don’t end amicably so much as they implode.
IN NOVEMBER OF 2005, I went to a college dinner party in a South
Miami neighborhood at a Rabbi’s house with an old acquaintance from the
neighborhood, David Packouz. We were only going in the hope of meeting
some girls. I had known Packouz since I was 14-years-old; he was on the
fringes of a group of guys I used to hang out with, getting high. He struck
me as a narcissistic wannabe pop star, with a shaved head, zero confidence,
and even less talent. He wasn’t doing very well, as far as I could see. We
started talking - catching up.
Packouz was working as a massage therapist; I got the impression that
for an extra $50 he’d give his clients a happy ending. But he must not have
been very good at that either, because he was dead broke. Packouz was
driving a rusted-out Mazda Protégé and living in a shitty efficiency in a
rough area of Biscayne Bay - nowhere near the beach.
I had just completed a $3 million contract to sell AK-47 assault rifles
to the Department of Defense to supply the Iraq Security Forces, and yeah, I
was probably bragging about how much I loved the arms business - the
adrenalin involved in putting together deals, and, of course, the money.
Packouz was acutely interested. He’d already done some online
business himself, buying linens from textile companies in Pakistan and
selling them to distributors in Miami, but he wasn’t dealing with anywhere
near the sums I was dealing with.
HE ASKED ME what kind of money I was making. “Dude, if you had
to leave the country tomorrow, how much would you have… cold hard cash
in the bank right now?”
“One mil’, eight hundred thousand,” I replied. “In cash.”
“Dude.” Packouz wanted in immediately. He started following me
around like a stray dog - hounding me until I let him in. So I printed up
1,000 business cards; listing my old buddy as an “Account Executive,” and
let him start hanging around. He was working strictly on commission.
I liked Packouz, but after a couple of weeks, I realized he wasn’t
aggressive or proactive enough. In sales, especially when you’re dealing
with the military or weapons and munitions manufacturers, you’ve got to
push all the time: call distributors, email manufacturers, and visit
wholesalers. Be polite and professional, but always apply pressure.
I would tell Packouz, “Make sure to fax that quote over before you
leave, we need if for the bid next week.”
“Bro,” he would reply, “they’re not going anywhere. I’ll do it
tomorrow.”
 Packouz couldn’t seem to grasp the concept of high-pressure sales or
business decorum. Whether I was drunk, half-baked or coked up, I was
always professional, and I never stopped applying pressure - he just
couldn’t get it. He wasn’t a closer.
CHAPTER EIGHT
 THE SHIKSA
“The faint of heart never won a fair lady.” - General George Armstrong Custer

PACKOUZ AND I MET FOR DRINKS AT PURDY LOUNGE. It

was a trendy dance bar that played contemporary hits, from reggae to hard
rock. Lots of skinny jeans and miniskirts, tramp stamps and fuck-me
pumps. Dim lights and loud music. It was constantly filled with women
drinking shot after shot of whatever the guys were buying them, and
washing them down with giggles and hair flips - my kind of place.
Purdy was a great place to pick up girls. I was shameless in my
approach with women, hitting on them one after another. I’d be flirting with
a sorority girl, and the moment I saw she wasn’t interested, I would start
chatting up her friends; if that didn’t work out, I would turn my charms on
the next blonde or brunette who walked by.
“My God, Efraim,” chuckled Packouz, after witnessing my systematic
approach to meeting women. “You must get turned down all the time...”
“Yeah,” I responded, “but I pick up a lot of women; and I’ll leave here
with someone tonight.” I wasn’t interested in relationships; I was interested
in one-night stands. I worked all the time, dawn to dusk. If my failed
relationship with Rachel had taught me anything, it was that I wasn’t dating
material.
That’s when I noticed this chick at the bar. Jenna was a 23-year-old,
half-Chinese/half-white girl from Ohio, five foot three inches, and 120
pounds. She had a Panda bear-like face and a La Bre - a little metal-ball
face piercing - between her lower lip and her chin. She said she was an
“Adjunct Professor” at Florida International University - a glorified
teacher’s aide. Jenna was more sexy than hot; she liked to act nouveau riche
- without the new money. She was trashy - a dirty curvy porcelain doll - and
the strange thing is I couldn’t get enough of her.
I APPROACHED HER AT THE BAR and ordered another round of
“Whatever she’s having.” The bartender handed Jenna another Cosmo, and
she told me, “Danke.”
“Okay...” I replied.
“What, you don’t speak German?” she said, with a flirtatious attitude.
“It means thank you.” Jenna thought she was the “it” girl, and to me... she
was.
I asked her, “Do you wanna party?”
“Sure,” she shrugged, and then Jenna glanced at Packouz, who was
hitting on some sorority girl and said, “You know, your friend over there?
You know he’s a douche-bag, right?”
“Yeah,” I laughed. “But he’s good for a laugh.”
We did a few lines in the restroom, and she asked, “How old are you?”
“Old enough.” We had a dozen shots at the bar and danced for a couple
hours. By the end of the night, we were sitting in my new Saab talking and
making out. I was hooked on this chick. She was uninhibited - nothing like
Rachel.
I CALLED JENNA THE NEXT DAY and asked her out. “Efraim,”
she said, “you seem like a nice kid, and I had fun the other day, but I’m
seeing someone.” She was dating some guy in the Coast Guard.
“Well, I won’t mention our date to him.”
She giggled, “I’m sure you won’t... Where do you wanna go?”
We went to Sushi Siam, a nice sushi bar in South Beach. Over tempura
and sashimi - and a whole lot of steaming hot sake - Jenna and I flirted. She
asked, “What do you do for a living?”
I got the impression that Jenna was the tree hugging, save the whales,
feed the children type, so I went with my generic “I’m a government
contractor” response. “A salesman, really.” And she dropped it.
We ended up back at her place, a cookie-cutter apartment with cheap
carpet and chipped Formica counters. I noticed a book bag on the kitchen
table with a patch on it that read, “Arms Are For Hugging,” and another one
that had an arrow pointing to her side that read, “These Are All The Arms
We Need” plus a peace symbol. I thought I might want to hold off on
mentioning the international arms dealer thing. We were on her couch
making out, and I wasn’t trying anything - just some heavy petting and a
little tongue... I was totally slow-playing her. I didn’t want to pressure her,
she had a boyfriend and - she was older than me, so I was nervous.
Around a week later, on our third “date,” Jenna and I were at her
apartment, and I made my move. We were kissing and I slid my hand
between her thighs. “You have a condom?” I asked, “‘Cause I don’t, but
enough is enough.” I looked at her bedroom door. “We’ve gotta do this...
now.”
Jenna said, “Finally.” I couldn’t believe it - I had been taking my time
and it turned out she was ready to go all along.
A minute later she had her top off and I pulled off her Victoria’s Secret
thong and bra. She yanked at my belt-buckle as I yanked off my shirt, and a
second later Jenna was on her back with her legs wrapped around my waist,
her stilettos digging into my ass and thighs.
Jenna grinded against me, dug her nails into my back and moaned,
“I’ve been wanting to do this since that night at the bar.”
After we had finished, lying on our backs and tangled in the sheets, I
said, “You gotta get rid’a the guy in the Coast Guard.”
Jenna stared up at the ceiling and sighed, “I know.” She broke it off
with her boyfriend the following day, and we started seeing each other
every night.
WE HAD BEEN DATING ABOUT A WEEK when I told Jenna I
loved her. I was that into her. We were walking her dog, a
Schnauzer/Poodle mix thing she called a “Shnoodle” named Oliver, and it
started raining - a light sprinkling. We stopped about a block from her
apartment, and started kissing and grinning at one another - the way couples
do when a relationship is new. That’s when I told her. She was soaking wet
and I just knew I was in love, and I had to say it, “I love you.”
She grinned, “I love you too.” I was so relieved; I didn’t even care
whether she meant it.
Within a month, Jenna had asked her roommate to move out, and I
moved into her 700-square-foot two-bedroom in the Greenwich Studio
Apartments. I turned the second bedroom into my office and started
working out of our apartment. Her little dog barked all the time. Ruff! Ruff!
Ruff! Even when we were sleeping together. In retaliation, I used to get
stoned and pop shots at it with my Airsoft gun. Jenna would scream, “Stop
abusing my dog, Efraim!” and I’d yell back, “It’s our dog now, woman!”
Jenna worked during the week, so she was gone during the day, while I
negotiated with suppliers and manufacturers. Every once in a while she
heard me discussing, “ten-thousand 5.56 mm” or “two-thousand helmets”
or “thirty-five-hundred GPS pads,” but I was careful not to discuss weapons
in front of her. I wouldn’t say I was hiding it; I just didn’t go out of my way
to throw it in her face.
She was more than just some chick I was dating; she was my partner in
crime and my best friend. I really liked this girl. I hesitate to mention this
next thing, simply because it’s so embarrassing, but I feel it adequately
conveys the depth of my love for Jenna: I was so in love that we actually
had pet names for one another. Because we both thought she resembled a
Panda Bear, Jenna was dubbed “Panda Bear,” and because I was bigger than
she was, she referred to me as “Big Bear” or just “Bear.” We even used to
introduce ourselves to other couples as “The Bears.” Isn’t that humiliating?
That’s how in love I was with this girl.
DON’T GET ME WRONG, our relationship wasn’t 100 percent bliss -
between my alcohol binges and drug-induced mania, and Jenna’s bipolar
mood swings, we had our problems. Her prescription of Zoloft wasn’t
exactly the medical cure her doctor had promised.
Screaming matches and breakups were common, and my mother was
always ready to pounce on an opportunity to remind me I was living in sin
with a shiksa. She would call me every time she got word of a disagreement
between Jenna and me. My mother would cry, “You’ve got to stop seeing
this... this shiksa! What if she gets - God forbid - pregnant!? Your children
won’t be Jewish... Your family will disown you. Disown you!” She would
scream, “Is that what you want!? Is that what you want!? “
The calls from my mother were a constant theme in my life. I would
put in a ten- to 12-hour day, grab my Pyrex water pipe, smoke some weed,
and listen to my mother’s voicemails. “Efraim!” she would say, “It must
have been me. I wasn’t a good mother. Oh Lord, what have I done? Why?
Why! I tried so hard to raise a good Jewish boy. Why did this happen to
me?!”
I WAS STILL PRETTY MUCH A ONE MAN OPERATION. My aunt
Julie was strictly a part-time assistant, taking messages, running errands,
and filing invoices. I worked out of Jenna’s apartment, but the money was
rolling in. My company was doing over $1 million in sales a month; I
needed help. I hired a Haitian exile named Ronald Ledain Didier off
Craigslist to be AEY, Inc.’s “Operations Manager.” The guy had no papers -
I had to pay him in cash every week - but he was a great employee, a true
soldier.
 After a month of working out of Jenna’s apartment, the place started to
get crowded; there were file cabinets in the dining nook, stacks of
paperwork on the kitchen table, and a fax machine and copier crammed into
the bedroom. It didn’t bother me, I liked working out of the place, but Jenna
and Ronald started giving me a hard time, so I leased a 300-square-foot
office on 41st Street in Miami Beach - a low-rent generic office complex
called the 925 Building. Eggshell walls and beige carpet.
JUST AFTER I OPENED THE OFFICE, in late December of 2005, I
surprised Jenna with a ten-day Royal Caribbean cruise. The Jewel of the
Seas was a massive, sleek ocean liner with over 500 rooms, half a dozen
restaurants, several pools, spas and saunas, and a huge rock-climbing wall.
The ship docked in Key West, the Cayman Islands, and Cozumel, Mexico.
In Key West, we pounded Margaritas and ate like pigs, but at Grand
Cayman we got massages and walked the cool coral beaches while holding
hands - Jenna always wanted to hold hands and kiss; she was very
affectionate, which I liked. We ate mangos and drank at a thatch-roofed
beachfront greasy spoon, frequented by tourists and surrounded by coconut
palms and banana trees. Jenna kept trying to pick up the tab, but I wouldn’t
let her - it was very cute. In her eyes I was just a 19-year-old boy who had
scraped together some money to impress his older girlfriend, and I let her
believe that.
We rode wave runners, swam, and scuba-dived in the clear blue waters
of the Caribbean among the tropical fish and coral reefs.
THAT NIGHT JENNA AND I were lying in bed in our suite, wrapped
in each other’s arms, staring out of the cabin’s sliding glass door at the Gulf
of Mexico. Jenna whispered, “God, baby, you’ve spent so much on this
trip... You didn’t have to do this for me.”
“It’s not a big deal.” I was exhausted. I had had too much sun and too
much alcohol.
“I’m serious,” she said, squeezing her arms around my waist. “It’s too
much.” I was driving a Saab and sporting a stainless steel Rolex
Submariner, but I was crashing at her place and I had never mentioned
money to Jenna. She still thought I primarily sold gasmasks and uniforms
for a living.
“It wasn’t a lot of money,” I responded, dozing off. “It’s nothing...”
But Jenna just wouldn’t let it go. “Still, you don’t have to spend all
your money on me.”
 “Jenna, this isn’t even the interest on my money,” I chuckled softly.
“I’ve got millions... go to sleep.”
She immediately pulled away from me, slid up onto her knees and
asked, “What did you say?” Jenna had dated a succession of less-than-
successful guys in the past, so it came as a shock that her teen boy-toy was
worth millions. Her naked body was lit by the moon’s bluish light; she
pulled a pillow over her exposed breasts and held it tight to her chest. “I
thought you were a contractor for the government?”
“Yeah, but, I’m a private contractor, not some civil servant eking out a
living, hoping to put in twenty-five and retiring on a thirty-grand-a-year
pension.”
THE NEXT MORNING WHEN WE WOKE UP, the ship was docked
in San Miguel de Cozumel, Cozumel Island, approximately ten miles off
the eastern coast of Mexico’s Yucatán Peninsula. It was jam-packed with
tourist resorts and surrounded by gorgeous sandy beaches. The brochure
said it had excellent fishing, boating, and scuba diving, but we didn’t do any
of that stuff.
Our first day in port was my birthday, and Jenna surprised me by
making a reservation for us to swim with dolphins in the clear waters of the
Caribbean Sea. They feel like rubber, by the way. The following morning
we took a short boat ride to Playa del Carmen on the mainland of Mexico
and rented a white 1970s VW Beatle. I couldn’t drive stick, so Jenna drove
us to the Mayan Chichen Itza; an ancient city founded in the 6th century,
deep in the south-central jungle of the Yucatán.
AT CHICHEN ITZA, the “Mouths of the Wells,” we took a tour of the
remarkable limestone ruins of the Temple of the Warriors, the massive ball
court where the Mayan’s played tlachtli for their lives and the lives of their
families - these were serious gamblers. We were looking into the deep
blackness of the cenotes (wells), when the tour guide told our group, “The
cult of the cenote sacrificed young children along with gold and jade
ornaments, by throwing them into the darkness of the wells.”
I looked at Jenna and whispered, “The kids I get, but the gold?”
An hour later we were climbing the tall Castillo (the great pyramid)
when I got a call from a contracting officer in Baghdad, regarding an order
of PKM machine guns for the Iraq Security Forces. The conversation was
brief, but Jenna definitely overheard me say, “machine guns.” We reached
the top of the great pyramid - dripping with sweat - sat on the edge of the
limestone cap, and looked out over city’s ruins. “So,” asked Jenna, “what
type of stuff do you sell to the government?”
I knew the answer was a potential issue for her, depending on her
convictions at the moment. Jenna proclaimed to be a vegetarian, but she
typically ate half my steak. She was supposedly “done with drugs”, but was
always asking for a bump of coke or a hit from my joint. It was impossible
to predict how she would react.
“All kinds of stuff, I’ve sold uniforms, bomb suits, radiation detection
equipment…”
“Huh,” she looked skeptical. “What do you sell the most of?” She
cocked her head to the side and took a sip of the Stolichnaya and lime that
I’d filled our mineral water bottles with earlier that morning.
“Well... that’s hard to say, I... I do occasionally sell weapons and
munitions to the Department of State and Homeland Security...” I shrugged,
“and the Army.”
Jenna glanced at me. “Are you an arms dealer?” She held her hands up
to her mouth, “I can’t date an arms dealer!” but she didn’t sound all that
convincing.
“Well yeah, but I’m on the good guys’ side: freedom, democracy, and
all that. I’m a patriot.”
“Uh huh,” she grunted, unconvinced. “And it pays well, right?” As
principled as Jenna wanted to be, she wasn’t going to leave me. I was a 19-
year-old multi-millionaire - weapons of death or not, she wasn’t going
anywhere.
I HAD STEADILY DRAINED my mineral water bottle throughout the
day and most of Jenna’s; so I was fairly intoxicated by the time we got back
to the VW Bug, and I insisted on driving back.
“Efraim,” said Jenna, “you’re drunk and you don’t even know how to
drive stick.”
“So teach me.” It was a catastrophe. I was grinding gears and burning
the clutch all the way down the highway. Eventually I broke something and
the little Beetle ground to a halt on the side of the interstate.
Jenna and I thought it was pretty comical that I’d broken it, until the
cops showed up. They could see I was drunk. The taller of the two made the
universal drinking or drunk sign, tipping his hand to his mouth. “Drinky,
drinky,” he said in a thick accent, “No good. No good.”
 I looked at Jenna and back to the Mexican officers in confusion,
“Drinky? I’m not drunk; what’re you talking about?”
What I liked about Mexican law enforcement was their directness.
After giving me the onceover and making a couple of comments about
“drunk driving” and “jail,” they flat out said, “You pay fine now... No go to
jail.”
“Not a problem,” I laughed. “How much are we talkin’ about?” I
pulled out my wallet and started peeling off greenbacks until we agreed on
an amount - around $200. I shoved the money in the cop’s hand and said,
“Now, you’ve gotta tow us back to Playa de Carmel. Pronto! Our ship
leaves in an hour.” We actually had five or six hours, but they didn’t need to
know that.
The Mexican officers griped a little, but they eventually pulled - honest
to God - a green garden hose, out of their cruiser’s trunk and tied it around
both of our vehicles’ bumpers. I climbed back behind the wheel and they
towed us back to the rental company’s lot, with Jenna and me laughing the
whole way.
A WEEK OR SO AFTER WE GOT BACK from Mexico - in late
December - my aunt told me what AEY, Inc.’s final numbers for 2005 were.
My company had delivered over $7.3 million worth of goods to the
Departments of Energy, Defense, Homeland Security, and even the
Environmental Protection Agency, in addition to nearly $9 million to the
U.S. Army for the Iraq Security Forces.
I was in love with a great girl and making millions - life was good! I
went out and leased a black Audi Quattro A6, with a V8 power plant, black
leather interior and a ten-speaker stereo. It was modern and luxurious. And
then you know what I did? I went right back to work. Because that’s what I
do!
CHAPTER NINE
 SIN CITY BABY!
“God made man, but Samuel Colt made them equal.” - Colt Manufacturing advertisement

IN JANUARY OF 2006, I went to the annual SHOT (Shooting

Hunting and Outdoor Trade) show in Las Vegas, Nevada. The place was
awesome, strip clubs and casinos 24/7 - who doesn’t love that? Everything
in Vegas is bigger than life and wrapped in neon. We stayed at the MGM
Grand Hotel and did a little gambling in the casino.
The expo was held at the Vegas Convention Center; it was the mecca
of the gun business, and all the industry’s heavyweights attended; I actually
met Gaston Glock, the owner and founder of Glock Pistol Company. It was
pure Vegas, lots of glitz and glamour. There were gorgeous models strutting
around with automatic weapons, wearing nothing but Kevlar body armor
and black thongs - guns and ammo porn. Every major domestic
manufacturer and dozens of foreign companies were there exhibiting their
products; Knight’s Armaments was showing off their 7.62 mm SR-25 semi
auto sniper rifles, Bushmaster was pitching their AR-15s, and ATK was
marketing their flagship Federal ammunition line.
That’s the first time I met Heinrich Thomet in person. He’d been a
crucial supplier on several Iraq deals, but we’d never met. Heinrich was a
tall, polished Swiss German in his early 40s, with typical German features -
light brown hair and the piercing blue eyes of an Aryan. He wore nice
expensive suits and had a pretty girl by his side, his assistant Amanda
today.
Heinrich had been in the business since he was my age and had
connections all over the globe - especially in Central and Eastern Europe.
Heinrich knew King Abdullah of Jordan and the notorious international
arms dealer Viktor Bout - the man known as the “Merchant of Death.”
Amnesty International had accused Heinrich of smuggling weapons
out of Zimbabwe - a violation of U.S. sanctions. He was currently under
investigation by the Central Intelligence Agency and the Defense
Department Intelligence Agency for shipping weapons and APCs (Armored
Personnel Carriers) from Serbia to Iraq. He was an amazing character who
had supplied weapons to dozens of countries’ militaries and rebel armies.
He’d done it all... Heinrich was a real live Lord of War; I wanted to be just
like him.
Heinrich and I were in the middle of completing a bid on a Department
of Defense contract for 650 APCs (Armored Personnel Carriers) that also
had to meet MPV (Mine Protected Vehicle) specifications, making them
impervious against IEDs (Improvised Explosive Devices). We were
essentially looking for armored personnel carriers with mine-resistant
features. Heinrich insisted he could get the spec vehicle made by a large
state-owned manufacturer out of India. “Efraim,” Heinrich said, with a
slight German accent, “they can deliver - no problem... Very solid
government company, okay.”
The initial order called for five prototype or sample vehicles; once the
Army inspected them, the lowest bidder would be awarded the contract for
the remaining 645 APC-MPVs. AEY, Inc. had bid out each vehicle at
$230,000 per. “And you’re sure they can deliver ‘em for one hundred and
ninety thousand?” I asked Heinrich. That was a $26 million profit to AEY,
Inc. after Heinrich’s cut.
“Yes, Efraim... have I ever let you down?” He hadn’t. Up until that
point, Heinrich had consistently delivered on every order - late - but he
always delivered. However, within several weeks, Heinrich’s “solid
manufacturer” was making excuses and missing deadlines on the delivery
of the initial five APC-MPVs. They couldn’t meet the Army’s MPV
specifications. It was a nightmare... Heinrich kept saying to give them more
time, “Next week, next week.” by the time I realized they couldn’t do it, it
was too late to get another manufacturer. It was the first time Heinrich let
me down and cost me tens of millions of dollars in potential profit in the
process. The incident also seriously jeopardized my standing as a
government contractor and exposed me to massive re-procurement fees and
other damages related to AEY’s default.
THE FALLOUT FROM THE APC-MPV deal almost sank me. I got
several nasty letters from the Director of the Indian company, threatening to
sue me for their research and development costs, even though I didn’t have
a contract with them - Heinrich supposedly did - and it was their delays that
caused AEY, Inc. to lose the APC-MPV contract.
 As soon as the Indians realized they didn’t have a case, the Department
of Defense started threatening to go after AEY, Inc. for their re-procurement
and administrative costs. I ended up getting off with a non-performance
notation of AEY, Inc.’s record, which could have affected our contractor
statues, but it didn’t seem to.
I KNEW JENNA WAS REALLY IN LOVE WITH ME in early 2006;
we’d been out all night dancing and partying with her friends Farren, Jacky,
and Christina. I had been drinking vodka and snorting coke most of the
night. When we got back home, Jenna and her friends headed to the kitchen
for ice cream, and I pulled out my Pyrex water pipe. I thought the weed
would help bring me down - level me out... and it did. I passed out on the
couch, drool running down my face. Twenty minutes later I woke to a
discussion, between Jenna and her friends - about me.
“You can’t be serious about this guy,” said Farren. “He’s a maniac,
Jenna... look at him.”
“She’s right,” agreed Jacky, who was no lightweight herself. “He is out
of control.”
“I know, but I can’t help it... I’m in love with the kid.” That was when
I was 100-percent sure she was hooked.
MY MOTHER WAS STILL CALLING. “Please Efraim,” she would
cry into the phone. “Your aunt says this girl is Chinese... What are you
thinking?”
“Half-Chinese ma’… they make some excellent stuff in that country.”
“Why are you doing this to your mother? Why? Why!” The calls never
ended. My mother would rather I be a serial killer and married to a Jewish
woman with five kids in Hebrew school, than a multimillionaire
businessman dating a shiksa. That’s just the way it is; if you’re not an
Orthodox Jew you wouldn’t understand.
“What do you want me to tell you, Mom? I like this girl. I mean… I
really like her!” That was irrelevant to my mother. What mattered - the only
things that mattered - were your religion and your family. Period.
CHAPTER TEN
 THE CITY OF LIGHTS
“I’m proud of my invention [the AK-47 assault rifle], but I’m sad that it is used by
terrorists.” - Mikhail Kalashnikov

IN JUNE OF 2006, I took Packouz and flew to France for the

Eurosatory. It was the world’s largest defense expo, held at the Paris Nord
Villepinte Exhibition Center.
I was headed to the trade show to find a supplier for weapons,
munitions, and parts to fulfill a subcontract I had accepted for a Lockheed
Martin subsidiary on behalf of the U.S. State Department to supply
weapons to several countries in Africa, specifically Chad, Niger, and
Liberia.
It was midnight when we arrived. As the Boeing 747 banked toward
the runway at Charles de Gaulle International Airport, I got an aerial view
of the Eiffel Tower lit up by the Parisian floodlights. It was an awesome
sight.
YOU OFTEN HEAR THAT PARIS IS ONE OF THE MOST
BEAUTIFUL CITIES IN THE WORLD. It’s absolutely true. The city is
littered with landscaped parks and lush gardens, chestnut trees line the
grand avenues, and there are beautiful women with sexy accents
everywhere. Everywhere! It’s also called the city of lights: At night,
floodlights illuminate Paris’ historic monuments, the Cathedral of Notre
Dame and the Arc de Triomphe. I immediately loved the place.
AT THE NORD VILLEPINTE EXHIBITION CENTER, there were
hundreds of arms manufacturers displaying their latest weapons. We were
totally stoked to be there. The auditorium was enormous - polished concrete
and marble, track lights and Beethoven. Eurosatory made the Vegas SHOT
show look like a flea market. These clients weren’t buying for gun stores
and pawn shops; they were generals and Defense Ministers buying for
armies. We were in the heart of the international defense industry, shaking
hands and making contacts with state owned arms enterprises like Serbia’s
Yugoimport and Romania’s Rohmtehnica. There were booths from every
major weapons manufacturer imaginable, marketing everything from
Russian tanks and Swedish missiles to high-tech Israeli-made unmanned
drones. Svelte European models walked around just to decorate the place - a
far cry from the southern bells and corn-fed mid-western beauties in Vegas.
Packouz and I met Heinrich at his booth (Swiss BT International).
Heinrich had recently been placed on the State Department’s “watch list”
for potential illegal arms trafficking in August of 2006, but I didn’t know
that at the time. Given his issues with the international community and the
United States, Heinrich was eager to work with AEY, Inc.; using my small
company to legitimize his operations, Heinrich could buy and sell arms
without fear of being harassed by U.S. and International law enforcement.
AEY, Inc. had recently won an Army Mini Compete to provide 30,000
AK-47 assault rifles to the Iraqi Security Forces.
The Avtomat Kalashnikova Assault Rifle Model 47 (AK-47) was
designed by Mikhail Kalashnikov in 1947 and is by far the most popular
military assault weapon on the planet. Its distinctive curved magazine and
wooden pistol grip are recognized throughout the world. The AK-47 assault
rifle is reliable, simple to understand, and easy to operate. It works in any
environment, is easy to manufacture, and can be assembled and
disassembled with little instruction.
The AK-47 was a mutation of the assault rifle concept: a rifle with a
high-capacity magazine and selective firing. With the flip of a switch, the
rifle can be fired in either semi or fully automatic modes. A perfect blend of
performance and economics. Joseph Stalin’s Soviet Union may have
crumbled, but the estimated 100 million Kalashnikov assault rifles
manufactured in a variety of countries live on.
Heinrich had quoted a price of $75 per AK. “Come on Heinrich,” I
complained, “I’ve still gotta ship ‘em to Baghdad; I’m breaking even at
seventy-five... I’m thinking sixty-five.”
Heinrich grinned, he knew AEY Inc. was charging the U.S. Army $99
apiece, just as I knew Heinrich was buying the AKs from the Bosnians for
roughly $60 per. We negotiated back and forth for several minutes, while
Packouz stood behind me nodding his bald head in agreement with
everything I said - the guy was useless. I got Heinrich down to $70 per;
netting AEY, Inc. a profit of just over half a million dollars.
 THAT NIGHT, HEINRICH AND I were at the bar in his highbrow
hotel. It was spacious and opulent, teeming with gorgeous wannabe trophy
wives and the industrialists and investors hoping to bed them. I was chatting
up an attractive heroin-chic brunette at the bar.
My cell phone kept ringing and ringing, over and over. Jenna was on a
rampage, leaving voice mails and text messaging her usual threats. “If I find
out you fucked some French euro-trash whore we are over!!! Answer your
phone!!!” I laughed when I read the messages. It was a fairly common
occurrence when I traveled without her, which was most of the time. If I
didn’t answer my cell she would text me, threatening to break up if I didn’t
call immediately. We were constantly splitting up and getting back together.
She always assumed I was cheating on her - and I was. But in my defense, I
feel I was sexually oppressed by my Orthodox upbringing. Plus, I was
typically halfway around the world and multiple time zones away... fidelity
seldom survives distance and time. I wasn’t planning on sleeping with some
French girl anyway; I was working on an Italian diplomat’s secretary.
Besides, Jenna wasn’t going to break up with me - I was flying her into
Paris the following day.
The Italian was drinking Malibu and Diet Coke, sucking on a Davidoff
cigarette, and giggling at virtually everything I said - she was a sure thing.
“So what brings you to the City of Lights?” she asked, blowing a stream of
blue vapors into the air.
“The Eurosatory Expo,” I said, “I’m a defense contractor. I provide
weapons and munitions to the U.S. and its allies like Iraq, Colombia,
Niger... primarily to their security forces and U.S. Special…”
She leaned back slightly and said, “Wait a minute.” Her smile faded
and she looped a dark strand of hair behind her ear, as the negative
connotations associated with international arms trafficking washed over her.
“So you provide the weapons men use to kill one another?”
“Well...” I tried to put a positive spin on it, “well, yeah... but I do it at a
profit.” Humanitarian? Maybe not, but I was driving a brand new Audi and
wearing Ermenegildo Zegna suits.
THE DAY AFTER EUROSATORY, Jenna arrived. She was like
bottled energy, snapping pictures of everything. We stayed at a five star
boutique hotel, traveled to the Champaign region and took private tours of
the Dom Perignon and Mumm wineries - French castles in the Chambord
region - and had a top-shelf champagne dinner at Circe De Soleil.
 BACK IN PARIS, we went to the Louvre. The infamous museum is
housed in part of a huge palace that was originally built as a fortress in the
12th century. The complex’s ground-level entrance is situated in the center of
the Coeur Napoleon, and is crowned by the controversial steel-and-glass
pyramid designed by the American architect I.M. Pei - which I thought was
a very cool modern touch. The museum’s collection is one of the richest in
the world, with art from all periods of European history.
Jenna and I meandered through the miles of immense galleries with
high vaulted ceilings and marble floors gleaming with light flooding
through the enormous windows that lined the gilded walls. The place was
amazing. I never appreciated art until I went to the Louvre. We saw
Picassos, Renoirs, and Rodins. The Mona Lisa was... fascinating, with her
“life like” features and a mysterious smile. There was something behind
that grin. But what struck me the most about the genius of da Vinci’s work
were his engineering sketches: mechanical wings and helicopters. Red
chalk schematics of tanks and artillery, military equipment that wouldn’t be
invented for another 500 years.
AT THE ARMLESS SCULPTURE of the Venus de Milo, I leaned in
and whispered into Jenna’s ear, “Wanna do it in the men’s restroom?” It was
the type of thing she loved to do. Sex in public places got her “hot.” We had
had sex in cars, restaurants, next to the pool at our apartment, the dressing
room at the mall, and once in the restroom at Ripley’s Believe It Or Not
museum in Key West.
Seconds later, I had her wedged into the corner of a toilet stall, Jenna
with one high-heel on the toilet paper dispenser and the other on the rim of
the bowl. Her leather mini-skirt was hiked up around her waist and my
Diesel jeans were wrapped around my ankles; our pelvises bumped and
pounded away at each other, as Jenna’s G-string slid down her thigh with
every thrust. Jenna’s hair smelled like perfume and pot, and the room
smelled like disinfectant. She bit my neck, dug her nails into my back, and
moaned, “God this is so hot... It’s, it’s...”
“It’s like a work of art,” I whispered and we both grinned. I thrust into
her and Jenna squealed, then she started moaning louder and louder, even as
men were entering and exiting the restroom. I placed my hand over her
mouth several times trying to quiet her down, but I only managed to smear
lipstick across Jenna’s face. I flushed the toilet repeatedly, trying to drown
out her theatrics, but she just moaned even louder. I couldn’t help but
wondering how disappointed my mother would be if I were arrested in
France for nailing my shiksa girlfriend in a restroom at the Louvre. I could
hear sinks running, toilets flushing, and people making comments just
outside the stall. But I never stopped thrusting away at her, and there was
nothing I could do to shut her up. I ran my hands through her sticky hair-
sprayed locks - she groaned, “God, yes!” Someone just outside the door
coughed - startling me - and I stepped backward. Jenna slid down the wall,
and her foot slipped into the toilet bowl full of blue cleanser.
“Shit!” she said, hopping around the toilet stall on one pump, her
panties and second pump in the blue water of the toilet bowl.
Laughing, I exited the stall door to a restroom full of scowling patrons.
She was a real mess. I zipped up my fly and tried to regain my composure.
The other restroom occupants were visibly disgusted by the crass
Americans’ behavior. Who could blame them? When Jenna hobbled out of
the stall, tugging at her mini-skirt, and holding a blue pump dripping
cleanser, I started laughing again. Jenna ignoring the horrified men standing
around gawking at her, looked into the restroom mirror, saw the crimson
lipstick smeared across her face, her hair twisted into a mess, and
screeched, “Efraim! Are you serious?”
THE NEXT DAY, JENNA AND I took a boat tour down the Seine
River; curving through eight miles of Paris, drifting by the Grand Curving,
the Obelisk of Luxor, and the Cathedral of Notre Dame. It was the first time
in two years I can remember truly relaxing. We ate and talked about the Arc
de Triomphe and the Place de la Concorde, where King Louis XVI and
Marie Antoinette were executed via the guillotine.
Later that day we visited the Eiffel Tower, drank Premium Cognac,
and smoked Parliaments. We fell asleep in the Champ de Mars Park,
underneath the massive structure’s steel and iron girders and beams... It was
an amazing day. Jenna and me sleeping underneath the Eiffel Tower - that
was my best day.
I COULDN’T GO TO EUROPE without dropping by the Dam of the
Amstel. Jenna and I flew into Schiphol International Airport in the capital
of the Netherlands, Amsterdam. The city’s canals and attractive building
help make it one of Europe’s most charming cities. We held hands and
walked the narrow pedestrian streets, admired the handsome mansions and
churches dating back to the Middle Ages, and visited the Van Gogh and
Madame Tussaud’s Wax museums.
 We toured the office building where Anne Frank and her family hid in
a secret annex during the Nazi occupation of the Netherlands. With the aid
of food and other supplies smuggled in by Gentile friends, the family hid
for over two years until the Gestapo discovered them. They were sent to
Auschwitz - only Anne’s father survived. As the descendent of Holocaust
survivors myself, it was an intense experience being there.
Jenna was very moved by her story and sympathetic to the Holocaust.
“I’m glad we came here,” she said, while we stared at a grainy black and
white photograph of the Frank family. “Someday I’ll be Jewish and our
kids’ll be Jewish.” My mother would kill Jenna before she’d let that
happen.
At the Grass Hopper Coffee Shop we ordered some of the strongest
grass I’ve ever smoked, right off the menu. I managed to get us kicked out
for asking the server if they sold ecstasy. “No,” snapped our German waiter
in this really thick Nazi-ish accent. “Ecstasy is illegal in Amsterdam! Get
out!”
“Are you joking? You’re kicking us out?” I said, shocked. “How am I
supposed to know it’s illegal?” There were junkies shooting up in the alley
next to the coffee shop.
We walked the narrow streets and drank European beer in a Red Light
District bar while watching a sex show, where the male performer literally
threw his female co-star four or five feet in the air and she landed on his
erection (very talented, very talented indeed). Dangerous stuff!
ON THE WAY BACK FROM AMSTERDAM, I was carrying an
Indian-made ballistic helmet in my carry-on bag that I’d picked up from a
vendor at the Eurosatory Expo. I had convinced the manufacturer’s sales
rep to give me the display sample. At first he refused to let me have it. So I
showed the salesman a copy of my Department of Defense contract, and the
signed DD250s proving I had already delivered over 20,000 similar helmets
at that time. I told him, “You want to give me that helmet sir, trust me,” and
he handed it over.
Unfortunately, when I was walking through U.S. Customs at JFK, I got
randomly selected for a screening. They asked me to step over to a stainless
steel table. I took off my shoes and opened my bag. It wasn’t a big deal
until the guy came across the helmet. The customs guy stopped cold. “What
the...?” He immediately nodded to his supervisor and I was instantly
surrounded by three customs agents. If the search wasn’t intrusive enough
before, it was about to get so now. They began meticulously inspecting
every document in my carry on. I had pictures of OG7 and OG7V rocket
propelled grenades, pamphlets on Israeli-made fully automatic weapons,
and manuals for Remington 700 sniper rifles. A plethora of literature and
photos of military hardware.
One of the agents grunted, “What is this guy... ah terrorist?”
“I’m a licensed fire arms dealer and a government contractor,” I
yelped, pointing to a photocopy of my federal firearms license lying on the
table - along with everything else in my bag. They ignored me and kept
rummaging through my things.
Another agent glanced at me and snorted, “How old are you?”
“Twenty, going on fifty.”
It took roughly two hours before I was released. And from that point
on, I was detained every time I passed through U.S. Customs. Sometimes
they would handcuff me and stick me in a holding room for an hour; other
times they would photograph me and make copies of all my paperwork. It
got so bad no one wanted to fly with me.
CHAPTER ELEVEN
 PATRIOTISM AT A PROFIT
“An army is a team. It lives, eats, sleeps, and fights as a team. This individual stuff is a bunch of
bullshit.” - General George Patton

THINGS DIDN’T ALWAYS GO ACCORDING TO MY “MASTER

PLAN.” I had received several emails from Richard Emmert, a Quality
Assurance Representative complaining about the latest round of helmets
AEY, Inc. had supplied the Iraqi Security Forces. One of Emmert’s emails
stated, “The helmets have peeling paint and a few appear to have been
damaged such as having been dropped... I put them in the rejected
category.” Another email was slightly threatening. “The concern was that, if
[the helmets] break and crack, are they ballistically correct? In other words,
will they stop a bullet and what do we do if they don’t? Several scenarios
were being planned for you, none of them pleasant.” In defense of
Emmert’s aggression, the guy wasn’t a diplomat or a politician; he was a
soldier, and they tend to be abrasive.
Due to the air shipping, a couple dozen of the 10,000 helmets had
arrived with peeling or chipped paint. Not all 10,000, only a couple of
dozen, and AEY, Inc. was in the process of arranging to have the helmets
replaced when I received a call from Emmert. “We’re not sure these
helmets are even ballistic rated,” grumbled the Army rep. “You know they
were made in China, right?”
“So is everything in Wal-Mart, Emmert - including my girlfriend - they
make excellent products in that country,” I retorted. “Listen: pop one of the
helmets with your Beretta nine millimeter. If it penetrates it, I’ll take back
all ten thousand of ‘em and you can terminate the contract... and you don’t
ever have to do business with me again.” That’s how sure I was the helmets
were bulletproof.
The following morning Emmert called me back. “I fired three rounds
into one of the helmets, at three meters,” he said, sounding slightly
defeated. “Not one round penetrated... They’re ballistic all right. I signed
the DD250 Material Inspection and Receiving Report, we’re good to go,
Mister Diveroli.”
ANOTHER TIME, HEINRICH seemed to have gotten me an amazing
deal on 10,000 Italian Beretta 9 mms - $190 apiece. That’s a $450 pistol,
retail. I worked out a deal with the Army to order all 10,000 at $2.3 million
under my $51 million IDIQ contract. The deal netted AEY, Inc. a $400,000
profit.
Initially, the problem was that the Italians wouldn’t release the
weapons. “They’re saying the serial numbers aren’t right; they’re checking
the serial numbers,” explained Heinrich. “They think some of the Berettas
might have been used in organized crime.” In the context of Italy, that
probably meant they’d been used for contract killings or had “fallen off the
back of a truck” - stolen.
Eventually the Italians signed off on the draft End User Certificate the
Iraqis were prepared to provide them with, which is the document I needed
to obtain an export license allowing AEY, Inc. to export the Berettas from
Italy to Iraq. But then - I swear to God - the DHL plane went down
somewhere near Orio al Serio, Italy, killing the entire crew.
I didn’t believe it myself until Heinrich faxed me a letter from DHL
confirming the plane’s crash and the loss of the cargo.
‘[W]e must inform you that your shipment to Zagreb (Croatia) was on
our Airplane that crashed near Bergamo (Italy) on Oct. 31st at 10:10 PM.
In the course of this accident, all three crew members were killed, and all
the DHL shipments aboard were destroyed.’
Unfortunately, by this point the Army had heard so many excuses that
they didn’t believe anything I told them. “Bullshit!” said the Army rep.
“I’m going to file your ‘the plane crashed and burned’ excuse right between
‘the devil made me do it’ and ‘the dog ate my homework’.” They cancelled
the order.
I DIDN’T ALWAYS GET PAID ON TIME EITHER. Once AEY,
Inc.’s weapons and munitions were delivered, the receiver had to inspect the
products and sign off on them; in an active warzone, that doesn’t always
happen in a timely manner. Sometimes I had to improvise. I called a Quality
Assurance Representative in the Green Zone, the fortified ten-square
kilometer (3.9 mile) area of central Baghdad that houses the international
coalition presence in the city. I spoke with a lieutenant I had become
friendly with and complained about not receiving AEY, Inc.’s DD250
Material Inspection and Receiving Report. “Christ, Diveroli!” yelled the
Lieutenant, “I’m hiding underneath my desk right now, the insurgence have
been firing mortars into the complex for a week straight, we can’t even get
to the warehouse at Abu Ghraib to inspect the cargo.”
I could hear the sirens in the background and picture him huddled
underneath his desk, half a mile inside the concrete blast walls and
concertina-wire fortifications - he was exaggerating. “Well,” I said jokingly,
“someone’s gonna have to jump in an APC and head over there - I need to
get paid, Lieutenant.”
“My God,” he chuckled, out of disgust I’m sure. “There are mortars
raining down on us, the roads are lined with IEDs, and there are insurgents
with sniper rifles in the surrounding buildings, but you need to get paid?
You’re a ruthless bastard, aren’t you?”
“No sir,” I laughed, knowing how insensitive I sounded, “I’m a patriot.
Now act like you’ve got a pair and go inspect those AKs, so I can keep my
delivery schedule and help our country win this war.” And of course... make
a healthy profit while I’m at it.
“What’re you gonna do for me?”
“What would you like me to do... sir?”
“Jack Link’s Beef Jerky,” He said.
I had a plane landing in Baghdad the following week. “I’ll ship you
fifty pounds of it.”
“Don’t fuck with me Diveroli!” he snapped - serious as a federal
indictment. “I haven’t seen a piece of Jerky in ten months...” The lieutenant
sighed. “What about some Reese’s Pieces and Hershey’s Dark Chocolate
bars, and... a bottle of Jose Cuervo.”
“No sir, I can’t do Jose Cuervo. That stuff’s shit - wouldn’t put it in my
car, let alone my body,” I replied. “But you get those AKs signed off on in
the next two days and I’ll do two bottles of Patron.”
“Sounds good,” he laughed. “I’ll see what I can do.”
The following day the Army put together a convoy of six armored
Humvees, drove to the warehouse at Abu Ghraib, inspected the shipment of
Kalashnikovs and signed AEY, Inc.’s DD250. The following week I sent
him the provisions - including the Patron.
I REMEMBER ONE NIGHT around the time I completed the AK
deal, Jenna and I were taking a bath. I was smoking a Parliament and we
were both drinking wine. I was sleeping two or three hours a night and had
rings underneath my eyes; I was drinking or smoking weed to sleep and
doing coke to get me through the day. “This is killing you, Efraim,” said
Jenna. “Why don’t you get out?” I couldn’t get out: I was in love with the
adrenaline. It wasn’t even about the money - although that was part of it - it
was more about the thrill of the industry. “How much do you have right
now? If you walked away right now, how much?”
“Five, maybe five and a half million - after taxes.”
“Then get out.” She could see what I couldn’t: The arms industry was
helping to fuel my excessive nature, my ever-increasing desire for more -
more excitement, more alcohol, more drugs, more money, more of
everything.
But I couldn’t walk away; I loved it too much.
EVERY ONCE IN AWHILE my mom called just to check on me.
“So...” she would say, “You sound good.” We would make small talk for a
while - she would tell me how my brothers and sister were doing, talk about
her job; she might even ask how my business was doing - but she couldn’t
maintain her composure for long. “I suppose you’re still seeing the shiksa?”
“Who?” I would respond, feigning confusion, “You mean Jenna? Yeah,
we’re still dating. She’s fine... thanks for asking.” I knew my mother didn’t
care if Jenna was fine. In fact, if Jenna had been struck dead by lightning,
she would have taken it as a sign from God, but I liked to goad her until her
facade cracked - it didn’t take much. “She’s so sweet mom. If you met her I
think…”
“Efraim, why are you doing this? Why Efraim?! Why? Why! Oh God,
what did I do to deserve this?” It’s not an exaggeration: my mother is a real
drama queen. She would get so worked up I’d have to wait until she calmed
down or cut the conversation short or just hang up on her. Sometimes it was
all I could do.
IN MID 2006, our Boeing 737 lifted off from Miami International
Airport, en route to Puerto Vallarta, Mexico. Jenna and I were sitting in
first-class, she was drinking Diet Pepsi and I was reading a manual on
Knight’s grossly overpriced SR-25 semi-automatic sniper rifle, trying to
find an equivalent product for a Department of Energy solicitation on
“FedBizOpps.” Apparently the weapons were being procured for use by the
security force protecting some nuclear facility in New Mexico. Knight’s
product was going for nearly $2,400 per rifle. Initially, I wasn’t all that
interested in the Department of Energy’s solicitation - it was only 48 rifles -
but a couple weeks later the State Department place an identical solicitation
for 48 semi-automatics on “FedBizOpps” and I decided to find an
equivalent and underbid both contracts’ spec product; I knew I could do
better than $2,400 per.
About two hours into the flight - around midnight - Jenna leaned into
me and whispered, “You ever hear of the Mile-High Club?”
I glanced around the cabin and saw that almost everyone was asleep.
Thirty seconds later, we were in the first-class restroom, which is no
roomier than coach’s, despite what the travel agent said. I unbuttoned
Jenna’s blouse, unsnapped her bra, and yanked off her G-string. Jenna slid
onto the stainless steel sink, spread her thighs and took me in her hand.
Horizontal missionary. She had one foot on the handicap handrail and the
other on the door jam. Her Express mini skirt and top were lying in a heap
on the floor.
The cabin trembled and Jenna whispered, “Turbulence.” She smiled,
dug her nails into my ass and pulled me inside her with a moan. She
squealed and panted while I bumped and grinded away at her until we were
finished.
When we exited the restroom, a guy seated near the door glared at me
in disgust. Jenna was still buttoning her blouse and we were both glistening
with sweat. I looked him straight in the face, grinned and gave him a wink.
A violation of FAA regulations? Maybe, but I’m a proud member of the
Mile-High Club.
WE STAYED AT A SEASIDE HOTEL in Puerto Vallarta - your basic
tropical paradise resort. Our room was lavish: plush furnishings, a large
Jacuzzi on the balcony overlooking the Pacific Ocean - the works. The first
couple of days, we rode jet skis, swam, and took an ATV tour with roughly
a dozen other tourists through the mountains. Not some safe, “sissified”
well-worn path - we were tearing through thick foliage, climbing dirt
embankments, and splashing through ditches filled with two feet of muddy
water. At one point our tour guide took our group to a tequila factory -
where I’m sure he got a kickback from the owner. Most of us proceeded to
get drunk, just before we climbed on our 4-wheelers to drive back the same
treacherous trail through the jungle. I looked at Jenna and laughed, “This
would never happen in the states.”
The following day we were sitting in our Jacuzzi getting stoned while I
was reviewing the spec sheet on DPMS’s Panther .308 semi-auto sniper
rifle. It was the equivalent of Knight’s SR-25: same caliber (7.62 mm
NATO), the same gas-operated, rotating bolt action, roughly the same
length, weight and feeding system. Virtually identical distance and
accuracy. It was practically the same weapon. I called my contact with
DPMS, Dustin Emholtz, to get a quote for the .308. “We can do... twelve
hundred per Panther,” said Dustin.
“You can do better than that; I’m buying ninety-six of ‘em. If State and
Energy likes them, God knows how many they’ll order.” I got him down to
roughly $1,050, yielding a profit of nearly $1,000 per weapon - that’s
unheard of in the industry.
Jenna had listened to the entire conversation, and when the call ended
she asked, “What’s the difference between the SR one and the Panther?”
“Roughly a grand,” I replied sarcastically, and she shot me a scathing
look. “Listen,” I laughed, “the difference is prestige. Knight is the
Mercedes-Benz of sniper rifles, and I’m providing them with Infinitis.
They’re both great vehicles - eight cylinders, same gas mileage and the
same performance. Same car, but most people would rather drive the
Mercedes.” I took a sip of my Corona. “But if I provided them with
Mercedes, I wouldn’t have just made a hundred thousand dollars.”
“Oh my god,” snapped Jenna. “You’re gonna make a hundred
thousand dollars on that deal?” It sounded easier than it was. I had to fill out
the paperwork, read a couple manuals, and make several calls to get
clearance for the “equivalent product” and wire the money. By the time we
were back in Miami, the 308s were in production, soon to be en route to the
State and Energy Departments’ facilities.
HERE LIES THE RUB: Knight Armament’s owner, Reed Knight, or
one of his sales staff, must have known that “FedBizOpps” had multiple
solicitations out for roughly 100 of their SR-25s; they had received over a
dozen request for quotes from their preferred suppliers and defense
contractors.
When the order never materialized, someone at Knight must have
checked “FedBizOpps” and saw AEY, Inc. had been awarded the contract.
Knight is a prestigious company, but not exactly a behemoth of the industry,
with gross annual sales of roughly $100 million. So, they checked into the
loss of the $250,000 sale.
A couple of phone calls easily revealed I had swapped out their
overpriced SR-25s with 308 Panthers. It’s my understanding that they
weren’t happy.
Knight’s moneymaker - the product that made his company - was the
rail system: the RIS (Rail Interface System) and the RAS (Rail Adapter
System). The system allowed users to mount accessories to a variety of
firearms without additional modifications - tactical flashlights, laser units,
bipods, vertical grips. A great product, but hardly worth the $352 Knight
was charging for them - it’s roughly a pound of cheap aluminum and
composite plastic.
The Army was constantly including small orders of rail systems in
their solicitations - 500 here, 2,000 there. The quantities were never large
enough to get a significant discount from Knight, but the Army was
continuously requesting Knights Systems or “fit, form, and function”. So I
contacted a South Korean company and got them to manufacture a “genuine
equal” rail system for around $30 per unit. I started under bidding Knight’s
product by 30 percent - roughly $215 per unit - an after-shipping profit of
$175 per. I took a breakeven line item and turned it into a profit of $7,500
to $20,000, depending on the order.
Knight wasn’t happy with my solution, and I even got an angry call
from one of his salesman about my “knockoff” of Knights Rail System.
“It’s a genuine equivalent product,” I told him. “It’s not a ‘knockoff’.”
“It’s legal theft, that’s what it is!” said Knight’s salesman. “It’s
unethical.”
“No, it’s capitalism... quit your whining and deal with it.” As it turns
out, I had made an enemy of Knight, the kind of enemy that doesn’t forget.
The kind of powerful, politically connected enemy that would eventually
bite me back.
IT WASN’T LONG AFTER OUR MEXICAN VACATION, that I
decided we needed a nicer place. The Flamingo was a trendy apartment
building in South Beach, a sleek concrete tower with views of the ocean
and the bay, South Beach and downtown Miami. I remember looking out
the 29th-floor balcony at the Atlantic Ocean while the leasing agent pointed
out the 1,500-square-foot luxury unit’s amenities to Jenna - marble
countertops and stainless steel appliances, tiled floors, his and her sinks,
Roman tubs, and walk-in closets.
A minute later, Jenna walked up behind me and whispered, “It’s nice,
but it’s almost three thousand a month, Efraim...”
 I stared out at the clear blue waters of the Atlantic, the powder white
sands of South Beach, the city’s glass skyscrapers, Biscayne Bay... I felt
like I was on top of the world standing on that balcony. “I don’t care,” I
said. “I want it.”
It was my first adult apartment. It was the type of place that guys walk
into and think, I can get laid in here, and women think, I want to get laid in
here. We filled the place with new plush furniture and high-tech electronics.
ONCE WE MOVED INTO THE FLAMINGO, Jenna started pushing
to meet my mother. She wanted to be a part of the family, and to get
married at some point. She was even willing to convert to Judaism -
whatever she needed to do. “Efraim,” she said, “someday we’re going to
have kids... I’m going to have to meet her eventually.”
“Are you kidding?” I laughed. “You’re half Chinese... even if you
convert, my mom can’t pass you off as Jewish to her friends. She’s never
gonna accept you. She doesn’t even like me!” Hell, I was barely a part of
my own family.
But Jenna insisted that someday my mom would have to accept the
situation. She didn’t know my mother. “We’re in love,” she used to say - as
if that had anything to do with it.
CHAPTER TWELVE
 COKE TALK
“Bring war material with you from home, but forage on the enemy... use the conquered foe to
augment one’s own strength.” - Sun Tzu, The Art of War

ON JULY 28TH OF 2006, “A Solicitation for Nonstandard

Ammunition” was posted on “FedBizOpps.” The Army Sustainment
Command in Rock Island, Illinois, needed to purchase ammunition for
Soviet style AK-47 assault rifles, SVD Dragnunov sniper rifles, AK-47
UBGL (Under Barrel Grenade Launchers), T-55 and T-62 battle tanks, and
Mi-17 and Mi-24 attack helicopters, to supply our allies the Afghan
National Army and Police. I spotted the solicitation immediately; it was an
enormous amount of munitions. It was the type of opportunity that would
solidify AEY, Inc. as an International defense contractor. A serious player.
Supplying the Afghan Security Forces with munitions - that wasn’t a
small order. AEY, Inc. would have to scour Central and Eastern Europe and
a host of former Soviet Republics for hundreds of millions of dollars in
munitions from countries like Albania, Armenia, Azerbaijan, Belarus,
Bulgaria, Serbia, Estonia, Georgia, Hungary, Kazakhstan, Kyrgyzstan,
Latvia, Lithuania, Moldova, Montenegro, Romania, Russia, Serbia,
Tajikistan, Turkmenistan, Yugoslavia, Ukraine and Uzbekistan. I’d have to
negotiate with people speaking languages I didn’t know, travel to countries
I’d never heard of, and deal with characters most people wouldn’t want to
associate with - corrupt politicians and ex-communist military officials,
mobsters and warlords. I couldn’t wait!
There was, however, one problem: At this point it was just me and
Ronald Ledain Didier, AEY, Inc.’s “Operations Manager.” Packouz, my
“Account Executive,” had all but disappeared into his massage business. He
would come by every once in a while to go out or get high, but he wasn’t
actively working on any contracts for AEY, Inc. And this contract, if AEY,
Inc. won it - was going to take a team of additional staff.
 I CALLED PACKOUZ immediately and told him I had the perfect
contract for AEY, Inc. “Bro,” I said, “It’s a huge order for surplus
munitions. Bigger than the fifty-one million dollar Iraq contract... bigger
than anything I’ve ever done.”
“How big?” asked Packouz.
“Huge!”
“How huge!”
“At least... two hundred and fifty... no, no... Three hundred million
dollars, at least!” I yelled into my cell phone. “I’m going to need some help,
not part time help, real help.” I worked out a commission agreement with
Packouz for eight percent of the total profit margin on the Afghanistan
contract - once it was completed. Keep in mind this was a two-year
contract, and because of his work ethic I didn’t want to pay Packouz a
salary, and I couldn’t pay him a full commission per Task Order because
some of the Task Orders might need to be completed at a loss, and some
would have large profit margins. As a result, it wasn’t possible to determine
precisely how much AEY, Inc. would make until the completion of the two
year contract. “Here’s what I’ll do... I’ll let you take fifty percent draws
against your commission, upon completion of each Task Order. What do
you think?”
“I’ve got no problem with that,” he said.
“We’re gonna have to start getting quotes from Eastern European
manufacturers, air freight carriers, state owned military liquidators and
trading companies... it’s gonna take some time.”
Most of what AEY, Inc. would be acquiring was surplus Soviet type
munitions. By this point, I had already established a lot of my own contacts;
between them and Heinrich, I believed I had access to some of Eastern
Europe’s largest and most lucrative stockpiles. Had the solicitation called
for new munitions, the competition would have been far fiercer, requiring
large upfront cash deposits that I couldn’t possibly make, but after the
Communists relinquished power, the old satellite states started liquidating
their weapons and munitions inventories, dirt cheap, to whoever brought the
cash first. Eastern and Central Europe were flooded with military
warehouses, depots, and bunkers filled with stockpiles of munitions, and
peppered with factories eagerly awaiting and willing to manufacture
whatever weapons and munitions the bunkers didn’t already contain.
 Packouz and I began calling dozens of military liquidator companies -
both private and State owned companies - in Eastern Europe and the old
Soviet bloc, such as Ajencija Alan, the state owned exporter for Croatia,
Yugomont, and Montenegro’s state owned export company, or ROMARM,
Romania’s excess military equipment liquidator. We would sit around
hitting a bong, and scream, “English! English!” into the phone until they
found someone at the company who spoke English. We emailed or faxed
the list of munitions AEY, Inc. needed to secure for the solicitation.
Half the time, if I got a quote from a military liquidator that was too
high, I would do a couple lines of coke, call them up and let the coke do the
talking for me, “Are you fucking with me!” I would yell into the phone. “I
know you can do better than this; its forty-year-old surplus stock for God’s
sake!”
“You can sell it to the U.S. Government through me… or pay to
destroy it once the U.S. and NATO tells you that you have to.”
“Nyet,” they would reply in a thick Russian accent, “Dis best price.”
“No, no, I know you can do better!” Most of the time they would
eventually cave, and drop their price.
It took a little more finesse to get a decent quote out of Eastern
European manufacturers such as ZVS out of Slovakia, PRVI PARTIZAN
based in Serbia, and Arsenal manufacturing headquartered in Bulgaria. See,
when I called and asked for a quote for AEY, Inc. - a small defense
contractor out of Miami, Florida - most manufacturers took forever to get
back to me, and the prices were high. So, I switched tactics. I’d get
someone from Slobada, a large-scale ordinance factory based in Cacak,
Serbia, on the phone and say, “I’m a U.S. Government procurement
contractor calling in regards to a U.S. Army order for eighty thousand 40
mm high explosive grenades, fifteen thousand 80 mm aviation rockets, and
one hundred thousand 30 mm high explosive fragmentation grenades...”
and they would assume that I worked for the U.S. Government, or, at the
very least, that I was affiliated with it. I would ask how much stock was
currently available to ship - as if I was ready to buy immediately - and how
quickly they could have our order in production - as if we were ready to
whip out a government credit card and order $10+ million dollars in
ordinance right there on the phone. “When will it be ready to ship?”
They would scramble around checking on their inventory and calling
the factory for the production schedule. I’d tell them, “We’re interested in
creating a long term relationship - an exclusive relationship - with an
Eastern European manufacturer. But, we’re going to need par pricing on
this large of an order.”
When I felt I was getting close to my target price I would push a little
harder, “At the quantities we’re ordering, the U.S. Government’s gonna
need you to do better than this.” Sometimes they would go lower, and
sometimes they wouldn’t, but it never hurt to push. What were they going
to do… slam the phone down on Uncle Sam?
By the time we priced out the cost of shipping, fuel, storage, and
handling, we had everything we needed to put in a competitive bid on the
Afghanistan contract - $298 million. Believe it or not, the profit margins
were razor thin - especially for this type of a high-risk business - between
five and ten percent depending on the munitions. I assumed I could whittle
down the quotes I had been given once AEY, Inc. was awarded the contract
- if AEY, Inc. was awarded the contract.
CHAPTER THIRTEEN
 ANGER MANAGEMENT
“Strength on Your Side” - General Dynamics, Marketing Slogan

A FEW MONTHS AFTER AEY, Inc. put in the bid on the

Afghanistan contract, the Department of Defense informed me they had to
audit AEY, Inc.’s books. “It’s a pre-award audit,” said the Army rep. “Your
company is being considered for an award, and the information is necessary
for the final evaluation and selection process.” It could only mean one
thing: they were looking into AEY, Inc.’s ability to handle the size and
volume of the massive orders.
The problem was, they were asking for an insane amount of
information: copies of my most recent retained earnings balance sheet, a
statement of current sales, an anticipated monthly sales forecast, a cash flow
schedule, current bank statements, accounts payable and receivable,
existing loans, lines of credit and terms, etc.
At the time, my books were a mess. I was a 20-year-old kid; what did I
know about the intricacies of business administration and proper
accounting? So I immediately asked my accountant, Robert P. Rachlin, to
put everything together. Days before the audit, I found out Rachlin had a
couple white collar convictions, and even did a few years in federal prison
for mail fraud and income tax fraud. So you can imagine how worried I was
when the first audit was scheduled.
Keep in mind, AEY, Inc.’s corporate headquarters were located in a
cramped 300-square-foot office with cheap particleboard desks and plastic
swivel chairs. So I made damn sure to have the audit take place at Rachlin’s
office.
Rachlin and I sat in on the audit, and he completely schmoozed the
government auditor - pulled out her chair, offered her coffee or tea, “Maybe
a bagel or muffin?” he asked her with a big toothy grin. It was a whole
bullshit presentation, and I honestly had to stop myself from laughing on a
couple of occasions.
 The whole time she was there, Rachlin kept saying, “The kid’s books
are solid.” He had a really thick New York accent. “See,” he would say
pointing to one figure after another.
They spent an hour going over AEY, Inc.’s balance sheet and bank
account - which at the time had more than a $5.4 million cash balance - the
auditor nodding in agreement with everything Rachlin said. “Well,” she said
after writing some notes in her legal pad, “everything looks all right to me.”
“They’re good,” replied Rachlin. “Did ‘em myself.” The guy had
pleaded guilty to multiple felonies related to his accounting practices.
THE SECOND AUDITOR insisted on meeting me at AEY, Inc.’s
office. “This is a pre-award audit Mister Diveroli,” she said. “I’ve got to
inspect AEY’s corporate office - it’s protocol.”
There wasn’t any way out of it. The look on the auditor’s face when
she saw my office said it all. She was expecting the likes of General
Dynamics - a modern, state-of-the-art facility with expansive offices full of
stainless steel furnishings, where she would be served tea and crumpets
while conducting her audit at a civil servant’s pace. What she got was some
beat-up particleboard desks and worn out chairs, crammed into a
cubbyhole. “This is your... office?” she asked, glancing around the interior.
“Yes, ma’am,” I said. “This is how we keep our overhead costs low...
Keep in mind we also have affiliate offices in Salt Lake City, Utah, and
Switzerland.” It sounded good.
She sat at my desk and rummaged through AEY, Inc.’s books. I got her
a Diet Coke and some Sun-Chips from the Subway sandwich shop next-
door. As she went through AEY’s documents, I thought I was sunk for sure.
THE FOLLOWING DAY, I was contacted by Chuck Moran with
DCAA (Defense Contract Audit Agency). The financial analyst asked for
copies of AEY, Inc.’s certified financials and an updated balance sheet -
stuff I didn’t have. Keep in mind, in order for AEY, Inc. to meet the
necessary net worth required to bid on the Afghanistan contract, I had
convinced Ralph to pledge his half of a piece of property he and his
attorney had purchased in Utah for roughly $1 million. As a result of the
property being near the site of the winter Olympics, Ralph had obtained an
appraisal on the property for $60 million - subject to a particular re-zoning,
a re-zoning that the county had since denied multiple times.
But I didn’t mention the zoning issue to the Department of Defense.
Instead, Ralph had his attorney write a cleverly crafted letter pledging
Ralph’s half of the property to the DoD. We provided a $60 million
“subject-to-re-zoning” appraisal, and then we waited to see if they caught it.
So when I got the call requesting my certified financials and updated
balance sheet, I was a little nervous. “Sorry,” I said, “I don’t have anything
like that... I...”
“Don’t worry about it, Mister Diveroli,” interrupted the DCAA guy,
“with your past performance record and that thirty million dollar pledge... it
won’t matter.” He signed off on AEY, Inc.’s financial capabilities and we
passed the pre-award audit.
ON NOVEMBER 26TH OF 2006, Jenna and I had been out with several
of her friends bar hopping in Ft. Lauderdale’s Las Olas Riverfront, an area
containing dozens of bars and clubs. You can imagine what that was like - a
coked-up 20-year-old multi-millionaire and a bunch of chicks in their late
20s - and broke. They loved what I represented, but hated who I was.
Jenna begged me not to do any coke that night. “Please, Efraim,” she
said, when we first got to the club, “You know how you get.” Admittedly, I
was a lunatic on cocaine, and her friends already didn’t like me.
“Not a problem - I’m good.” But I had no intention of keeping my
word. Hell, I already had the blow on me, and at the first opportunity I
slipped into the bathroom for several blasts. Too many blasts.
By the time I hit the dance floor I was out of control. I was dancing
with Jenna’s friends and flirting with other women. Jenna was furious.
We got home around four in the morning, and she was pissed. We
argued and bickered until 8:00 am. When Jenna had had enough, she picked
up a green glass ashtray and slung it at my head like a Frisbee. It shattered
against the wall. I knew there was no way that sound hadn’t woken several
neighbors. “I’m through!” she screamed. “We’re done, asshole!”
As Jenna stomped out of the apartment into the hallway, I yelled,
“You’re not going anywhere!” I caught a glimpse of the diamond-stud
earrings I had bought her several months earlier, and in my coke fueled
mania I suddenly decided she didn’t deserve them. “Give me those fucking
earrings back!” I yelled, heading into the hallway, where we proceeded to
scream and fight about the earrings, until two Miami Beach police officers
showed up.
The police quickly separated us, snapping a pair of handcuffs on me
and placing me in the back of the police cruiser. I was sure I was going to
jail. I always knew at some point I was going - because of my outrageous
behavior. It wasn’t a question of if, but when... and today seemed as good as
any.
The female officer spoke with Jenna for about five minutes. When they
were finished the officer pulled me out of the cruiser and said, “I don’t
believe her, but she says you never touched her.”
The officers told us they had to take a quick look around and they
would be on their way. The two officers wandered through the apartment;
saw the broken astray and some empty bottles of vodka. When the female
officer looked in the bedroom closet she found a large black nylon gun case.
She unzipped the clasp and opened it to find a loaded Uzi sub-machinegun
and three spare magazines filled to the brim with Federal 9 mm submachine
gun ammunition inside. “What’s this?” she asked.
“I’m a licensed dealer,” I responded, and quickly produced AEY, Inc.’s
Federal Firearms License.
She inspected the document suspiciously, “Huh, okay.” Then handed it
back to me. A second later she slid open the nightstand drawer and pulled
out a Ziploc bag with half an ounce of hydroponic grass in it. My heart
sank. The female officer turned to me and said, “You got a license for this?”
“Nope,” I smiled, “but you don’t have a search warrant either,” I said
half jokingly.
She grinned back at me, nodded to her partner and said, “I like this
kid,” and she dropped the bag back in the drawer. “Let’s go.”
ROUGHLY A MONTH LATER - December 21st of 2006 - Packouz
and I were doing lines in my condo, getting ready to go clubbing on South
Beach. I called down to the valet for my car.
When we got to the lobby twenty minutes later, my vehicle wasn’t
there. The valet, this skinny Cuban guy who loved to give me a hard time,
was on the phone. I said, “Where’s my car bro?” and he flipped me the
finger.
For some reason this guy had never liked me. He used to call me
“Richie Rich” and “Gringo.” Stuff like that. I was once on a date and I
handed him a twenty and asked for fifteen back and he said, You gave me a
five, and then gave me this little smirk. What was I going to do... go
ballistic over $15 in front of my date? This is the kind of shit he did.
So when he shot a bird at me, I got pissed and walked over to the valet
stand and grabbed my keys. Packouz and I headed to the parking garage
and the valet said, “Aye, where you going, man... give me dose keys, man.”
 I said, “I’ll get it myself, clearly you’ve got better things to do.”
The next thing I knew, Skinny Cuban was in my face poking me in the
chest and cursing at me in Spanglish. Jacked up on coke and pissed off, I
snapped, “Back off motherfucker!” and the guy took a swing at me. I
pivoted, but Skinny Cuban caught me on the side of the head. I swung back
and hit him in the shoulder and put two in his ribs, with little effect. He
dove into my torso and we hit the lobby floor.
It wasn’t a dramatically choreographed Jason Bourne or James Bond
fight; it was just two guys rolling around slugging it out. The concierge
yelled, “I’m calling the police,” and Packouz eventually pulled us apart.
We were both breathing pretty hard and Skinny Cuban said, “Fucking
piece a shit.” But I didn’t say anything back, I just hunched over breathing
hard, and that’s when the valet crossed the line and grunted, “Go fuck your
mother you piece a shi - ” I lunged forward and caught him just above the
chin with a right hook - he hit the ground hard. That’s when the Miami
Beach Police showed up: two Cuban cops walk into the lobby and I’m
standing over Skinny Cuban, fists clinched in rage. The concierge and the
valet - who were friends - lied to the police, and said Packouz and I
attacked Skinny Cuban.
“Bullshit!” I snapped. “They’re lying.” But Skinny Cuban was pretty
scraped up and bruised. He might have even been bleeding a little bit from
his split lip. It sounds worse than it was - the guy was fine.
One of the police (who just happened to be Cuban as well) searched
me and found one of my “borrowed” Florida ID cards. The officer waved it
in my face and asked, “What’s this?”
I had just turned 21-years-old the day before, and like a drunk coked
up dumbass, I said, “I don’t even need that anymore. I’m twenty-one now.”
What an idiot!
The police snapped cuffs on me and Packouz, read us our rights, and
dragged us to the Miami Beach Police Department, where we were printed,
photographed, and each charged with misdemeanor battery; I was also
charged with felony possession of a stolen or forged document - the ID
card.
The cops called an ambulance for Skinny Cuban and he was taken to
the local hospital’s Emergency room. It was such bullshit. He didn’t even
get charged.
 We were strip searched and placed in a holding cell. When that heavy
steel door slammed shut, I remember thinking, I knew I’d end up getting
arrested for something... eventually. The place was nasty. There were a
couple dozen rough looking guys with tattoos and there was nowhere to sit.
I was more disgusted than scared; it smelled like puke and piss - that was
the worst of it. I dozed off for a couple hours in a bunk and the next
morning we were released on our own recognizance.
I hired a lawyer for $5,000, this young guy who didn’t know much of
anything - can’t even remember his name.
Once the police reviewed the surveillance tape, they realized Packouz
wasn’t involved, and they dropped his battery charge. They also saw that
Skinny Cuban took the first punch and I was defending myself.
Unfortunately, the district attorney felt there were multiple points when the
fight could have ended, but I seemed unwilling to stop fighting. Keep in
mind there was no sound, only video, so they couldn’t hear Skinny Cuban
mouthing off.
My novice attorney said, “They’re not going to drop the battery
charge... it’s only a fine.” I paid the $200 misdemeanor and saved myself a
felony charge for possession of a stolen or forged document by being
entered into the first time offenders program or pretrial intervention
program. I had to attend anger management classes once a week for six
months - it totally sucked! I was angrier after I completed the course.
A WEEK AFTER THE INCIDENT, I got a call from an attorney
representing Skinny Cuban who said, “This guy’s hurt... I don’t want to sue
you over this... but I will. You need to think about settling.”
I started laughing, and told him to “Fuck off! I’m not giving you shit!”
I never heard anything else about any lawsuit from that creep.
CHAPTER FOURTEEN
 THE SURGE
“The allies we gain by victory will turn against us upon the bare whisper of defeat.” - Rear Admiral
Alfred Thayer Mahan

ON JANUARY 10TH OF 2007, I was taking some bong rips while

watching President George W. Bush address the nation on the flat-screen in
my posh apartment.
The war in Iraq was going badly; al-Qaeda terrorists and Sunni
insurgents had blown up several holy shrines and formed death squads,
murdering innocent Iraqi citizens. Assassinations, suicide bombings, and
IED attacks against U.S. and allied forces were increasing along with U.S.
military casualties.
Public opinion on the Iraq war was shifting, and in the mid 2006
elections, Bush’s Republican Party lost control of the House and the Senate.
The consensus in the GOP was that something needed to be done in Iraq or
the Republicans would lose the White House in 2008.
“Good evening,” said Bush from the Oval Office. “Tonight in Iraq, the
Armed Forces of the United States are engaged in a struggle that will
determine the direction of the global war on terror...” He went on to say his
administration had met with Members of Congress, allies abroad, outside
experts, and his military advisers; the message was clear: Failure in Iraq
would be a disaster for the United States. Bush laid out his plan for “The
New Way Forward,” which eventually became known as “The Surge.”
“The Iraqi government will deploy Iraqi National Army and Police
brigades across nine districts.” He looked deep into the camera and said,
“But for [the plan] to succeed, our commanders say the Iraqis will need
help... This will require increasing American force levels. So I have
committed more than twenty thousand American troops to Iraq.” I
remember laughing out loud when he said, “We will help the Iraqis build a
larger and better-equipped army...” Fuck yeah, Georgie boy! Bush ended his
speech by saying something like, “Continuing to pursue al-Qaeda and
foreign fighters... [and] bringing peace to the Middle East.”
Not long after that speech, AEY, Inc. received Delivery Orders for
roughly 35,000 AK-47 assault rifles, over 800 DShK heavy machine guns,
nearly 500 RPK light machine guns, 25 million 7.62 rounds, and half a
dozen other contracts for weapon-related gear and accessories - all destined
for the Iraq National Army and Police.
ON JANUARY 26TH OF 2007, I received an email from Rock Island,
notifying me that AEY, Inc. had been awarded the U.S. Army contract to
supply the Afghanistan Security Force in the amount of $298 million. The
news had barley sunk in when I got a call from Melanie Johnson, the Senior
Contracting Officer. “Congratulations Mister Diveroli, AEY, Inc. was
awarded the munitions contract.”
“Thanks... I see that,” I stammered. “I just got the email.” She
requested some documentation, nothing I couldn’t provide.
I wasn’t a rookie, and this wasn’t my first rodeo; it was just another
Indefinite Delivery and Indefinite Quantity (IDIQ) contract, for munitions
that would need to be flown into a war zone. There were numerous things
that could go wrong. Like most large government contracts, the government
had it conveniently set up so they weren’t contractually obligated to buy
much of anything. But I was locked into my low-ball prices for at least two
years or until the Army exceeded the max quantity and all its options under
the contract, regardless of fluctuations in price, availability of munitions in
the market, fuel, materials for new production, and stock. It was a big
contract and potentially very lucrative - but it was just another contract.
WHEN AEY, INC.’ S FIRST ORDER came in - Task Order One - it
was for less than $700,000-worth of 7.62 mm Russian ammunition, used in
AK-47 assault rifles, and 40 mm high-explosive grenades, used on the AK-
47 UBGL (Under Barrel Grenade Launcher). Not a large order. I was
disappointed, but we started working on it immediately. The Army had
technically fulfilled their contractual obligations by purchasing the bare
minimum, and it was truly anybody’s guess what would happen next.
A FEW WEEKS LATER, I was hard at work in my office, putting out
the usual fires on half a dozen different contracts, when I received a call
from Kimberly Jones with the purchasing office at Rock Island. She asked
if I was available to meet her at her office in Illinois.
 “Of course I’m available.” Kim was the Army Contracting Officer
with the U.S. Army Sustainment Command assigned to my Afghan
contract. She held the combination to the vault. If Kim wanted to talk, I was
ready to talk about whatever she wanted. I’d be her Oprah Winfrey and Dr.
Phil. If she needed a best friend, I was ready to braid her hair and give her a
pedicure. “Whatever you need Kim.”
I ASKED RALPH MERRILL if he would attend the meeting too. I
was 21-years-old, after all, and I thought it would look better if I had
someone there that looked... more experienced. Ralph was a Mormon from
Utah, in his early 60s, and he looked every inch the part of a successful
arms manufacturer and engineer.
In February of 2007, Ralph and I flew into the Quad City Airport in
Moline, Illinois. It was freezing, snow everywhere - at least three to four
feet of it. It wasn’t Miami Beach.
Rock Island was established in 1855 as a Civil War ordinance depot. It
was now occupied by several military installations, including the U.S.
Army Armament Material Readiness Command headquarters and
Sustainment Command, as well as the Rock Island Arsenal. There were
acres of World War II Sherman tanks and Vietnam-era artillery lying
dormant in three feet of snow.
We met with Contracting Officers Kimberly Jones, Brett Luchsinger,
and Supervisors Melanie Johnson and Daniel Stackwick in their dingy little
grey conference room. She asked some benign questions about AEY, Inc.,
but she didn’t seem to be listening to the answers. At one point she glanced
at me - really stared at me. Now I can’t be sure, but she had to be
wondering how old I was and possibly questioning my company’s ability to
pull off the type of volume and frequency of munitions shipments that the
Afghani contract required. She glanced at Ralph and asked, “Could you go
over your acquisition strategy one more time?”
Ralph looked at me, and I replied, “Absolutely, Kim...” Ralph had no
inkling of AEY, Inc.’s capabilities. For the purposes of this meeting, he was
just a prop. I continued, “As you know, the old communist bloc countries
have been stockpiling munitions for the past several decades - all
serviceable, hermetically sealed, and battle-ready per the contract
requirements - there’s no age restriction.”
“Right,” she agreed, “provided it’s serviceable.”
 “And it will be... We plan on buying up as much of those surplus
munitions as possible. Whatever we can’t purchase from governments or
private stocks, we’ll have manufactured in Eastern Europe, by several
ordinance factories we have established relationships with, based on our
past dealings... Kim, we’ve got affiliate offices in Utah and Switzerland,
this is what we do.” AEY, Inc. had already been awarded the contract, so I
wasn’t sure why we were now discussing the company’s abilities, but I
didn’t mind answering her question; I was confident in my abilities. I then
pulled out a draft End User Certificate (EUC) for one of the deliveries
connected to Task Order One. “While I’m here Kim, you think you could
have someone sign off on a EUC for Task Order One?” I slid the form
across her desk, “I’m on a tight schedule.”
She looked surprised that I wanted the document signed right then and
there, but she also looked impressed that I was taking the initiative and
working on filling the order ASAP. “Sure,” she said with a smile, “no
problem.” She then asked Daniel Stackwick to sign off on the EUC, which
he promptly did.
A minute later, she flipped through what looked like a thick report on
her desk. “Well,” she sighed, “your company’s performance was rated
excellent...” Which was odd because AEY, Inc. had defaulted on several
contracts. But any defense contractor occasionally has issues, even
behemoths like General Dynamics, Raytheon Lockheed Martin, and
certainly any contractor as active in supplying the war effort as AEY, INC.
had been. Sometimes things come up that are beyond your control. Kim
looked from Ralph to me and gave us a weary smile, “Okay then... I think
we’re all good here.”
The meeting was over. Maybe it was a formality, maybe she just
wanted to put faces to names, but when we walked out of her office I was
confident she was optimistic about AEY, Inc.’s ability to perform. Ralph
hadn’t said ten words, but I was glad he had come - numbers never hurt,
and in this case the appearance of age, wisdom, and experience certainly
helped.
I SENT PACKOUZ TO THE IDEX TRADE SHOW in Abu Dhabi,
the largest of the United Emirates. It’s oil fields make Abu Dhabi one of the
most prosperous regions in the world. The city is a Muslim metropolis,
packed with glass and steel skyscrapers, lots of concrete, palm trees, and
heat. Everything is modernized. It’s Vegas without the alcohol, prostitutes,
and gambling.
According to Packouz, there were no fashion models or stripper types
wearing body armor or demonstrating weapons at the IDEX show, just
sheiks, defense ministers, manufacturers, and suppliers.
I specifically told him who to talk to and what I needed him to look
for, but - typical Packouz - he spent several days sitting around trying to get
an appointment with the deputy director of Rosoboron Exports, a quasi
“private” company with the exclusive rights to sell all of Russia’s excess
military armaments.
I called Packouz on the second day of the expo to get a progress report.
“I’m waiting to talk with Rosoboron’s deputy director,” he said.
“Why?” I had told him not to approach them. “They’re on the State
Department’s ‘blacklist’. It’s a waste of time.” I asked him if he had spoken
with Arcus or Romtehnica, two Eastern European arms trading and
manufacturing companies, but he hadn’t.
“Bro, Rosoboron can fill the whole fucking order,” Packouz said,
which was theoretically true, but I told him there was no way we could
legally buy from them. “Efraim, all we’ve gotta do is find a shell company
and…”
“I’m not gonna do that, Pack. Talk to Arcus and Romtehnica...” I
wasn’t going to risk my $51-million Iraq contract and the $300 million
Afghanistan contract because Packouz wanted to take a shortcut, without
having any clue to the type of potential consequences he’d be subjecting us
to.
I later found out he did the exact opposite of what I had instructed him
to do. As Guy Lawson wrote in Rolling Stone magazine:
Packouz went to the main Russian pavilion every day to try to get an
appointment... on the last day, Packouz was given an appointment. The
deputy director looked like he was ex-KGB - big and fat, in his sixties, with
thick square glasses. As Packouz spoke, the man kept surveying the
pavilion out of the corner of his eyes, as if he were being watched. Packouz
showed him the list of munitions he needed, along with the quantities. The
director raised his eyebrows, impressed by the scale of the operation.
“We have very good interest in this business,” he said in a thick
Russian accent. “You know we are only company who can provide
everything in the time you are asking.”
 “I’m aware of that,” Packouz said. “That’s why we want to do
business with you.”
“But as you know, there is a problem. State Department has
blacklisted us. I don’t understand your government. One month is okay to
do business; next month is not okay. This is very not fair. Very political.
They just want leverage in dealing with Kremlin.”
“I know we can’t do business with you directly,” Packouz said. Then
he hinted that there was a way to get around the blacklist. “If you can help
us do business with another Russian company, then we can buy from them.”
“Let me talk to my people,” the Russian said, taking one of Packouz’s
newly printed business cards.
It was the last Packouz ever heard from the Russian.
Packouz never spoke with the directors of Arcus or Romtehnica. All
he came back with from Abu Dhabi was some bullshit brochures and zero
potentially useful Central or Eastern European contacts. That was Packouz -
that was what I was dealing with. Essentially, I spent roughly $4,000 to
send him on a five-day Middle Eastern vacation. Although, without the
alcohol, prostitutes, and gambling, I’m not sure how much fun he could’ve
had.
THE NIGHT PACKOUZ GOT BACK TO MIAMI we went out
clubbing in South Beach. It was after 11 o’clock, and Jenna had been
calling all night, wanting me to come home. Packouz and I were on our way
back when he spotted a couple of black chicks - a dark-skinned leggy one
with thin dreads and a bone-thin mulatto with chemically straightened hair.
They were walking down the strip strutting their stuff in club attire: mini-
skirts, halter-tops, and fuck-me pumps. I’d had one too many - maybe a
little more - and all I wanted to do was go home, but Packouz convinced me
to pull my Audi to the curb.
He leaned out the window and started pouring on the charm, asked
them, “You ladies need a ride?” and “You like to party?” A couple minutes
later we were on our way back to Packouz’s apartment and my car was
filled with the smell of cheap perfume; ten minutes after that, we were
sitting in Packouz’s living room doing lines.
These chicks were attractive - I would even venture to say “hot” in a
Vegas showgirl kind of way - but there was something unpalatable about
them. Pancake makeup and gaudy hair and nails. They were a little over the
top.
 The skinny mulatto was sitting on Packouz’s lap flirting and giggling
at everything he said - and Packouz isn’t that funny. The darker girl was
making eyes at me, but I wasn’t feeling it - something didn’t seem right
about her. Packouz’s chick leaned in and gave him a peck on his bald head.
“You’re a real cutie,” she told him, then made some crack about liking
white chocolate and they started making out right there on the couch.
I was getting more and more uncomfortable with the whole situation.
My plan was to do a couple more lines and head home to Jenna. That’s
when I noticed Packouz place his hand between the mulatto’s knees and
slide it up her thigh, under her leather mini-skirt and up to her pelvis.
Suddenly Packouz froze, he locked eyes with her and went rigid - and then
screeched like a 12-year-old girl, “Ahaaa!” He must have grabbed a handful
of man meat. He yanked his hand back and yelled, “What the fuck? What
the…? Fuck! Fuck! Fuck!”
He jumped to his feet - dumping the transvestite on the ground - and
started whipping and snapping his hand back and forth, like he was trying
to shake the feeling or stench out of it, I guess.
Looking back, they were a little taller than your average girl, and their
hands were pretty big - the Adam’s apple should have been a clue - but if
I’m to be perfectly honest, they were convincing cross-dressers.
Packouz was screaming about how he was going to beat their “faggot
asses,” but he was no tough guy - the smart money was on the trannies. I
remember thinking, What has this jackass gotten me involved in? - and then
the fact that less than a minute earlier Packouz had had his tongue down
this guy’s throat struck me, and I started laughing uncontrollably. “Oh
man...” I laughed, “Wait till Monday morning.”
“Bro,” yelled Packouz, “you can’t tell anyone about this!”
“Fuck that,” I said, opening his apartment door. “You’re on your own...
see ya at work.” I left him and the trannies in his apartment yelling at each
other. Good times. Good times.
CHAPTER FIFTEEN
 TASK ORDER TWO
“The problem with gun runners going to war is that there is no shortage of ammunition.” - Simeon
Weisz, Lord of War (Movie)

“Firearms are second only to the Constitution in importance; they are the peoples’ liberty’s teeth...” -
George Washington

ON MARCH 13TH OF 2007, Kim Jones called me and nonchalantly

asked, “Efraim, you got a pen? Task Order Two came in and I thought I’d
give you a heads up.” She started reading off the order. Just over 120
million 7.62 x 39 mm Russian ball and tracer rounds was the first thing she
said, and I remember thinking, Fuck! 7.62 rounds were a break-even item…
maybe even a loss leader. Then she said, “Five hundred and fifty thousand
GP30 high-explosive impact grenades, over sixty-three thousand five
hundred OG-7V antipersonnel grenades, five hundred and fifty thousand
GP30 high-explosive bouncing grenades, and ninety-one thousand 12 gauge
slugs... it’s roughly forty-eight million dollars.” I simultaneously had a heart
attack and an orgasm. That one phone call represented three times what
AEY, Inc. had ever done.
“Well, thanks for the call Kim,” I was in shock, and trembling with
excitement; I still don’t know how I managed to sound so calm. “We’ll get
right on that for you.”
It was a big order, a moneymaker. The kind of money that I had never
seen, and it had the very real potential of pushing me personally into eight
figures. We sent out a mass email to manufacturers and distributors
throughout the world, listing AEY, Inc.’s requirements and stating this
wasn’t a RFQ (Request For Quotation); we had the signed U.S. Army
delivery order in hand.
BY THE TIME I FINISHED, it was after seven o’clock, and I raced
home to tell Jenna about the Task Order. She jumped into my arms,
wrapped her legs around my waist, and started kissing me. She was so
excited, shouting, “My boyfriend just received a $48 million delivery order
from the U.S. fucking Army!”
We were in the middle of pulling each other’s clothes off when I
started spouting off the specific items I would have to track down, “One
hundred million AK rounds... and five hundred and fifty thousand high-
explosive bouncing grenades... and…”
“Bouncing grenades?” Jenna laughed, as she unzipped my jeans. “Why
would they want ‘em to bounce?”
“Casualties!” I said, excitedly. “See, they hit the ground and bounce up
several feet, blowing apart and sending shrapnel in a six-meter radius,
shredding everything around ‘em - vehicles, bodies…”
“Efraim!” she snapped, and stopped unclasping her bra. “That’s
horrible... How do you sleep at night?”
“What’re you talking about?” I laughed, “Between the Ambien and the
ten million plus I’ll make off this order... I’ll sleep like a baby.” Jenna
glared at me, and I tried to clean it up. “With you in my arms, Bear.”
AN HOUR LATER I WAS LYING IN BED, staring out the window,
smoking a Parliament and thinking about the standard Kalashnikov
munitions. The basic 7.62 mm rounds (excluding tracers) are made up of an
aluminum alloy or brass casing, an explosive primer, a low-explosive
deflagrate - a mixture of nitrocellulose and nitroglycerin - and a projectile
or “bullet” consisting of a steel or lead core covered by a hard full metal
jacket - and I needed a lot of them. Jenna stepped out of the bathroom with
a towel wrapped around her torso and asked, “You okay?”
“They ordered over one hundred and twenty million 7.62 mm Russian
rounds.” The bulk of the ammunition was 7.62x39 mm, for use with the
AK-47 (Avtomat Kalashnikovsa) assault rifle, and others were 7.62X54 mm
to be used by the SVD (Snayperskaya Vintovka Dragunova) sniper rifle and
the PKM PKT (Pulemyot Kalashnikova Mounted and Tank) machinegun.
“It’s a lot of ammo...” I sighed. “If they exercise all their options over the
course of the contract... it’s half a billion rounds.”
Jenna’s face dropped slightly, “Can you get that much?”
“I’m sure as fuck gonna try, Bear.”
INITIALLY WHEN AEY, INC. started sourcing the stockpiles of
decade-old munitions, I wasn’t the least bit concerned with its performance.
All munitions are hermetically sealed - in airtight containers - and therefore
made to be highly resistant to environmental influences.
 However, eventually the question of age did come up, so I had roughly
a dozen of the 40-year-old 7.62 rounds tested - by HP White Laboratories -
against newly produced commercial-grade Russian munitions. Not only did
the aging stockpile ammunitions function, they performed better than the
newly manufactured Russian rounds. So, I was more than satisfied with the
product.
WITHIN A WEEK, I found a 2,000-square-foot office at the 912
Building and bought nicer furniture, computers, and a phone system with an
intercom. New fax machines and copiers. The works. I then worked on
filling the office with employees.
Now, a typical defense contractor with this amount of lucrative
business already in hand would have assigned a dozen experienced
purchasing agents to handle that type of volume or subcontracted it to
experienced and reputable suppliers, but not me. I made the big mistake of
hiring “friends.” I hired Daniel Doudnick, an old friend from Hebrew
school who was born in Uzbekistan and spoke fluent Russian; he had dark
skin and hair, sort of an Arab-meets-Asian look. He was a hardworking guy,
but a partier. Daniel handled all our airfreight and logistics and his buddy
Levey Meyer - Doudnick and Meyer came as a package. I didn’t even want
to hire Meyer - I liked the guy, but never really trusted him - but Doudnick
wouldn’t come without him. I made Doudnick a “Logistics Specialist” and
his buddy Meyer an “Account Executive.”
There was Alexander Podrizki, a pale-skinned wannabe hippie with
shaggy brown hair who was stuck on a world-peace mentality and
constantly stoned. He was bright, but had zero ambition, so I gave Alex the
title of “Quality Control Specialist.”
Don’t let all the fancy titles fool you; I was pretty loose with them.
Before I called them, some of these guys were high-school dropouts taking
the bus to their assistant french-fry chef jobs at Burger King at eight o’clock
in the morning, and by that night they were “Account Executives” with
AEY, Inc., an up and coming “Defense Contractor” specializing in the
international procurement and delivery of weapons and munitions to active
combat zones.
I hired two ghetto-fabulous chicks, a black girl named Yanaris Fundora
and a Miami chongo named Darlene Something, as secretaries. I also hired
Yong Kwon, a South Korean friend of Packouz, to do internet research,
finding Eastern European manufacturers, and an extremely sexy Spanish
girl, Islara Soto. She was hot in a biker-chick kind of way: tattoos and
piercings. Lastly, Diana Llanos, Nicaraguan secretary.
Jenna couldn’t stand any of the girls I hired. She suspected I was
having sex with Diana; I wasn’t at the time, but she didn’t believe that.
Look, I didn’t hire the Brady Bunch. These guys were snorting coke in the
restroom and coming in hung-over. My Personal Assistant was doing
amateur internet porn for Bang Bus under the pseudonym, “21 Questions” -
check it out... she’s a talented girl.
ROUGHLY A WEEK LATER I was in Doral, Florida, at the Westin
Hotel and Country Club, pitching several Canadian investors on becoming
equity partners in the Afghanistan contract, along with several others, when
I received a call from Georgi Bankov with Arcus Co., a Bulgarian
manufacturer of defense- related products: ammunition, grenade launchers,
mortars, and small arms. “We can manufacture the munitions and meet the
delivery schedule,” he said, in a Bulgarian accent. “We want it.”
I threw out a low-ball price of roughly $22.3 million, and Georgi
barked, “That’s ridiculous, General Dynamics pays us more than that!”
General Dynamics is a market leader in military manufacturing and defense
contracting. They make everything from combat vehicles to marine
systems, and they produce weapons and munitions. Their revenues are
approximately $32 billion, and they employ a workforce of roughly 95,000
- General Dynamics is a beast. But they were also one of the defense
contractors AEY, Inc. had beaten out for the Afghanistan contract.
“Look,” I said, “General Dynamics doesn’t have a contract for one
point one million grenades... I do!” I told the Bulgarian if he couldn’t meet
the price, AEY, Inc. would acquire the grenades through Sloboda in Serbia,
and I ended the call.
An hour later my cell rang. “We’ll accept your very low price,”
grumbled Georgi. Arcus was selling AEY, Inc. the HE (High Explosive)
grenades for $18 and the HEB (High Explosive Bouncing) grenades for
$23. They were selling them to the typical buyer for $27 HE and $30 HEB -
General Dynamics might have been getting a ten-percent break. AEY, Inc.
was going to make a fucking killing on those grenades: a profit of millions.
I LATER LEARNED that General Dynamics - who had a long history
with Arcus - was so sure they were going to win the Afghanistan contract
they had told Arcus to ramp up for production of the 40 mm grenades.
Arcus was in the process of doing exactly that when they got our email
notifying them AEY, Inc. had been awarded the Afghan contract.
A WEEK LATER, DOUDNICK AND I LANDED AT SOFIA
International Airport. I was about to invest my life savings in Task Order
Two’s grenades, so it seemed prudent to take a look at what I’d be spending
my money on. The airport was circa-1970s Soviet architecture, but well
maintained. Bulgaria was cold, not freezing, but cool; it lies along the Black
Sea in Southeastern Europe and is a predominantly urban and industrial
society.
Like its Soviet Bloc counterparts, Bulgaria had moved to a democratic
form of government when communist regimes across Eastern Europe
relinquished their power in the early 1990s. The Communist Party gave up
its monopoly on power and allowed multiparty elections - a smart move on
their part since neighboring countries were overthrowing and executing
their communist leaders. In October of 1991, the Bulgarian legislature
elected the UDF (Union of Democratic Forces), which immediately made
favorable democratic reforms in personal freedoms, property, and large-
scale privatization of its industries.
Arcus’ official driver picked Doudnick and me up at the airport and
took us to the tiny town of Lyaskovets, where we were checked into a
quaint little three-star hotel recommended by Georgi.
The city had seen better days; most of the buildings were from an era
that was long gone, and the more modern Soviet municipal structures were
in disrepair. Everything seemed slightly dirty or grayish. The roads were
horrible.
WE MET WITH BANKO BANKOV, one of Arcus’ owners, and
Georgi - who turned out to be Banko’s son - at Arcus’ factory in
Lyaskovets. Like most buildings in Bulgaria, the plant was a Communist-
era utilitarian structure: function over aesthetics. Everything was concrete
and steel. It had this huge Cyrillic sign, very reminiscent of the old Soviet
Union. I half expected to see the hammer and sickle proudly displayed over
the factory. It was eerie.
When the two Bulgarians met Doudnick and me in the lobby, they
were noticeably taken back, glancing at one another suspiciously. Banko
didn’t speak English - only Bulgarian and Russian - so most of our
conversations were translated by Georgi. “Mister Diveroli?” asked Banko,
through his son. “My father does not mean to offend... but how old are
you?”
“Twenty-one,” I responded, shaking the Bulgarian’s meaty hand, “but
I’ve been field tested a few times.”
The two men grinned at one another, and Georgi said, “I’m
impressed.” Georgi was in his early 30s and his father was in his late 50s,
handsome in a Bulgarian Alec Baldwin sorta way. I liked them both
immediately.
THE FIRST THING WE DID WAS TOUR THE FACTORY. The
facility was automated but not modernized - it wasn’t Lockheed Martin.
There were hundreds of sweaty, thick-necked laborers in denim coveralls,
feeding raw materials into loud heavy machinery that molded and stamped
out dozens of munitions parts. Clank. Snap. Spark. Spitting out projectiles,
fuses, and body assemblies.
We walked through the factory following the manufacturing process
along the line. Excess metal chips and shavings covered the grease-stained
concrete floors. Georgi said, “Almost the entire town works for the Arcus’
factory or for some facet of the company. From the sales and marketing
teams to the machinists and assembly workers.”
We watched the workers attach the steel pieces of the GP30 body
casings and projectiles together along multiple assembly lines, their
muscular hands snapping the cylindrical shells and propellant components
together. The end result: 40 mm high-explosive grenade, after grenade, after
grenade.
Several female laborers quickly packed 40 of the finished GP30s into
metal boxes, while another group of laborers sealed the containers up air-
tight and placed three of the metal boxes - 120 grenades - into wooden
cases, then nailed them shut and stacked them onto pallets, which would
eventually be hauled away by forklifts to Arcus’ warehouse.
After watching the entire process, Georgi asked, “Would you like to
test fire a few?”
“Aw...” I hadn’t thought to test them. I had never fired a live grenade
before. I had fired various machine guns on numerous occasions, but this
was way more than firing a few sub-machinegun controlled bursts at some
indoor shooting range, and I was excited. “Absolutely, we have to fire ‘em,”
I said.
 Arcus employed several ex-Spetznaz - weapons and munitions experts
who were the Soviet equivalent of U.S. Special Forces - as security. Georgi
and a couple of ex-Spetznaz took Doudnick and I to Arcus’ private range,
where we watched one of Arcus’ munitions specialists fire several GP30
high-explosive grenades at a distance of 100 meters (roughly 330 feet)
using an Under-Barrel Grenade Launcher attached to a jet black AK-74
assault rifle - a more modern cousin of the model-47. The distant explosion
sent a mound of dirt and blast fragments 20 feet into the air. Nothing within
that radius would have survived.
The ex-Spetznaz handed me the model-74; I aimed down-range and
shot off a couple bouncing grenades. The recoil of the assault rifle slammed
hard against my shoulder as the grenade left the tube and traveled through
the air. Upon impact, a small charge in the nose of the grenade detonated
and bounced 1.5 meters (roughly five feet) into the air, and the device
detonated. Those things are absolutely lethal.
THE INITIAL DEPOSIT MONEY HAD BEEN WIRED THE DAY
BEFORE I arrived. I had signed a faxed copy of the contract, but we both
wanted an original signed copy. The thing I liked best about Georgi and his
father was their professionalism. The Arcus conference room was filled
with inert examples of munitions the factory manufactured. The furnishings
were as benign as the munitions samples. It was their attempt at a western
style boardroom. After we had signed, Georgi asked me, “How long... you
been in the munitions business?”
“On and off for another company since I was fourteen-years-old. I
started my own company when I was seventeen.”
Georgi translated and Banko puffed, “Phff,” leaned back in his chair,
and shook his head. Georgi said, “And you just ordered over twenty-two
million dollars’ worth of grenades...” And I had charged the U.S. Army
over $30.7 million for them. “My father’s very impressed,” he said. “I’m
very impressed.”
GEORGI INSISTED HE AND I go out to celebrate. We ended up at a
gentlemen’s club. It had everything you would expect of a strip club: three
stages with stripper poles. Smoke and strobe lights. Beautiful Eastern
European girls and lots of tits and ass. I was sliding a folded Lev [Bulgarian
currency] into the thong of a blonde bombshell of a Bulgarian stripper when
Jenna called. “Hey, Bear, where are you?” she asked, hearing the music and
giggling girls in the background. “You at a club?”
 I could barely hear her over the music, but I knew I was in trouble.
“Don’t flip out, okay... I’m at a strip club, but its business, and…”
Jenna screamed, “We’re through!” and the phone went dead. It was
another version of the same fight we had had over a dozen times, and I
knew we would continue to have it as long as we dated. I can’t tell you how
many hours and thousands of dollars I spent on international phone calls
begging Jenna not to break up with me.
THE BOYS AT ARCUS insisted I visit Varna. “I can’t,” I told Banko,
“I’ve got too much work to do... I don’t have time for a vacation, and…”
“You have your cell phone and laptop, yes? We’ll pay for three days;
you must see Bulgaria. No excuses... Efraim,” said Georgi, “This is how we
do business; it would be an insult to refuse.” I didn’t want to be rude.
Varna was a vacation destination for not only Bulgarians but for
citizens across Europe - everywhere really - who flocked to the Black Sea
coast to enjoy the mild weather, beautiful beaches, hotels casinos, and
European-discotheques. It was everything you would expect of a typical
vacation town, lots of shops and clubs.
I stayed in the Kempinsky, a very nice German-style hotel with direct
access to the beach, an Asian restaurant and Italian cafe, a Spa and sauna,
indoor and outdoor pool, and its own casino; it was slightly dated, but very
classy. I spent my first day at the casino playing what amounted to five-
dollar hands of Blackjack and fielding calls from my staff back in Miami. I
remember the place was packed with Israelis screaming, “Yofi!” (beautiful
in Hebrew) every time they won a hand at Blackjack. “Yofi Yofi!”
Around seven o’clock, I was walking through the hotel’s lobby and the
concierge asked me, “Would you like a girl for the night, Mister Diveroli?”
I was offended - I don’t think of myself as someone that needs to pay for
sex - but there was so much about this country that was... off, by U.S.
standards. I was so stressed out between the Task Orders and arguing with
Jenna and my mother that it suddenly seemed like a good idea. I figured if
she got to the room and I felt too uncomfortable, I’d back out.
About an hour later, there was a knock at my hotel room door. She was
a 120-pound voluptuous Ukrainian in her early twenties: five foot six,
blonde with blue eyes, and curves you typically don’t find on a European -
a drop-dead work of art.
She seemed as shocked to see me as I was to see her. She stepped into
the room, “I was told an American businessman,” she said in broken
English. “You very young... very good looking.”
She smiled and I immediately relaxed. I didn’t know where to start.
She must have sensed it because she started unbuttoning my shirt and
whispered, “Svetlana... My name is, Svetlana.” I unbuttoned my blue jeans
and she slipped out of her cotton dress.
When I caught sight of her perfectly toned milky white body, I
whispered, “Fuck,” underneath my breath. She smiled, laid down spread
eagle on the king-sized bed and pulled me down; her legs wrapped around
my waist, she moaned and grinded against me; dug her nails into my back
and whispered, “This good?”
“It’s good,” I responded.
She did everything right, moaned and seductively bit her lip, and
breathed hard - everything you would expect from a pro. About halfway
into my typical routine, I was pounding away at her, and Svetlana moaned,
“You feel so good... Dis is so good.”
She looked up and unexpectedly our lips pressed together - we both
went rigid. Then she relaxed and kissed me; her wet tongue slid into my
mouth and for just a second I thought all the theatrics may have been for
real. A minute later she climbed on top of me and we were French kissing
like a couple of teenagers, our pelvises slapping away at one another until I
released.
She slinked off me and lay down on the bed. We stared at one another
and she grinned. “You’re Jewish?” she asked.
“Yes... how’d you know that?”
“The Israelis love me.”
“Well,” I smile, “you’re very sexy. But I’m not Israeli, just an
American mutt.”
She grinned again and we kept staring at one another; she brushed my
bangs out of my eyes. “Do you want me to...” she rolled her eyes toward the
ceiling searching for the English word. “Want me to... leave?”
The truth is you don’t pay a hooker for sex; you pay them to leave
when the deed is done. But I didn’t want her to leave - I liked her. “You can
stay... if you want.”
She flipped onto her stomach, exposing her perfect ass, and rested her
head in the palms of her hands. “I stay,” she squinted her eyes and asked,
“You have woman friend... wife, in America?”
“I have a girlfriend?”
 “You love dis girl?”
“Yes, I love her very much.” Despite having just slept with Svetlana, I
did love Jenna. This was only sex, nothing else, although I was becoming
more curious about her by the minute.
“I have no one... no man friend.”
We lay in bed wrapped in the sheets for most of the night, talking
about our lives and our families; I let her listen to several of my mother’s
voice mails, and she laughed and laughed, “What did you do to... you
mother.”
“Nothing,” I laughed, “I just do what I do. I’m not the good Jewish son
she wants, I guess... Plus, she’s a little crazy - Orthodox Jewish-mother
crazy. That’s way worse than regular crazy.”
The next morning we slept together again and ordered room service. I
watched her eat eggs and nibble on some toast, while I drank coffee and
orange juice; every once in a while she would glance at me and smile shyly.
When she was leaving I handed her the 100 lev and she looked a little
embarrassed. I asked her, “How much for staying the night and this
morning?”
“No... Nothing,” she said and kissed me on the cheek. “I wanted to
stay.” She handed me her cell number and left. I spent that day scheduling
trips to several Eastern European manufacturers and state-owned military
liquidators, but I couldn’t stop thinking about Svetlana. By four o’clock I
had called the Ukrainian and asked her to come to my hotel room.
The moment she walked in she couldn’t stop smiling. I slid the straps
of her sundress off her shoulders and it slowly slipped down Svetlana’s
torso; exposing her perfect round breasts, hips and vulva. “I’m glad you
called,” she said, as she slinked down onto the bed, and pulled me on top of
her. We both tugged at my clothes and several seconds later I was thrusting
away at her, while she ran her fingers through my hair and kissed me. “Take
your time,” Svetlana said softly, between deep breaths. “If you want, I stay
the night.”
Later that evening we had dinner in the hotel’s restaurant, where she
told me, “I work three months every year as...” she glanced around to make
sure no one was paying attention, and softly said, “as prostitute here in
Varna. Then I attend University in Ukraine.” Maybe it was a line, but I
believed her. I liked Svetlana, not like I liked Jenna, but I’d be lying if I said
I didn’t like her.
 When she left the next morning, I handed her the equivalent of a
thousand U.S. dollars. “No,” she said, shaking her head. “It’s too much... I
don’t deserve this much, it was one night.”
“Take it - it’s just money... You need it more than I do.” I saw her on a
couple of my return trips to Bulgaria, but she eventually went back to the
Ukraine for school. We emailed for a while... Maybe it was all an act, but if
it was I got the better part of the deal. Svetlana was the best Lev I ever
spent. It wasn’t love, but it was close.
CHAPTER SIXTEEN
 SOCIALISM
“Socialism is like a dream. Sooner or later you wake up to reality.” - Winston Churchill

NOT ALL MY TRIPS to the eastern bloc were productive; virtually

every state-owned company I dealt with was a waste of time. Most of the
time I traveled with someone else, for several reasons: sometimes it was to
help me out with inspecting the products, sometimes I needed a translator,
but mostly it was for safety. I wasn’t dealing with Dali Llama types. The
Eastern European arms industry was filled with ex-military and ex-state
security officers (KGB), corrupt politicians and mobsters. It was a murky
world of undesirables - everything from crooked government actors to the
most ruthless Slavic gangsters, and sometimes individuals that were both.
Heinrich had once suggested to me, “Keep someone with you as often
as possible. You are a wealthy American... anything could happen.” If
things went bad, or if someone snatched me up - which happens - I was
safer if there was a witness around. “You are going to want someone there
to call your family... tell them how much ransom to send the kidnappers,
and where to wire it. Before they started cutting off your fingers and
mailing them to your family members as an incentive to pay.” Yeah, that’s
what I was dealing with.
KEEP IN MIND, I WAS GEARING UP TO FLY tons of cargo into an
active warzone; al-Qaeda and Taliban insurgents were regularly firing small
arms and RPGs (Rocket-Propelled Grenades) at cargo planes arriving at
Kabul and the U.S. military airbase at Bagram. Every once in a while the
rebels would hit one, causing the commercial aircraft to crash, losing the
flight crew and worse: the freight. Despite my best efforts to do so, this
stuff wasn’t insured!
As a result of the hostile flight conditions, UPS and Federal Express-
type professional outfits weren’t willing to risk their planes. What I ended
up with was Eastern European and former Soviet Union (CIS) based
carriers flying aging aircraft with poor maintenance records and less-than-
professional crew.
Every few weeks, there was a report out of Afghanistan of a
commercial cargo plane owned by a Georgian company plowing into a
mountain - killing eight - or a Pakistani company’s aircraft slamming into a
mountain - killing five.
Some of these carriers didn’t even have to leave the ground. I recall a
Russian transportation aircraft taxing into another carrier on the tarmac at
Bagram air force base - no casualties - and a Turkish cargo plane running
off the runway and smashing into several mud brick houses - killing four.
Those types of things happened all the time. So you can imagine what
it was like to deal with those freight companies. It wasn’t like shipping
something through the U.S. Post Office.
DOUDNICK AND I TRAVELED TO UKRAINE to meet with Vitali
Popov, the director of the state-owned freight company, Ukrainian Cargo
Airways. We arrived at Kiev International Airport around ten o’clock at
night, it was cold and dark, not that there was much to see.
Ukraine is the second largest country in Europe, just under Russia;
both were part of the Soviet Union until its collapse in 1991. The two
countries argued over many issues after the dissolution of the U.S.S.R.,
including the portion of the Soviet national debt each country should
assume, the division of the countries’ nuclear arsenal, and its military
installations. In the end, Ukraine ended up a bankrupt ex-Communist
country with a lot of weapons.
The city of Kiev is the capital of Ukraine; many of its buildings,
cathedrals, and catacombs date from the Middle Ages - kind of eerie, but I
liked it. It also has modern manufacturing facilities and chemical plants
actively polluting the country. That’s the type of place it was: scary and
toxic. The city has some attractive parks, museums, and a University, but
you wouldn’t want to live there.
Ukraine is one of those countries where you don’t want to drink the
water - not because of Montezuma’s revenge, but because of the 1986
Chernobyl nuclear power plant disaster, near the city of Kiev. Nuclear
fallout from the accident caused an estimated 7,000 deaths and gave
Ukraine, Belarus, and Russia one of the highest rates of cancer and birth
defects on the planet. So you don’t drink the water unless you want your
kids to have extra limbs or a third eye.
 We stayed at the Intercontinental Hotel, an incredible establishment:
luxurious suites, an indoor pool, and three restaurants including a
phenomenal French bistro. Vintage wines and crystal chandeliers. It had a
world-class strip club or “social elite” club on the top floor of the hotel with
a panoramic view of the entire city; the B-Hush served rabbit-foot cocktails
and caviar hors d’oeuvres. There was a great jazz band and gorgeous
strippers dancing on dozens of private stages.
Doudnick and I grabbed a couple Ukrainian beauties and spent our
first night in Kiev drinking vodka and getting lap dances in a private VIP
room.
The next morning I rolled out of bed with a massive hangover. I
shoved a Parliament in my mouth and smoked the cigarette while taking a
shower. I felt that shitty. But like a good soldier, I drank a liter of coffee and
a pitcher of orange juice, and made our nine o’clock appointment with
Popov ready for battle.
THE HEADQUARTERS OF UKRAINIAN CARGO AIRLINES in
Kiev were less than impressive: old Soviet-era construction and 1970s-style
furniture. It had lots of cracked plastic and chipped veneer, but Popov’s
office was in better shape, a dorm room filled with an eclectic array of
American sports memorabilia. The guy had an aquarium behind his desk
filled with exotic tropical fish, a massage table, and expensive furniture.
When Popov and his underling, Victor, entered the office, I thought,
You’ve got to be kidding. Popov was a bloated middle-age man wearing
rumpled pajama bottoms, a New York Jets T-shirt, and fuzzy slippers. I was
in an Armani suit bearing gifts of Johnny Walker Blue label and Mont
Blanc pens - and this guy stumbles in wearing pajamas and smelling like
cheap booze. Sure, I was an alcoholic too, but I was a functioning alcoholic.
I always managed to get my shit together when it came time for business!
To make matters worse, Popov was extremely unpleasant, rude and
unprofessional. There certainly appeared to be some mental health illness
issues there, but I’m not a psychiatrist, so I can’t say for sure.
Our entire conversation was conducted through Doudnick and Victor,
acting as interpreters; it heated up quickly, while Popov drank my gift he
repeatedly barked, “Nyet! Nyet!” He wouldn’t budge on the freight prices.
“Fuel expensive,” Popov griped while staring at me through bloodshot
eyes. “I’ve got bosses, pay da bosses.” Apparently he had other government
and military officials that he had to take care of. “Nyet!”
 Eventually, Popov dropped to a slightly more reasonable price when I
agreed to increase AEY, Inc.’s shipping schedule. The problem was, shortly
after Ukrainian Cargo Airways started shipping AEY, Inc.’s cargo, the
airline got “black listed” by the United Nations for illegal arms shipments
to a variety of embargoed African nations.
I called a dozen carriers in Turkey, Turkmenistan, Kazakhstan,
Moldova, and a handful of other countries. No one would take the business.
We eventually found out that Azerbaijan was seldom issuing over-flight
permits to any carriers other than Silk Way Airlines. Silk Way Airlines is
owned by relations and family members of the country’s president, Ilham
Aliyev. So, it’s practically a state owned airline. It was a Cartel move on the
part of the Azerbaijanis, but there wasn’t anything we could do about it.
THE HIGHLIGHT OF THE TRIP ended up being the River Palace, a
nightclub and casino. The place was filled with Ukrainian women: thin,
gorgeous, model-like beauties. Red velvet furniture and paisley wallpaper.
The place was classy on a budget, which came off as cheap and tacky, and
slightly sleazy. The kind of place where you’re constantly checking for your
wallet. Doudnick and I were at the bar buying drinks for half a dozen
women at the equivalent of ten bucks a round - laughing and flirting - when
one of the better-looking ones yelled over the blaring music in broken
English, “What you... do work?”
I made a gun with my index finger and thumb, “Paruzje,” I said in
Russian. (Weapons.)
“Ah, guns,” she said, took a sip of her drink and continued, “Dis is
dangerous.” She jokingly asked, “You ever kill a man?”
“I hurt someone’s feeling once.”
She smiled and leaned into me, slid her hand on my crotch, and
whispered, “You take me home, yes? One hundred Grvna [Ukrainian
currency].” My nice Ukrainian girl’s a hooker - but a sure thing. Another
girl leaned into Doudnick’s ear, and he glanced nervously at me and then at
our companions.
I laughed, “When in Rome, bro...” I whispered to my nice girl, “How
much for two?”
“Two?” she glanced at her friend, “Two hundred, for two.”
“If I’m buying in bulk, I want it for...” I looked them up and down,
“One hundred and fifty Grvna.”
 Twenty minutes later, I was in my hotel room playing slap and tickle
with two exquisite professionals. They were very businesslike, with their
own Trojans and KY jelly (yes, they have that in Ukraine also), and made
me swap out the condom every time we switched up - went through a whole
box... It was an amazingly clinical sexual experience. It wasn’t love, but it
was also a lot less expensive and aggravating.
IN ROMANIA, Doudnick and I met with Romtehnica’s director, a
salesman, and a couple of support staff at their offices in Bucharest. It’s a
state-owned company in charge of liquidating excess Romanian military
equipment. The place was filthy.
In late 1989, crowds of Romanian citizens demonstrated for
democracy throughout the country and were fired upon by government
security forces controlled by Romanian president and Communist Party
leader Nicolae Ceausescu - thousands of protesters were killed in what is
known as “The Romanian Bloodbath.”
The Romanians revolted against the dictatorship of Ceausescu; army
units joined the revolt, and fierce fighting between the army and
Ceausescu’s security forces followed. On December 22, Ceausescu and his
wife were captured trying to flee the country. They were charged with
embezzlement of government funds and murder. Within three days, they
were tried, found guilty, and executed on December 25th of 1989 -
Romanians don’t fuck around. The following year, the country elected a
non-Communist party and officially cut ties with the Soviet Union.
Everything in Romania is grey: the utilitarian buildings, the bad roads,
the mountains, even the trees have grey in them. Everything looked like it
was lightly dusted in soot. Communist-era industrialization caused serious
environmental degradation throughout the Balkans. Nearly all industrial
sites contributed to air pollution, especially the iron and steel mills,
chemical plants, and thermal power plants. That pollution was particularly
severe in Romania; moreover, the Adriatic and Black Sea and all major
rivers were polluted by waste materials. Again, don’t drink the water.
It’s the kind of place you kick open the doors and don’t eat anything
that doesn’t come out of a sealed plastic wrapper, and you only drink
bottled water - not Romanian bottled water! The director of the company
offered Doudnick and me some type of brownish booze in a dirty glass... I
genuinely didn’t want to drink out of it. Everyone at the meeting was lazy
and inept. Everything was, “No!” or “We’ll have to check on that.”
 That’s the problem with ex-communists: it’s the 99 percent that give
the one percent a bad name. This was a country of 25 million people, a
former Soviet satellite with a standing army of near 200,000 soldiers, and
the most AEY, Inc. could squeeze out of them was around 1,000 82 mm
white phosphorous smoke mortar rounds - pathetic!
BEFORE LEAVING EASTERN EUROPE, Doudnick and I swung
into Amsterdam to check out the Red Light District. We got stoned on
Amsterdam Gold; walked the streets of the infamous area, and watched the
naked girls dancing behind the windows of the bordellos.
We were watching two mocha Barbies straight out of Africa making
out just behind a thin sheet of glass. Doudnick got a call from the office and
stepped away, but I over heard him say, “No, we’re swamped...”
I had hired Doudnick for $75,000 a year - $25,000 more than he was
making at his last gig working for a law firm doing real-estate closings - but
it didn’t take me long to realize he was an asset. I immediately bumped him
up to $100,000. He was a leader. Doudnick had an alpha personality. As
much as I liked that about him, it became an issue.
Truth is, Doudnick didn’t like me. He made snide comments and
talked shit behind my back. At first I thought it was because I was young
and in charge; eventually I realized it was jealously: I was making millions
and he wasn’t. Jenna used to say it was because he wanted to be me. I
wanted to tell him it wasn’t all it seemed; I had business issues, addiction
issues, commitment issues, control issues, mom issues, relationship issues...
issues.
Just before Doudnick hung up the cell phone, he said, “Yes, I’m sure,
we’re not bidding on ‘em.”
“Not bidding on what,” I asked. He told me not to worry about it, but I
was worried about it and I pushed for an answer. “What aren’t we bidding
on?”
“An Army solicitation for thirty thousand AKs - the deadline’s
Monday - but we’re too busy, so we’re passing.”
First off, that wasn’t his call to make; second, we already had several
sources for cheap Kalashnikovs; third, they were a decent moneymaker and
relatively easy to source and deliver. “Call ‘em back - we’ve got a twenty-
five percent profit margin on AKs right now. That’s seven hundred and fifty
thousand dollars. Anyone on staff can handle that order.” Hell, Packouz
could even handle it, and he barely ever came in anymore.
 “Efraim,” sighed Doudnick, shaking his head as if he were scolding a
small child, “We’ve got our hands full. You’ve gotta stop taking every
contract that comes our way. We’re overwhelmed. You’re going to drive
this company into the ground. You already have orders in-hand for more
than 60,000 AK-47s that need to be delivered to Baghdad that are behind
schedule according to the delivery contracts. You’re pushing everyone too
hard.”
“That’s what I do, I push! Now, call ‘em back and bid on ‘em - ninety-
nine per,” I grumbled. “That’s what you do!” I stomped off and left him
standing on the sidewalk.
Maybe Doudnick was right. Maybe AEY, Inc.’s staff was
overwhelmed. But I was young and inexperienced. I had an all-or-nothing
philosophy. You were with me or against me. I didn’t do moderation - in
anything.
I stepped into the brothel - which was set up like a typical bar with
stools and booths - and asked the guy behind the counter, “How much for
the Nubian Princesses?” I motioned toward the window display with my
chin, “Both of ‘em.”
A couple minutes later I was led into a private room by the two
hookers. They were the color of Carmel Macchiato and Dark Chocolate.
Now I’d never slept with a black girl before, but I’d also never seen one
who looked as good as these two. Smooth round gravity-defying breasts
and asses. Curves like an hourglass; tight little waists and hips. Skin like
silk. They both had full supple lips as soft as cotton.
The whole time I was thrusting away at these two chicks I couldn’t
help but think, If my mother ever finds out, she’ll disown me. They smelled
like cocoa butter, and tasted like mocha… and two thousand years of
oppression.
WHEN I SAW DOUDNICK AT THE AIRPORT two days later, he
told me AEY, Inc. had bid $3 million on the assault rifles. “Even if we’re
awarded the contract,” he jabbed, “I’m not sure we have the ability to
deliver on it.”
“We’ll get it, and we’ll deliver on it,” I said. “And the sooner you get
with the program the happier we’ll both be.” It was always a struggle with
him. Neither of us could give in - or would.
I WASN’T BACK IN MIAMI two weeks when Heinrich called to tell
me, “You have to come to Montenegro...” He was a personal friend of
Zoran Damjanovic, the Executive Director of Yugomont, the newly formed
government liquidation company in charge of selling off the budding
nation’s excess armaments, which it had inherited from its recent divorce
from Serbia. “It is like a bloody going-out-of-business sale here.”
Doudnick was busy arranging a dozen shipments to Kabul and we
weren’t exactly getting along, so I called my cousin Joe at his job - some
shitty restaurant in downtown Miami - and asked, “You wanna go to
Montenegro?”
“Fuck yeah!” Joe was in his 20s, a well-built, green-eyed, average
looking guy - a pothead, but hard working and eager to learn the arms
business. We jumped on the next flight to Podgorica, the capital city.
The breakup of the Yugoslav federation after the collapse of the Soviet
Union left “the third Yugoslav” a federal republic comprised of Montenegro
and Serbia in 1992, but like most marriages, it began to deteriorate over the
next ten to 15 years, and on May 21st of 2006, a referendum on
independence withdrew Montenegro from the union, declaring Montenegrin
independence. The tiny little country of roughly 600,000 was in the middle
of an economic crisis, and the first thing they did - before the ink was dry
on the referendum - was start selling off their military armaments.
We met Zoran, a Count Dracula-looking Slav in his late 50s with a
perpetually sinister grin, at his office in Podgorica. We all climbed into
Zoran’s vehicle. He and Heinrich were drinking some homegrown
Montenegrin hard liquor called Grushka, made from pears, and they were
hammered. Zoran was all over the road, swerving and running stop signs,
waving at the police with no concern of getting a DUI - Zoran was one of
the guys running the tiny country.
When we pulled into the military installation a soldier approached our
vehicle; Zoran handed him the bottle, barked something in Serbian, and the
soldier opened the perimeter gate. Inside the base was a military hardware
and munitions flea market. The moment we passed through the barbed-wire
fences I noticed the base was in extreme need of maintenance: concrete
structures with exposed rebar, everything in desperate need of a fresh coat
of paint.
There were nearly three-dozen MiG [Mi(Koyan) & G(urevich)] 17s
and 19s, the old boxey black Soviet-designed high-speed, high-altitude jet
fighters, parked on cracked asphalt pavement. But these had seen better
days. There was rust and worn paint on them.
 There were over 10,000 air bombs - these huge ten-foot-long
cylindrical grey bombs - stacked on disintegrating wooden pallets eight feet
high on an unsecured asphalt strip exposed to the elements. An explosive
disaster waiting to happen. “Very cheap,” grunted Zoran, as we walked
through several hundred stacked rows of the rusting bombs. “They are
designed for carpet bombing. They hit ground and burn off all air within...
one hundred meters - kill everything.” He lit a filterless cigarette, and said,
“Good price.”
“They sound like a lot of fun,” I laughed nervously, “but I don’t need
‘em.”
“Yes...” he grinned. “We can’t give ‘em away.”
They had nearly one hundred Armored Personnel Carriers in varying
degrees of inoperability - but I wasn’t shopping for birds of prey or troop
transporters, I was there to buy small arms and munitions.
ZORAN LED US INTO THE FIRST of a dozen light grey warehouses
on the base. The first warehouse held over 100,000 Kalashnikovs, both
fixed and folding stock models, packed in wooden crates; row after row of
boxes lined the walls. I was astonished by the sheer number of weapons. I
was inspecting a RPK machinegun when Jenna called. “What’re you
doing?” she yawned - it was roughly 8:00 am in Miami.
“I’m standing in a repository with over ten million dollars’ worth of
Kalashnikov rifles...” I involuntarily chuckled, “owned by a country in the
middle of an economic meltdown... and it’s all gotta go.”
“I see,” said Jenna, and I could feel her smiling. “So you’re in heaven,
is that it?”
“Absofuckinglutely.”
“Well,” she giggled, “have fun Bear. I’m going to work.”
Another warehouse had aisle after aisle filled with Portable Surface-to-
Air Missiles and hand grenades. “There’s some great stuff here,” I said to
Zoran as we passed several racks of Air to Ground rockets stacked on steel
girders.
“Da, very good,” he responded, placed his cigarette between his lips
and pulled open the door to another warehouse packed with munitions.
There was a soldier guarding the place, sitting on a pallet of plastic
explosives while smoking what looked like a hand rolled cigar. We were
standing in a room filled to the ceiling with 60 mm and 82 mm high
explosive mortars and rockets, and ammunition cans filled with the Soviet
equivalent of U.S. C4. The plastic explosive is stable, but the mixture of
munitions powder and dust was volatile stuff, and these guys were flicking
ashes everywhere. I looked at Heinrich sideways and grimaced. He
shrugged and said, “Relax Efraim, they know what they’re doing.”
When Zoran dropped his cigarette to the floor, and ground it out with
the heel of his boot, I winced. I seriously thought, We might not make it
outta here.
“You buy,” said Zoran, and he motioned to the stockpiles of munitions,
“Yes?”
“Yes,” I answered, “we buy.”
I cracked open my laptop right there, dropped it onto a pallet of
mortars and started typing out a contract. That night Zoran signed and the
following day I wired a deposit to Yugomont’s account. AEY, Inc.
purchased a mixture of over 30,000 82 mm and 60 mm mortar shells and
illumination mortar rounds, S-5 and S-8 air to ground rockets for the
Afghanistan Security Forces, and a mixture of over 30,000 AK-47s, RPKs
and DShK 12.7 mm machine guns for the Iraq Security Forces.
Sometimes it was that quick. Other times it was three months of back
and forth negotiations with no results.
CHAPTER SEVENTEEN
 THE LAND OF EAGLES AND THE GODDESS OF
DEMOCRACY
“If an expert says it can’t be done, get another expert.” - David Ben-Gurion

THE INTERMEDIATE-SIZED 7.62X39 MM ROUND of the AK-47

assault rifle isn’t an overpowering full-size rifle round or a small
submachine cartridge. No, the 7.62 mm round is just right for close- to
medium-range combat. As a result, 7.62 mm ammunition is in great
demand - and that was a problem, since AEY, Inc. needed to acquire half a
billion rounds over the course of the Afghanistan contract.
Availability wasn’t the only issue. Most former Soviet and Eastern
European countries had large stockpiles of AK ammunition or factories
ready to produce the rounds. It was their willingness to part with what
might literally be their only strategic reserves, and the cost, that were at
issue. At any given time, there were half a dozen countries in Africa buying
up millions of 7.62 mm rounds. And in some cases they were paying three
to four times what AEY, Inc. needed to acquire the ammunition for to make
any type of profit. The advantages we offered were that I could buy in bulk,
and it was clean: no bullshit, since the U.S. Government was providing all
the paperwork.
IN EARLY MARCH OF 2007, I received a call from Heinrich
regarding Albania’s stockpile of ammunition. “Efraim,” said Heinrich,
“they’ve got enough in reserve to fill the remainder of Task Order Two - all
one hundred and twenty million rounds of it, and then some.”
“And it’s serviceable?”
“Yes, yes... like new, it’s all hermetically sealed in metal boxes and
wooden crates. Standard military packaging.”
Albania is a small nation in the Balkan Peninsula of Southeastern
Europe, one of the least developed countries in the region. Following the
collapse of the Marxist government in the early 1990s, democracy brought
privatization, greed, and corruption to Albania. The country did, however,
have one thing going for it: millions of tons of stockpiled ammunition.
What I didn’t know was that from the late 1950s to the 1970s, the
former Communist government of Albania had received the bulk of its
ammunition - over 1.5 billion rounds - from the People’s Republic of China,
due to the military alliance between the two countries.
Heinrich was negotiating with MEICO, the Albanian state-run Military
Export Import Company that was in charge of liquidating the country’s
excess weapons and munitions. In Eastern Europe - particularly Albania -
practically all of the armaments were excess. If you had the cash to buy it, it
suddenly became an “excess” armament.
“If the numbers work, we have a deal, but zero bullshit, Heinrich. I
can’t risk it; this is the biggest contract we’ve ever had. It’s a make it or
break it deal for me.” I had everything in this deal - and millions of dollars
of other people’s money.
I REMEMBER I’D JUST HUNG UP THE PHONE when Jenna
stopped by the office - just to let all the pretty young girls I had hired know
she was “the girlfriend.” It was a common thing. She would walk around
and smile politely at everyone - especially the female employees. Jenna
would sit at an empty desk and check her email account. Make a couple of
calls from the office landline. Really let everyone know she could do
anything she wanted to do. Jenna did everything to mark me as her territory
but piss on me (in public, anyway).
IN EARLY 2007, THE PRICE OF CRUDE OIL AND, IN TURN,
AVIATION FUEL SKYROCKETED. Between January and April refined
jet fuel prices spiked over 40 percent, to nearly $100 a barrel. It was
something I hadn’t accounted for when bidding the Afghanistan contract,
and it was killing my profit margin. Most of the ammunition came in large
heavy wooden crates, but the actual rounds were sealed in large metal
containers known as “spam cans.” Each can generally contained between
one and two thousand rounds.
Roughly 30 percent of the weight associated with shipping the 7.62
mm rounds was the heavy wooden crates and metal cans. I needed to shed
that excess weight. So, I shot off an email to Major Ronald Walck with the
U.S. Army Terminal Operations
Ron... Whenever [AEY, Inc.] deals with surplus materials, we send a
quality control team to inspect the goods... we open every metal can of
ammunition to perform a complete visual inspection along with extensive
sample test firing. We repackage the ammunition... loose in cardboard
boxes strapped to euro pallets... [W]e wanted to confirm with you that this
packaging [is acceptable].
The Major responded:
[N]o Problem. I will be there when we unload the aircraft. I will sign
for the cargo.
I then sent my “quality control team” (which consisted of Alex
Podrizki) to Tirana, the capital of Albania, to visually inspect, test fire,
oversee the repackaging, and handle any other issues that might have come
up like delivery, licensing, and the Albanian mob, which was pretty much a
branch of the government - a very powerful one. Plenty could go wrong.
The city of Tirana is like most ex-communist cities of Eastern Europe:
a series of basic concrete structures in a variety of stages of disrepair. Lots
of peeling paint and cracked stucco. Bad roads and cheap cars.
ON APRIL 20TH OF 2007, I was at the office when I received a
panicked call from Packouz. “Efraim, Alex is at the warehouse and he’s
saying the Meico ammunition has got Chinese writing all over it - every
single box.”
What? Is what I said when I found out MEICO had several million
rounds of Albanian manufactured 7.62 mm rounds ready to ship. However,
they were about to run out of that particular stockpile and were planning on
selling AEY, Inc. their excess Chinese 7.62 mm rounds in its place - that
could be an issue.
IN LATE MAY OF 1989, roughly 1,000,000 peaceful protesters filled
Peking’s Tiananmen Square, demanding democratic reform. Despite strong
warnings, the crowd refused to disburse. On June 3rd, the Chinese
Communist Party ordered the People’s Liberation Army to move against the
protesters; they killed hundreds of Chinese citizens and arrested thousands.
As a result of the Tiananmen massacre, the U.S. Government and the
European Union placed an embargo on all Chinese weapons and munitions
on June 26th of 1989.
As if that weren’t enough, I recalled seeing a clause in my contract that
specifically prohibited me from procuring ammunition from the Chinese. I
immediately called Heinrich. “We’ve got a problem,” I said, “MEICO’s
ammo is Chinese.”
 “Okay. Okay,” Heinrich responded. “But you knew this, Efraim...” I
had had no idea the Albanian AK rounds were from China. “We delivered
the same ammo to Germany last year. No problem.”
Through Heinrich and MEICO, AEY, Inc. had shipped a couple
million rounds - of what I thought were Albanian AK and other assorted
machinegun rounds - to the U.S. air base in Stuttgart, Germany for an Air
Force Foreign Weapons Familiarization program. Heinrich went on to tell
me that one of AEY, Inc.’s fiercest competitors - Taos Industries - bought
and sold this same Chinese ammunition to the U.S. all the time. “It’s okay,
Efraim. It’s pre-embargo; the ammunition has been in Albania for forty
years. It’s okay.”
MY TYPICAL PHILOSOPHY is that it’s better to ask for forgiveness
than permission. I started thinking about it and decided that weapons and
ammunitions purchased and shipped prior to the Chinese embargo were
exempt. I had seen pre-embargo Chinese AK rounds sold on the Internet in
the U.S. several times. But I wanted it in writing prior to investing the
millions of dollars required to complete the Albanian operation, in case any
of the shipments were rejected by the Army. However, instead of consulting
with an attorney who specialized in these type of regulatory matters, as I
clearly should have, on April 23rd of 2007, I made the huge mistake of
impulsively shooting off an email to the State Department’s DDTC (Deputy
Director of Defense Trade Controls):
[AEY, Inc. has] been offered Chinese Ammunition that has been sitting
for 20 years with a company in Albania. Is it legal for us (as a US
company) to broker this material?
See, I thought I was a pro, but I wasn’t. I had a Department of Defense
contract with a Defense Federal Acquisition Regulations clause prohibiting
the acquisition of ammo from Communist Chinese military companies
incorporated into it, but I thought to contact the State Department because it
dealt with the international movement of munitions, plus I had a contact
there from previous licenses and opinions we had obtained. Instead, I
should have been asking the Army, which was who I had the contract with.
But I fucked up, royally!
Within a few hours I received an email from the Deputy Director:
Russian-style, Chinese origin ammunition currently in Albania, U.S.
policy, per part 126.1(a) of the ITAR, which addresses embargos on exports
and imports [of which this was neither, as it wasn’t being exported from or
imported to the U.S.] of defense articles and defense services, destined for
or originated in proscribed countries [China], would not authorize the
transaction.
Still, I knew I was right. Besides, the Defense Federal Acquisition
Regulations specifically restricted the acquisition of weapons and munitions
from Communist Chinese military companies, however, the only
acquisition I was making was from MEICO in Albania. At the time, I
believed that acquisitions prior to the embargo were exempt. So I called
Alex and told him to have the ammunition repackaged. “Alex,” I said,
“Make sure to yank out everything that has any Chinese writing on it.” We
were doing nothing wrong, so why risk giving the impression that we were?
Why tempt fate?
ALEX CALLED XHOI, a cardboard manufacturer in Tirana, owned
by Kosta Trebicka, a wiry Albanian in his late 40s with a potbelly and
thinning hair. They met at a grungy bar in Tirana, where Alex explained
what AEY, Inc. needed - the thickness of the cardboard to be manufactured,
the amount of labor needed to repackage the rounds, and the removal of all
the paper - containing the Chinese script - wrapped around the bundles of
rounds, “What’ll it cost?”
Repackaging the heavy wooden crates and metal cans to save on fuel
costs made sense to Trebicka, but removing the paper seemed excessive.
“Why can’t we leave them wrapped in the Chinese paper?” Trebicka asked.
“This is a lot labor.”
“That’s my business...” Alex said as he got up to leave. “Come up with
a price and let me know.”
Alex, Trebicka and I negotiated on and off for several days. Eventually
Trebicka quoted a reasonable price of $280,000 for the entire job, which I
accepted.
CHAPTER EIGHTEEN
 ORGANIZED CRIME
“Man is very well defended against himself... The actual fortress is inaccessible, even invisible to
him, unless his friends and enemies play the traitor and conduct him in by a secret path.” - Friedrich
Nietzsche

IN EARLY MAY OF 2007, after Alex told Trebicka to remove all the
ammunition and repackage it, he became suspicious. It’s common
knowledge that the U.S. Government pays for information, and Trebicka
thought he might have some worth selling. I later found out he called the
U.S. Embassy and arranged to meet with the economic attaché, Robert
Newsome.
The meeting took place at the Chocolate Restaurant in downtown
Tirana in early May of 2007. The two men sat at a small wooden table
under a large umbrella in an open-air portion of the dining area. They
discussed Trebicka’s suspicions. “This ammunition is covered with Chinese
writing; this is illegal, yes?”
“No, that’s not a problem,” said Newsome. “NATO, the U.S. and the
E.U. have been trying to get the Albanian government to reduce its excess
small-caliber weapons and ammunitions stockpile for years. We want it
replaced by NATO style munitions, and apparently our boys need it in
Afghanistan - pronto.”
“But they [AEY, Inc.] want me to remove all the Chine…”
“Mister Trebicka,” interrupted Newsome, “the U.S. Army needs that
ammunition because the Afghanistan National Army needs it. This
company AEY has a legitimate Department of Defense contract to deliver
it, and it is my understanding that they are the largest supplier of munitions
to Afghanistan. It’s perfectly legal.” He finished his coffee and just before
leaving, the attaché said, “Do yourself a favor and drop it; do what you
were hired to do, make your money, and leave it alone.”
THE CONFIRMATION THAT THE CHINESE AMMUNITION WAS
LEGAL only switched Trebicka’s attention to the actual deal to purchase
the ammunition from MEICO. He contacted someone inside the
organization and found out that Ylli Pinari, head of the Albanian state-run
Military Export Import Company, was selling the ammunition to a shell
company called Evdin, Ltd., based in Cyprus - owned by Heinrich Thomet -
for $22 per 1,000 rounds. Heinrich was then reselling it to AEY, Inc.
Trebicka then contacted me with the information. “I get you better
price, you give me commission, yes?”
“Depends on what you have to say,” I replied. Trebicka gave me the
creeps - he was sleazy. Trebicka told me that Heinrich was buying the
ammunition for $22 per 1,000 rounds, and I was pissed.
Heinrich was selling them to AEY, Inc. for $33 per 1,000. Granted, I
was selling them to the U.S. Army for nearly $100 per 1,000, but that price
included overhead, licensing, shipping, fuel and hopefully a decent profit.
He had told me that the Albanians were charging him $30 per 1,000, and he
was only adding a ten percent margin, a modest and reasonable fee for the
work he was doing. “Don’t try to go around me, Efraim,” he told me.
WHEN I GOT HEINRICH on the phone I was furious. “What the
fuck, Heinrich... twenty-two dollars and I’m paying you thirty-three, you
know it costs me more than double the price of the ammo just to ship it...”
“Okay now, Efraim, calm down,” said Heinrich. “Whoever is telling
you this is lying; no one could get them for twenty-two per.” I kept
hammering him until he admitted to the deception. “Okay, okay, but you
must understand that money has to go to the minister and Pinari...
everybody needs to be taken care of in Albania. Otherwise, there’s no deal
to cry about.” Basically Heinrich was saying that after paying off several
officials, the price to him was actually around $30 per 1,000 rounds.
PISSED OFF AT HEINRICH and unconvinced, I called Trebicka and
asked him to arrange a meeting with Pinari, and I hopped on the next flight
to Albania. I arrived on May 23rd of 2007, at the International Airport just
outside of Tirana. I checked into the Sheraton Hotel; it was tall and opulent,
a luxurious onyx tower and without a doubt the nicest structure in the entire
country.
Pinari’s driver picked Alex and me up in a 20-year-old brown
Mercedes - a rusted out beater. On the drive to the meeting, it crossed my
mind that this was the type of move that could get me killed. Meeting with
high-ranking officials of dubious character to cut murky arms deals was
dangerous in a country as corrupt and backward as Albania. People went
missing and had “accidents” all the time in that country. We were taken to
an abandoned office building; it appeared to be under heavy renovation or
possibly even condemned.
THE OFFICE WAS FILLED WITH SMOKE; it smelled like mildew
and cigars. Pinari and several other hard-looking characters were sitting at a
chipped wooden table cluttered with paperwork and boxes of 7.62 mm
rounds, having a heated discussion in Albanian. Yellow paint was peeling
off the walls and it was damp. Pinari was an overweight balding Eastern
European in his late 40s, wearing a cheap suit. Mihal Delijorgji and his
bodyguard were heavy, thick-necked and weathered; both had rudimentary
gulag style tattoos on their hands and arms. A third, Scandinavian type,
with light features, Skelzen Berisha, sat quietly listening to the discussion -
turns out he was Sali Berisha, the Albanian Prime Minister’s son. Based on
the tone of their conversation, it was pretty obvious Delijorgji was calling
the shots, dictating terms for the sale of military equipment and munitions -
state-owned assets.
Delijorgji was an iron merchant with a criminal history for forgery and
tax evasion; yet he somehow managed to consistently be awarded large
defense ministry contracts to dismantle tanks, armored vehicles and
munitions. By taking care of the right officials in the military and defense
ministry, Delijorgji had turned Albania’s excess armaments and munitions
into his personal ATM.
“Let me introduce you to my boss,” grunted Pinari in a thick Albanian
accent. I couldn’t believe it; he actually called Delijorgji his boss. He might
as well have introduced him as the defense minister - he was running the
place. Pinari said something to Delijorgji in Albanian, he quickly
responded, and Pinari said to me, “It’s thirty U.S. per one thousand, any less
and I’m better off destroying it for the pieces.” He scooped up a handful of
AK rounds and haphazardly tossed them on the table.
I already knew that an outfit named Southern Ammunition of South
Carolina was aggressively importing ammunition components from
Albania, including brass casings and projectiles. Which may or may not
have been illegal since Southern Ammunition was subject to a similar
prohibition as AEY, Inc. on the import of Chinese munitions into the U.S.
Regardless, the Kalashnikov rounds I was interested in were steel-cased,
with steel-core projectiles, making them illegal and practically worthless to
Southern Ammunition, for purposes of the U.S. commercial market.
 “Look,” I said, “Southern Ammo only wants the brass cased stuff;
besides, breaking down the rounds will take time and it’s dangerous, you’ll
need trained specialists, licensing, and inspections; and in the end, they still
might not have a large enough market for them in the U.S., which means
you won’t get paid - ”
“I have contract!” barked Pinari and slapped his hand down on several
loose papers - startling me and Alex. Delijorgji tightened his tattooed
fingers into a fist, his bodyguard slid his hand underneath the lapel of his
cheap sports coat, and for just a second, I thought, $30 per 1,000 sounded
more than fair... but I kept pushing.
“Look gentlemen, let’s not get crazy here. For twenty-five U.S. I’ll
take seventy-four million steel-cased rounds. Quick and clean.”
“No,” glared Pinari. “Southern Ammunition pays more for... parts.”
And in a moment of insanity I glanced at Alex and said, “State
Department might have an issue with that...”
Delijorgji stood abruptly - tipping over his chair with a crash - the
bodyguard stepped toward me, and Pinari held up his hand and snapped in
Albanian, “Te ndaluar! [Stop!]” Delijorgji sneered at me and spat out
something in Albanian. Pinari looked in my eyes and said, “This is a
dangerous game you’re playing, boy.”
Alex went white and I tried desperately to keep my composure, but I
was trembling inside. “Pinari, all I’m saying is... if I don’t get that ammo to
Kabul, they’re going to be firing slingshots at the Taliban within a month,
which won’t look good for me or Albania, considering you’re already listed
as our subcontractor. The U.S. Government might start asking questions...”
(or worse, AEY, Inc. would default on the Afghan contract), “and I’m not
paying more than twenty-five per one thousand.”
I motioned to Alex and we exited the office. On the way back to the
hotel I started working the phone. The Hungarians could fill roughly half
the order, but the ammunition wouldn’t be available for at least several
months; the Ukrainians claimed they could handle the whole order, but they
wanted a $1 million deposit, with no guarantee, other than a “trust me,”
which loosely translates to “fuck you” in Ukrainian. It just didn’t have that
FDIC-insured feel to it. I called the U.S. Embassy and asked to meet with
someone regarding an issue of national interest.
THE FOLLOWING MORNING - May 24th of 2007 - Alex and I met
with the embassy’s Commercial Officer Victor Myev, an attaché, Robert
Newsome, and an attractive assistant. I bought them several rounds of dirty
martinis and cosmopolitans at the hotel bar and poured out my dilemma:
“It’s a shake down, and the money’s being kicked up straight to the Prime
Minister.”
“Well,” said Newsome, swirling the ice around in his glass of gin, “it’s
Albania, Mister Diveroli... What does the DOD [Department of Defense]
want with all that Chinese ammo anyway? It’s forty-years-old; there’s got to
be other sources.”
“Not in the quantities and time frame they need it in.”
Newsome grunted his understanding, and Myev said, “I don’t want to
be rude, Mister Diveroli, but we really can’t get involved in the internal
workings of the Albanian government, especially when it relates to a
commercial contract - which is technically what you have.” Which was
bullshit: The U.S. did it all the time. I’m not an expert in geopolitics, but
any semi-intelligent person knows that the U.S. influences and manipulates
the laws and decisions of so-called “sovereign” nations all the time,
especially in politically unstable, economically depressed shitholes like
Albania.
I looked him in the face and said, “This is a crucial operation to the
war on terror - and you can’t make a couple of calls?”
Myev leaned back into his chair and glanced at Newsome. No one
spoke for several seconds, and then Myev said, “I’ll look into it... Give me a
call in a couple of days if there’s no movement on your end.”
“Gentlemen,” I smiled, “that’s all I’m asking for.”
WHEN NEWSOME GOT BACK TO THE EMBASSY, he shot off an
email to the State Department:
FYI: We have a Florida company here called AEY, that has a DOD
contract to provide Soviet & Chinese arms to the Afghan government...
They are having problems (“informality” issues) with MEIKO, the MOD
arms contracting company. AEY wants to buy arms & munitions from
MEIKO and ship to Afghanistan. They have been unable to come to terms
with MEIKO to date.
He then wrote the embassy wasn’t planning to intervene:
We’re bringing this to your attention as AEY, has legitimate DOD
contract to provide arms to the Afghan government and the implication this
might have for Coalition efforts in Afghanistan.
Please respond on the classified side as you deem appropriate.
 NOW I DON’T KNOW WHAT THEIR “CLASSIFIED” response
was, but several hours after that email, Heinrich called and said, “Okay
Efraim, I don’t know what you did, but Pinari will do twenty-seven per one
thousand... but he wants the repackaging contract as well, okay?” I didn’t
have a problem with that, although I knew Trebicka would.
THE COUNTRY WAS SO DYSFUNCTIONAL. The following day,
Pinari’s driver drove Alex and me to the Albanian National Armory,
roughly 100 Kilometers outside Tirana. I wanted to see my product, exactly
how it was packaged and being stored. I needed to be sure they had the
current products in the required quantities, etc. etc.
The installation was located inside a mountain. The entrance consisted
of a large concrete tunnel, just behind a guard shack and a chain-link fence
topped off with barbed wire. It was completely unprotected: The front gates
were wide open and the security shed was unmanned.
Our driver stomped around for nearly five minutes calling for the
soldiers tasked with protecting a significant portion of the Albanian national
arsenal. He eventually stumbled across the two of them sleeping in the
nearby woods; their AK-47 assault rifles were unloaded, their shirts
unbuttoned and the door to one the country’s main weapons and munitions
depots, wide open.
THE ARMORY WAS A MASSIVE Home Depot-sized warehouse cut
into the mountain. There were thousands of weapons and munitions crates
stacked randomly from the floor to the ceiling; some of it predated World
War II. It was like all of Europe had dumped their excess shit in that
Albanian bear cave. But the AK rounds, like most of the Soviet-type
munitions and ordinance in there that were designed for long-term storage,
were in perfect condition. They were, however, packed in heavy wooden
crates and steel spam cans.
“Shit,” I said, inspecting several pallets of ammunition. “Alex, you’re
gonna have to have Pinari’s guys break all this down, get rid of any excess
weight. Also make sure the cardboard boxes they’re using are durable
enough for transport.”
“What about the Chinese script?” Everything was stamped with
Chinese markings - even the rounds indicated they were of Chinese origin.
Practically all shell casings are stamped at the head with the manufacturer’s
initials and the year; the Chinese 7.62 mm rounds were no exception.
 “I’m not worried about it.” AEY, Inc. had delivered Chinese
ammunitions before, and besides, it was all pre-embargo, as there was no
doubt it had been in Albania long before 1989. “Get rid of any loose papers
with the writing on it.” I only wanted to avoid any unwanted and
unnecessary suspicion the Chinese script might raise - it was a split second
decision I’ll forever regret making.
WHEN TREBICKA was told he had lost the repackaging contract, he
was understandably upset. AEY, Inc. paid him for the work he had done -
and then some. But he wasn’t satisfied, and on June 11th of 2007, Trebicka
called me and secretly recorded the conversation. He made threats to call
the CIA with what he knew: “I think what you’re doing is illegal...” said
Trebicka. “If the Albanians [Pinari] want to work with me, I will not open
my mouth...”
I didn’t know what Trebicka wanted from me. “Why don’t you call
Pinari? Kiss him. Send one of your girls to fuck him. Let’s get him happy,”
I said. “Maybe we can play on his fears. Or give him a little money;
something in his pocket... he’s not going to get much - twenty thousand
from you.” At this point I just wanted Trebicka to go away. Pinari already
had a crew of guys repackaging the ammunition and Trebicka was pissed
because while he was jockeying for a cut of the ammunition deal, he had
managed to cut himself out completely - muscled out of the deal by the
Albanian government and its criminal cohorts.
“There’s nothing I can do,” I said, “There are too many thugs... It goes
up to the Prime Minister and his son. This mafia is too strong for me. I can’t
fight this mafia. It got too big. The animals just got out of control...”
Trebicka was furious, but there was nothing he could do. His threats
got him nowhere, and in Albania it was a dangerous game to play.
WHAT I DIDN’T KNOW AT THE TIME was that Trebicka had
contacted Eric Schmidt and CJ Chivers of the New York Times. Trebicka
told the reporters he had a story involving corrupt Albanian politicians and
a very young American arms dealer. “He’s buying up surplus ammunition
for the Afghanistan National Army and Police.” I doubt his motives were
altruistic - I think he was trying to sell the story and it got out of control.
PINARI HAD CLOSE TO 50 LABORERS from Tirana repackaging
the ammunition inside a hanger at the Rinas Airport over the course of two
days. The process was simple, but labor-intensive. The wooden crates had
to be pried apart and the metal hermetically sealed cans had to be opened
using can-openers. The bundles of 7.62 rounds - wrapped in the paper
printed with Chinese script - then had to be removed and re-deposited into
thick cardboard boxes. Those boxes had to be labeled, sealed up with
packing tape, wrapped in industrial cellophane and strapped to pallets with
metal bands.
As quickly as Pinari’s laborers were working, none of the Chinese
ammunition would be ready to be shipped for weeks.
BEFORE LEAVING ALBANIA, Alex and I went to the airport to
watch one of AEY, Inc.’s shipments of Albanian-manufactured ammunition
- roughly 3 million rounds, 47,400 kilograms (48 tons) of freight - be
loaded into the back of an enormous light-grey Ilyushin 76 aircraft known
as IL-76.
Every ton of cargo cost AEY, Inc. roughly $2,700 to transport, which
meant the more cargo per shipment, the less it cost AEY, Inc. So whenever
possible, I liked to go an extra ton or two over the carriers’ self-imposed
limit. More cargo meant the IL-76 burned more fuel and ultimately cost the
carrier more, in a flat-fee charter arrangement.
I climbed into the Ilyushin’s belly in search of the Load Master. It
takes a five-man crew to keep one of those 40-year-old Soviet-built
monsters airborne: a pilot to fly it, a co-pilot to navigate it, two engineers to
hold it together - midair - and a load master to equally distribute the
freight’s weight and secure the cargo - that was the guy I wanted to talk to.
The interior was dark and grey, with steel ribbing and rivets that made
up the skeletal structure of the IL-76. There were bundles of wires and
conduit running along the interior body. No windows or seats, just a huge
open gulf of cargo space. I found the co-pilot and an engineer passed out in
the second story crew bunks - they reeked of alcohol. I came across the
Load Master filling out paperwork in the rear cargo bay. “We’re ready to
start loading, but...” I said and leaned into the Russian, “I’d like to go fifty
tons, if we - ”
“No, no... Forty-eight is maximum load capacity,” slurred the load
master, “sorry.”
I pulled a wad of crisp bills out of my pocket, “I’m sure we can work
something out,” I said, as I peeled off 300 Euro. “It’s only a few tons.”
I pushed the bills into the Russian’s greasy hand, he ran his fingers
through his oily hair and I noticed there was dirt underneath his fingernails.
“Hum...” he grunted, “make it five hundred... and I’ll go fifty-one tons.”
 I pulled two more notes out and handed them to him. I looked at Alex
and said, “You need to be doing this every flight... got it?”
He grinned, “Got it.”
Ten minutes later Alex and I watched several forklifts move 31 pallets
- 51 tons of ammunition - into the back of the cargo hold of the massive
Ilyushin. Just about the time the IL-76s hydraulics were raising the rear
ramp, Jenna called, hysterically crying and sobbing. My mother had called
the apartment looking for me, and Jenna had made the fatal mistake of
trying to speak with her about our relationship. “Efraim,” wept Jenna into
the phone, “she called me a whore, and... and... she said she’d never let you
marry me, and... and... our kids wouldn’t be Jewish... and... and she called
me a whore!”
“You already said that.”
“Well you need to talk to her!”
The engine of the Ilyushin roared to life, the noise and vibration
drowning out Jenna’s voice. “Baby,” I yelled, “you don’t seem to
understand the relationship between my mother and me; she doesn’t listen
to me, and I don’t listen to her - that’s the cornerstone of our relationship.”
AEY, INC. SHIPPED OVER 11 MILLION ALBANIAN-
MANUFACTURED 7.62 mm rounds from Albania to Kabul between May
23rd and June 22nd. In late June of 2007 AEY, Inc. began shipping
Chinese-manufactured ammunition.
PICTURES
Diving face first into the cake on my 2nd birthday.
Bath time with my cousins at age 3.
Some of my artwork from my early days in Hebrew school.
My 6th grade yearbook profile (They spelled my name wrong). Favorite sport: Paintball!
Age 10, before developing a taste for liquor.
Having fun at the Miami Book Fair International circa 1996.
Horseback riding at age 12 in Davie, FL.
Holding a PKM machine gun while attending the Eurosatory International Defense Exhibition in
Paris, France in 2006. One of the many I delivered to Irag under my contracts with the U.S. Army.
In Bulgaria in 2007 with a shipment of my newly-manufactured grenades bound for Afghanistan.
Viewing a 40mm grenade launcher at the Malaysian Defense Conference in 2008.
On the tarmac in Albania inspecting one of my many airfreight shipments of ammunition bound for
Afghanistan in 2007.
Test firing a Russian fully-automatic 30mm grenade launcher in Bulgaria in 2007.
 Visiting a remote ammunition bunker deep in the Albanian mountains, which is the origin of the
decades’ old Chinese ammunition which got called into question and was the subject of the New York
Times articles and the U.S. Government’s investigation. The bunker was approximately the size of
five football fields, with a maze of tunnels; and contained a vast array of military equipment, arms
and munitions dating back probably two world wars.
Me and Oliver, my ex-girlfriend’s dog.
With my uncle, Rabbi Shmuley at a family celebration.
My early days in prison at Coleman Federal Correctional Complex with my mother, sister and
brothers visiting.
Later on in prison with my sister and younger brother during visitation.
Just out of prison and back to work!
Attending a wedding on Fisher Island in Miami, FL.
Photographed while cruising on Miami Beach in 2016.
CHAPTER NINETEEN
 TASK ORDER THREE AND FOUR
“What use is an unloaded gun?” - Tony Soprano, The Sopranos (TV)

THINGS WERE REALLY HEATING UP. AEY, Inc. had planes in the
air constantly, and shipments were arriving in Kabul and Baghdad every
other day. My biggest problem was the backlog of orders. I had over a
dozen employees sourcing products 18 hours a day.
In early June, Kim Jones with Rock Island called. “We need to step up
the schedule,” she said, sounding a little frazzled. “The Army’s pushing for
more 7.62X54.”
“Kim, we’re working as fast as we can. I’ve got three birds landing
this week.” We were barely keeping up.
“The Army is pushing me.” She’d had several other contractors fall
behind and miss their deadlines, and things were really heating up in
Afghanistan.
“Listen, we’re all fishing from the same Eastern European pool of
munitions. There are going to be problems, Kim.” Multiple weapons dealers
from all over the world were bidding on the same lots of munitions, and
sometimes the same lots were being sold to multiple buyers. The cost of
aviation fuel was on the rise, and IL-76s were being shot out of the skies
over Kabul. “Take a deep breath and relax...” I was a 21-year-old kid
educating and calming an experienced 30-something career government
official. “I’ll add a third shift to accelerate our schedule, if that’ll help.”
“Thanks Efraim, that’s all I’m asking for,” she laughed, and I could tell
she was cracking under the pressure.
“Kim... I’m on it.” I immediately hired an additional crew of crackpots
and created a third shift - working around the clock, 24/7.
ON JUNE 21ST OF 2007, I received Task Order Three: nearly 70
million 7.62 mm rounds, 70,000 OG-7V antipersonnel grenades, and
37,500 GP30 HE grenades.
 It was a decent-size order - over $14 million - and I was excited about
it. We were almost finished with Task Order One and halfway through Task
Order Two. Everything was running fairly smoothly, and everyone was
pulling their weight except Packouz; he was trying to balance his massage
therapy “career” with international arms sales. This is a guy who used to
secretly videotape himself having sex with his clients, which mostly
consisted of lonely aging trophy wives.
I once called him up, asking “Packouz, where the hell are you? Rock
Island is screaming about the 7.62 x 54 mm shipment from Task Order
One.”
“Dude,” responded Packouz, “I’ve got my cell and laptop, but I’m in
Key West doing massages for some rich gay guys,” he laughed. “They
drove me down here in their Rolls Royce Phantom, I’m gonna be here all
weekend. They’re paying me three hundred bucks a day - cash, I need the
money.”
“Should I tell Kim Jones that?” I snapped. “Sorry Kim, the
Afghanistan National Army won’t be getting their ammo because Packouz
is rubbing down a bunch of fags in the Keys... is that what I should tell
her?”
The situation reached critical mass in June of 2007. It was late, most of
the employees had gone for the day, and the third shift hadn’t arrived yet.
The office was filled with empty chairs and ringing phones. I asked
Packouz to step into my office. “Everyone’s working day and night here,” I
said, motioning to the outer office. “If you don’t step up you’re gonna get
left behind.”
“What’s that supposed to mean?” snapped Packouz. We were standing
in the middle of my office - it was dusk and employees were starting to
arrive.
I was living and breathing this contract every moment of my waking
life - not to mention the dreams and nightmares I was having because of it.
“I’ve literally got my life savings in this, and every time I turn around
you’re off greasing someone up and rubbing ‘em down, working out or
smoking a bowl. I’m not saying I’m gonna leave you empty-handed if you
don’t start pulling your weight, but I am going to leave you behind.”
Packouz stepped forward, stopping inches from my face, and growled,
“You’re gonna pay me what you owe me motherfucker!” Packouz had only
closed one deal since starting with AEY, Inc., making roughly $7,000. His
agreement with me was that he would get a very small percentage of the net
profit margin of the totality of the contract. He could get partial draws with
the completion of each Task Order, but AEY, Inc. hadn’t completed even
one Task Order yet. Not one. I didn’t owe him anything.
We stood staring at one another. Packouz was glaring at me, trying to
look intimidating. “Come on man,” I said. “You know that’s not going to
work on me.”
Packouz turned around and stomped out of the office mumbling,
“You’re going to pay me,” as he barged out the door.
WITHIN A FEW DAYS of that argument - maybe a week - Packouz
showed up at my apartment and told Jenna he needed to grab some
important paperwork for the Afghan contract. Jenna later told me he spent
about an hour rummaging through my home office, looking at documents,
and at one point he may have logged onto my computer. Jenna couldn’t be
sure, but she didn’t think he took anything. Now I’m not sure what Packouz
was looking for, but he was way out of line and I just couldn’t trust him
anymore.
ON JULY 19TH OF 2007, I asked him to meet me at the office. It was a
tense meeting, Packouz knew it was coming - we both did. “It’s just not
going to work,” I said from behind my desk. “You’re not coming in, you’re
not completing the line items, and the truth is - I just don’t trust you
anymore.”
“Well I’m not leaving with nothing,” he barked at me.
“I’m not asking you to... We’ll have to come to some type of
agreement. I mean you - ”
“I want a million dollars,” he interrupted. Apparently Packouz had put
some thought in to it. “I’m not taking anything less.”
I was stunned. “You’re... you’re joking, right?” I chuckled. “I know
you’re…”
“I’m not fucking around, that’s what I deserve.”
“You’ve been working five or ten hours a week between massages, for
less than six months... and you haven’t even completed one Task Order.
That hardly justifies a million dollars.” We argued about the figure for a few
minutes, but Packouz wouldn’t budge. I told him “It isn’t gonna happen.”
He stood up yelled a little bit, told me to, “Fuck off!” or something,
and stomped out of my office.
 THE PROBLEM WITH PACKOUZ WAS THIS: If you asked him
what he was doing at any given time, he would tell you, “I’m trying to
make some money.” If you asked me the same question, I’d tell you, “I’m
part of a team building a billion-dollar business...” He just couldn’t see that,
and that’s why he failed so miserably as a businessman.
Over the next few weeks, Packouz started texting Doudnick with
messages for me: ‘Tell Efraim I want one million dollars!!!’ and ‘Tell
Efraim if he doesn’t pay I’m calling the IRS’. Shit like that. He was acting
like a child, wouldn’t even take my calls.
IT WASN’T LONG AFTER I LET HIM GO that I got a letter from an
attorney with Greenberg Traurig, a huge multi-international law firm,
representing Packouz. Richard N. Bernstein wanted to set up a mediation
regarding Packouz’s commissions. I told him, “I have no problem with
that.”
Our first meeting went as expected. My civil attorney, Carlos Dezayas,
and I met Packouz and his attorney at the offices of Greenberg Traurig in
downtown Miami. It was a typical upscale law firm conference room -
mahogany furniture and a gorgeous view of the Miami skyline. At the time,
I couldn’t figure out how Packouz could afford these guys, but I later found
out one of the partners was a friend of his father, and was probably working
on contingency.
The meeting started off badly and only got worse; Packouz wanted
$800,000. “You were a part-time employee,” I said, “who only closed one
very small deal - with my help - and dropped the ball on a dozen others.”
“Fuck you dude!” snapped Packouz. That was pretty much his
response to most of what I had to say.
Eventually - out of frustration - the attorneys called it a day. Packouz
said, “I’ll see you in court,” as Carlos and I exited the conference room. I’m
assuming he heard it in a Law & Order episode.
The following meeting I brought a cashier’s check for $275,000. I just
wanted to be finished with him.
As both of our parties walked into the conference room Packouz
stopped me and said softly, “I’m telling you, if you try and screw me dude,
I’m gonna call the IRS... We both know your books aren’t right.”
“You’re basing this on what?” His vast experience rubbing down old
ladies and queers. “You’re a CPA now?
 We all sat at the conference table and I slapped the cashier’s check
down. It was the most money Packouz had ever seen in his life. He hadn’t
earned it, but I wanted to get rid of him. Every minute I spent in mediation I
was losing money - not working.
“It’s not enough,” he snapped. Packouz motioned to his attorney, “I
gotta pay my lawyer and... I worked hard on that bid.”
“Packouz, we sat around my apartment for a couple weeks getting
stoned and making calls.” He had less than 60 hours invested in the
Afghanistan bid, and he had only put in a couple months - on and off - since
the award, not to mention it was still yet to be determined that the
Afghanistan contract would eventually be profitable. “As far as your legal
bills are concerned, the only reason we were working together was because
I thought we were friends. But you’re the one that got a lawyer, so you’re
the one who’s gotta pay for him. Not me.”
The attorneys discussed coming up with a “happy medium,” but
Packouz wouldn’t budge. He now wanted $350,000. After an hour of
arguing I took my $275,000 cashier’s check and left.
ROUGHLY A WEEK LATER, my attorney called me and said,
“Packouz’s attorney says they’ll take three hundred thousand.”
“I’ll think about it,” I said. I planned on paying him, but I wanted
Packouz to sweat a couple more days.
ON AUGUST 6TH OF 2007 TASK ORDER FOUR ARRIVED and it
was huge: over 121.5 million 7.62 mm rounds, 4,000,000 12.7 mm rounds,
2 million 30 mm high explosive rounds, nearly 700,000 of OG-7V
antipersonnel grenades, 30,000 S-5 rockets and 10,000 S-8 rockets, 135,000
82 mm mortars, 10,700 120 mm mortars, 8,000 122 mm Howitzer shells,
and 7,500 125 mm HE tank rounds (for the T-72 battle tanks). Over $69.3
million dollars of munitions.
We had just finished Task Order One and were a couple months away
from completing Task Order Two, and we had barely started on Task Order
Three. When I opened the email and saw the quantities I remember
thinking, holy shit. It was the first time I legitimately questioned our ability
to handle the volume. It was overwhelming.
I had a pretty good idea of where I could obtain most of the munitions,
except for one particular item. I called Heinrich and said, “Rockets... I need
thirty thousand S-5’s and ten thousand S-8s.” There was a long silence and I
interjected, “I could probably just call Arcus...”
 “No,” snapped Heinrich.” I have a contact in Hungary, Choopryna,
who knows a Colonel in the Hungarian Military, and they must liquidate
almost everything as a requirement towards NATO membership.”
Hungary’s only got about 80,000 people serving in their army and air force
- the country is landlocked so there’s no need for a navy.
IN 1990, HUNGARY BECAME A MULTIPARTY DEMOCRACY
and quickly voted out the Communist Party. It was one of the smoother
Eastern European democratic transitions; hundreds of protestors didn’t have
to be shot, and no commies died. So that was nice.
I landed at Budapest International Airport. I was only in the country
for a couple of days, but I can say that Budapest is one of the most beautiful
cities in Central Europe; it’s got cobblestone streets, and the minarets and
spires of historic churches rise above the city. Newly constructed modern
buildings, parks, and museums - it was a real shock in comparison to the
rest of the ex-Communist cities I’d seen.
Through one of Heinrich’s minions, Bogdan Choopryna, I met with a
high-ranking Colonel of the Hungarian Military - medals on his uniform
and everything - at a base near Budapest. The Colonel was a bloated
middle-aged man with thick grey hair and pale chalky skin, but amazingly
friendly.
The base was an arms bazaar. They had sleek black MiG-21s lined up
on the asphalt, tens of thousands of land mines and mortar shells rusting in
the snow, and huge aluminum warehouses filled with AT5 anti-tank guided
missiles.
After the issue I’d had with Heinrich and the Albanian price
discrepancy, along with the Chinese ammunition, I made it a point to
personally negotiate and inspect all AEY, Inc.’s major acquisitions. It was
lightly snowing and freezing cold when we got to the base; soldiers were
walking around with rumpled uniforms, their sleeves were rolled up,
sporting tattoos and earrings. It wasn’t a U.S. Military base. There were no
salutes or any sign of rank and discipline whatsoever.
When the Colonel showed us into the first warehouse, I thought my
heart was going to stop - it was packed with enough munitions to complete
multiple line items on Task Order Three: light green and grey cylindrical
rockets and mortars stacked neatly on pallet after pallet - all Soviet made.
IN THE COLONEL’S OFFICE, this cruddy nicotine-colored concrete
box with chairs and a desk, I handed him my wish list. As he read through
the items the Colonel mumbled in Hungarian, “Igen [yes], igen... we can do
that.” S-5 and S-8 rockets, 82 and 120 mm mortars, and 122 mm Howitzer
shells. He looked at me and said, “Hungary wants to work with the
American allies... help United States defeat terrorism.” The Colonel was
doing his best to come off like a United States’ patriot.
“But at what price?”
“These are excellent munitions, good condition, almost new.” That
was a stretch, but I let it go. “Eight million dollars... yes?”
“No, no,” I chuckled, while shaking my head as if scolding a child.
“I’ve gotta pay for shipping, fuel, and handling; that’s millions, Colonel,
millions... I’ll go four million U.S. for everything.”
We haggled for a couple minutes, and at one point I told the Colonel,
“Don’t worry about the rockets, I can get them from the Albanians.” Which
wasn’t true, but when I said it the order shrank and his pudgy face slumped.
He was an ex-Communist career military officer, not a seasoned capitalist
international arms dealer - he didn’t have a chance. A few minutes later I
said, “At these prices Colonel... I might have to pass on the mortars too.”
More than half the order had just been taken off the plate and I could see the
desperation in his eyes.
“Mister Diveroli,” he barked, throwing his hands up in the air, as if he
were finished discussing the matter, “five million and three hundred
thousand, for everything.”
“Colonel, for God’s sake, you want the Afghan Security Forces
throwing rocks at the terrorists? I thought you were a supporter of the cause,
not a war profiteer.” I told him I wasn’t authorized to go that high, and I
excused myself. I walked outside and called Jenna back in Miami. I walked
around like I was on an important call for about ten minutes while the
Colonel watched from inside his office. When I came back in I said, “Five
millions the highest they’ll go.”
I’m still not sure who he thought I was talking to, but he caved and
AEY, Inc. purchased everything on my list for $5 million. We paid roughly
$3 million for shipping and handling, billed the Department of Defense
nearly $10 million, and made around $2 million. God, I love this business!
ON MY WAY BACK FROM HUNGARY, I was stopped at JFK, U.S.
Customs - again. While a border patrol agent watched me and four custom’s
officials rummaging through my carry-on bag, and another photographing
its contents, I called Ronald, AEY, Inc.’s operations manager. “Ronald,
listen, I came across a warehouse full of AK-47 assault rifles in Hungary. I
can pick ‘em up for fifty dollars per weapon;” and just to screw with the
border patrol agent, I said, “I’m thinking we buy five thousand, ship ‘em
here to New York and sell ‘em off to the Gambino crime family, maybe the
Crips and Bloods too... five hundred a piece, what’d you think?” The border
patrol agent squinted his eyes and tightened his lips together; several
customs officials stopped what they were doing, turned and stared at the
young arms dealer in horror.
“Aw...” stammered Ronald from Miami, “boss, I’m not sure...”
“You’re right,” I interrupted. “What about the North Koreans or the
Cubans, they’re always looking for Kalashnikovs.”
“Um... I don’t think we can...”
“Okay, bad idea, try calling the Iranian Ministry of Defense, in Tehran;
see if they’re interested. “I snapped off my cell and glanced at the room full
of stunned customs officials and feigned shock, “What?”
NOT LONG AFTER I GOT BACK FROM HUNGARY I was
shopping at the GAP in the mall, buying socks and T-shirts, talking on my
cell phone and not paying attention to much of anything. My call ended and
I slid my items onto the counter; didn’t even notice the petite blond behind
the cash register until she said, “Efraim?”
I looked up and saw... my ex-girlfriend - Rachel - wearing a pink GAP
shirt and a nametag that read something like, ‘Associate Sales Person.’ She
was holding a scanner and looked absolutely mortified to see me.
I was momentarily stunned - we both were. She looked like hell, like
she had been working 12 hours straight - thin and frizzy haired, and
drenched in humiliation and shame. In contrast, I looked like I had just
stepped out of a GQ magazine. Life just doesn’t get any better than this.
Rachel gave me the once over, from my Prada dress shirt to my casual
Gucci dress shoes; glanced at my Rolex and sighed, “How’re you doing?”
“I’m running low on socks and T-shirts.” But she didn’t move, didn’t
ring up my stuff, didn’t even blink, and just stared at me.
“You look good,” said Rachel, embarrassed - this was the girl that
constantly ridiculed me about my shitty wardrobe - then she glanced at my
Rolex again and scoffed, “I can’t believe this is happening.”
I instinctively smiled. The last time I saw her she was screaming
insults at me, while her mother called the police. “Yeah,” I chuckled, “it’s
happening.”
 Rachel shook her head and rang up my items, while shoving them in a
bag she took a shot at me, “How’re you doing with the drugs?”
“I’ve got plenty, but thanks for offering.”
“No,” she yelped, “I wasn’t... God, Efraim, you’re never going to
change are you?”
“Is there a reason to?” I asked, slipping her my Platinum Amex card.
“You don’t fix what’s not broken.”
She rang up my items, seemed to struggle with something for a second
and handed me my GAP bag. “So,” she grinned, gave me a flirtatious hair
flip and asked, “You still have my number?”
“I do,” I chuckled and turned to leave, “but don’t wait by the phone,
darlin’.” I stepped out of the store and lit up a Parliament. It was one of
those life-affirming moments that proves the existence of karma - and
maybe even God.
I CAN’T BE SURE, BUT SOMETIME IN MID 2007, I was getting
stoned with my cousin Joe in his condo at the Mirador on 12th Street and
Bay Road in South Beach, and he introduced me to his neighbors, Dejan
Djuric, a 27-year-old six foot Serb from Bosnia and his buddy Dusan
Dancula, a Serb from Serbia. I liked them both immediately.
Dejan was a good-looking guy - he had made it to the states after
meeting a 40-something-year-old American cruise director, convincing her
they were “madly in love” and should get married. Once in Miami - and
after receiving his Green Card - he suddenly lost interest in his overweight
middle-aged wife and divorced her. “I still have fiancé in Serbia,” he said,
over a bowl of some primo weed. “My father is doing time in a Bosnian
prison.”
In 1991-1999, following the collapse of communism, units of the
Yugoslav army and Serbian paramilitary forces engaged in a campaign of
“ethnic cleansing” aimed at driving non-Serbs out of northern Croatia, parts
of northeastern Bosnia, and the province of Kosovo, establishing an
independent “ethnically pure” Serb republic. The campaign consisted of
large-scale mass executions (mostly of men and boys), forced marches,
torture, starvation, and systematic rape - organized and directed by Serbian
president Slobodan Milosevic. This was not a nice guy.
Dejan’s father was a member of one of Milosevic’s “death squads.” In
April of 2001, he, along with ex-president Milosevic and dozens of other
military officers and presidential cabinet members, were arrested and tried
for genocide, crimes against humanity, and war crimes. Dejan’s father
received a ten-year sentence. “He gets out in a few years,” said Dejan,
nonchalantly. As if everyone’s father committed a little genocide.
Dejan was working at a moving company for minimum wage, and he
hated it. I needed someone in Montenegro to oversee the packaging of the
mortars and rockets Heinrich had sold AEY, Inc. through Yugomont, to
make sure the products were properly strapped to the pallets, shrink-
wrapped, and labeled correctly. “You are a mover...” I said. “You’d have to
help collect some documents and - ”
“I’ll do it,” he interrupted.
“It’s not far from Serbia, so you could see your fiancé and - ”
“I’ll do it.”
“I’ll pay you... seven hundred a week,” I shrugged, “plus expenses?”
Which was a fortune in a country where the average family income is $500
a month.
“I’ll do it.”
“So...” I laughed, “Will you do it?”
“I’ll do it.”
Dejan was a rough guy, the Serbian equivalent of a mixed martial arts
fighter - a tank with tattoos. The three of us used to go out to club Tantra in
South Beach for Balkan night. Previously unbeknownst to me, there is a
large Central and Eastern European community in the Miami Beach area.
We would dance and drink.
Dusan and I were close, but Dejan and I were tight - we hung out all
the time. Dejan and I would be at a club or a bar; I’d get drunk and coked
up, make the mistake of dancing with some guy’s girlfriend or spilling my
drink on someone, maybe shoot my mouth off. Before I knew it, there
would be two or three drunken frat boys or Latin tough guys ready to bash
my face in - it happened on more than one occasion. Several guys with
clenched fists would head toward me ready to pounce, and Dejan would
step in front of me. “No!” he would growl in his thick Slavic accent. “You
go through me first.”
Dejan was no joke, I’ve seen him face off with four guys in a bar, and
they backed down - that’s how tough looking this Serb was. All tatted up,
angry looking, red faced, and solid as a brick. He saved my ass more than
once.
 Dejan and Dusan were both great guys. Unfortunately, within a few
months Dejan was in Montenegro overseeing the packaging. I flew him
back to Miami every few weeks just to hang out; he was that cool of a guy.
Then Dusan - the Serb from Serbia - passed the expiration date on his visa
and within a few months of Dejan leaving for Montenegro, Dusan returned
to Serbia. We kept in touch. I used to send Dusan $300 a week to help
source weapons and munitions for various contracts, but he hardly ever
came up with anything - not that it mattered; I liked the guy.
CHAPTER TWENTY
 SHYSTERS AND SHAMUSES
“Well, everyone’s your brother ‘til the rent comes due.” - Vincent, Ronin (Movie)

BLANE’S FALSE COMPLAINT that AEY, Inc. was buying Chinese

AK-47 assault rifles finally yielded a search warrant. There wasn’t a shred
of evidence that AEY, Inc. or I had imported or exported, bought or sold
one Kalashnikov rifle from China, but somehow the U.S. Attorney and the
DCIS and ICE agents convinced a Federal Judge to sign off on it.
ON AUGUST 23RD OF 2007, I was standing on the 28th floor balcony
of my South Beach suite, staring out through bloodshot eyes at the clear
blue waters of the Atlantic. Jenna was lying in bed, just inside the sliding
glass doors, her bare breasts slightly exposed underneath the silk sheets. We
had been out all night doing coke and partying at club Mansion in South
Beach.
I slipped a Parliament between my lips, lit up and inhaled.
When my receptionst called me and told me there were cops in the
office, I said, “So tell them to leave.”
“I can’t... they say they’ve got a warrant for... pretty much everything.”
“Search warrant?”
“What do you want me to,” she hissed.
I crushed out my cigarette, poured myself a screwdriver, and sighed,
“Put ‘em on the phone.”
Agent Mentavlos came on the line. “We’re not leaving, Mister
Diveroli,”he snapped. “You’re gonna need to come down here.”
ON MY WAY TO AEY, INC.’S OFFICE I called Lydecker, Lee,
Behar & Dezayas - the only law firm I had any kind of relationship with at
the time, with the exception of the hack attorney I had hired for my minor
brush with the law, and I didn’t think he would know what to do - until that
moment I had avoided attorneys as I naively believed I was capable of
identifying and understanding the plethora of laws and regulations that were
applicable to my business, for fear of being ripped off by them. I spoke with
John Priovolos; he told me he would meet me at the office, saying, “Don’t
talk to anyone.”
At AEY, Inc.’s office I was shown the search warrant by Agent
Mentavlos. It read:
All items evidencing violations of AECA (22 U.S.C. subsection
2778(c)); the EAA (50 U.S.C. subsection 2410(b)); false statement (18
U.S.C. subsection 1001; false claims with regard to contracts (18 U.S.C.
subsection 287); and the use of electronic telecommunications instruments
to forward these alleged false statements and false claims, ultimately
resulting in the receipt of payment from the DOD (18 U.S.C. subsection
1343)...
The warrant allowed them legal access to, and seizure of, virtually
every paper and electronic document on the premises. “Any and all United
States Government contracts or subcontracts... All documents and any
written records... The following categories of computer equipment...
software... passwords and data security devices... electronic records...
electronic storage devices... Any records or documents pertaining to
accounts held by Internet Service Providers or Internet use.”
After Priovolos showed up, I asked the Agent, “What’s this about?” I
hadn’t made any false statements or claims with regard to my DOD
(Department of Defense) contracts, which was what the warrant seemed to
be focusing on.
“We’re investigating you for not acquiring the licenses to import and
export weapons and munitions.” Mentavlos smirked, “You forget you
needed those?”
“I don’t,” I told him. Under the International Traffic in Arms
Registration (ITAR), businesses and individuals must acquire licenses per
individual arms transaction, but as a government contractor and or
subcontractor, AEY, Inc. was exempt from the broker licensing registration
in ITAR, so long as the U.S. Government was the purchasing party or the
end user. “What else you got?”
“Well...” he stammered, “what about the AK-47s from China.” Here
was Blane’s bullshit allegation in action. I looked into Agent Mentavlos’
eyes and I saw nothing but contempt for me, and the truth is - at the time - I
felt bad for him. He was a career military officer, a DCIS investigator eking
out a living chasing false leads about a 21-year-old making millions off a
government that paid him a pittance. I was young, arrogant, and rolling in
dough. I didn’t blame him for hating me. I do however blame him for
pushing to create a case against me that didn’t exist.
“Agent Mentavlos,” I said, “you’re working off bad information. I’ve
never bought any…”
“Okay, don’t answer that,” interrupted Priovolos. He looked at the
agent and said, “He’s done talking.”
They grabbed all the loose documents and used a flash drive to copy
all the computers’ hard drives, which took all day. I was convinced we
hadn’t done anything listed on the search warrant, certainly not
intentionally, as seemed to be required by the statute, which stated,
“Knowingly and willingly violated.” The only thing I was remotely
concerned about was the Chinese ammunition, and it didn’t even seem to be
on the DCIS’s or ICE’s radar... so we went back to work.
AT THE END OF THE DAY I went home and told Jenna about the
search warrant. She hugged me and said, “You haven’t done anything
wrong. It’s a mistake. Nothing’s going to happen.” I wanted to believe that,
but I could tell she was worried.
I IMAGINE OVER THE NEXT SEVERAL DAYS Assistant U.S.
Attorneys Eloise D. Fernandez and James Koukios, and DCIS Agent
Mentavlos and ICE Agent Oscar Garcia, looked into my dispute of their
allegations against AEY, Inc. and me. I’m sure they were scouring over the
ITAR exemptions for government contractors and subcontractors and
scrutinizing our purchases and shipping documents - it must have been
obvious we hadn’t bought any AK-47s from the Chinese. They had to be
disappointed, and they should have dropped the investigation, but they
didn’t.
CHAPTER TWENTY-ONE
 EMPTY
“I love treason, but I hate a traitor.” - Julius Caesar

I STARTED INTERVIEWING LAWYERS, and I ended up meeting

with Hy Shapiro, a supposed veteran and well-respected federal criminal
defense attorney, to discuss the situation. But even after sitting in his office
surrounded by law books and conservative oak furniture, I still wasn’t
convinced the government had a legitimate case against me. Plus, he
wanted a $100,000 retainer, and he asked for it with a straight face. The
second time I asked to speak with Shapiro he said, “You wanna talk to me
again? You take me to lunch, and we’ll talk.”
WE MET AT A FANCY RESTAURANT IN DOWNTOWN MIAMI.
Shapiro wanted the case, but he wanted a large retainer for something I
didn’t even think was going to happen. I didn’t want to pay that much for a
bullshit case. Shapiro ordered around $200 worth of food and wine - on my
tab. “I’m just saying this might blow over. I haven’t done anything wrong.”
“Efraim,” said Shapiro, shoving a shrimp in his mouth, “it’s not going
to blow over, the United States government is investigating you for illegal
arms trafficking... Even if it’s not true, they’re going to find something.
Everyone’s a walking indictment, and that’s twice as true for someone in
your line of work. Then, considering your age and the press coverage it
would generate, forget about it... they’ll find something. They could indict a
ham sandwich if they wanted to.”
“I disagree. I haven’t done anything, and at the end of the day, they
need something real to stick... don’t they?”
“Look,” said the attorney, “I called the U.S. Attorney’s Office and
spoke with one of the Assistant U.S. Attorneys, Eloise D. Fernandez,
assigned to your case. We know each other. Eloise said nothing’s going to
happen for the next ninety days at least. You need to retain me, so we can
get ahead of this thing.” He stood up and told me to think it over.
 I HIRED SHAPIRO THE NEXT DAY. He seemed sharp, and I figured
because he knew the prosecutor, he might be able to make the whole thing
go away, and he was probably just waiting to get his $100,000 before he
gave me the good news. Hell, I was even willing to pay a civil fine or
something to keep the government happy and off my ass.
Once I had wired him the money, I told Shapiro the only thing I was
worried about was the Chinese ammunition. He did some research and the
following day he told me, “Based on what you told me, I’m not even sure
you violated the DFAR’s prohibition in your contract, let alone committed a
crime. I don’t see that it’s illegal... A violation of your contract maybe, but
that’s not criminal. It should be civil.”
So I kept shipping the ammunition. At a subsequent meeting Shapiro
said, “You can’t give this David Packouz character the money, it’ll look like
hush money.” The truth is I wanted to pay him to get rid of the headache
associated with a lawsuit. But I couldn’t now that Shapiro specifically
advised against it. He said it could be considered, “witness tampering,” or
“obstruction of justice.” So Packouz wasn’t getting shit. “Also,” said
Shapiro with a sigh, wiping the sweat off his forehead, “I think you should
stop shipping it [the Chinese ammo].”
“Why?” I asked. “You said it wasn’t illegal... is it?”
“No, not that I can see, but... it’s causing DCIS, ICE, and the U.S.
Attorney’s Office to focus an investigation on you, and...” he stammered
out of frustration, “The government doesn’t like to lose.”
I couldn’t just stop shipping or the Army could - and by all accounts
would - terminate the contract and sue AEY, Inc. for nonperformance. “I
can’t. AEY has to complete the Task Orders.”
SOMEONE IN AEY, INC.’S OFFICE, one of Packouz’s buddies - a
mole as far as I was concerned - told him about the search warrant. Packouz
immediately called Alex in Albania, saying, “They raided the office, bro.
It’s gotta be the Chinese ammo... You need to get outta there.”
Alex grabbed his laptop and took a ferry to Italy, while crossing the
Adriatic Sea he threw his laptop into the water. Apparently he was scared
shitless and didn’t know what else to do.
Within a week, Packouz contacted the U.S. Attorney’s Office and
offered his cooperation in their investigation of AEY, Inc., and me. On
August 30th of 2007, Packouz and his attorney Marc Seitles met with ICE
Agent Oscar Garcia to be interviewed. It’s my understanding that Packouz
sat down, looked at Agent Garcia, and said, “Well, I guess you guys know
about the Chinese ammunition...” They had no idea what he was talking
about, as far as the U.S. Attorney’s Office was concerned that case wasn’t
even part of their investigation.
On April 23, 2007, [Alex] Podrizki notified Diveroli and Packouz that
the 7.62X39 and the 7.62X54 ammunition had been manufactured in China
and contained Chinese markings. Podrizki, Packouz and Diveroli were
aware that China was a prohibited source of supply and there was a clause
in the Afghan contract that specifically stated Chinese manufactured
ammunition was prohibited... Diveroli made the decision that the deal
would continue and the repackaging company would remove all the Chinese
markings prior to transporting the ammunition to Afghanistan...
Up until that point, DCIS, ICE and the U.S. Attorney’s Office had no
idea about the Chinese ammunition. They asked Packouz about Milton
Blane’s false accusation, that AEY, Inc. was illegally shipping Chinese AK-
47 assault rifles and licensing violations - none of which were even
remotely true, to the point where even Packouz’s brown-nosing ass couldn’t
corroborate them.
Packouz was not aware of other weapons or munitions that were either
directly or indirectly acquired from China. Diveroli did state on at least one
occasion that he did not need an import license from the country of
Afghanistan, but did need an export license from Albania to transport the
munitions out of that country.
Packouz’s interview pointed the agents in the direction of the Chinese
ammunition. Which quickly breathed new life into what they had realized
was a dead case, even for an overzealous prosecutor.
LESS THEN TWO WEEKS AFTER PACKOUZ BLABBED about
the Chinese ammunition, Agent Mentavlos contacted Rock Island. He
arranged a teleconference between himself, Melanie Johnson, and Kim
Jones.
“We [DCIS] believe Mister Diveroli’s company is buying Chinese 7.62
mm rounds from the Albanians,” said the agent. “He’s having it repackaged
and then flown to Afghanistan.” Mentavlos then asked them to seize all
AEY, Inc.’s shipments and hold them in a secured location. “We’re going to
need it as evidence.”
“We can’t do that,” complained Kim Jones. “AEY’s our main
supplier!”
 “Look, Agent Mentavlos,” said Melanie Johnson, “without something
in writing from someone higher up the chain of command, ordering us to
suspend the shipments...” she sighed. “He’s our most important source of
supply and we need that ammo.”
Mentavlos told them he would work on obtaining the needed approval
to seize the Chinese ammunition. He then reminded both women he was
conducting an ongoing criminal investigation, saying, “Don’t discuss this
with anyone.”
NOW I CAN’T BE 100 PERCENT CERTAIN, but I’m pretty sure
Kim Jones called me immediately after that meeting. Knowing all the
MEICO ammunition was manufactured in China, she said, “Efraim, we’re
going to need you to accelerate your delivery schedule.”
“Kim, we’re…” I almost told her it wasn’t possible, but instead I said,
“I’ll make it happen.”
ABOUT THE SAME TIME KIM WAS PLEADING for more
ammunition, I found out Alex had fled Albania. The timing couldn’t have
been worse. But I didn’t panic, instead I asked a gung-ho, yet still wet-
behind-the-ears employee, David Black, to step into my office. “Listen
David,” I said, “we’ve got a position that just opened up, in theater... you
interested?”
“Absolutely,” replied David; he left for Albania on the next available
flight to pick up where Alex left off, supervising repackaging and shipping
ammunition to Kabul.
ROUGHLY SIX MONTHS EARLIER, one of my procurement guys
had located 25 million 7.62 mm rounds available for sale by a trading
company in the Czech Republic called Banzai, at $45 per 1,000, which at
the time was too expensive to justify buying. It cost $6,000 to $10,000 per
hour to keep a bird in the air; Czech Republic was roughly 3,800 miles from
Afghanistan - 1,000 miles farther than most of my other 7.62 suppliers.
That’s an additional two to three hours of flight time.
But with the way things were looking in Albania, I was going to need
another source of 7.62 mm rounds, so now the 25 million Czechoslovakian
rounds were worth looking at. In addition to that lot, Ralph Merrill had a
contact out of Ostrava who claimed to have 32 million rounds for $46 per
1,000. That amount of ammunition had the potential of completing Task
Orders Two, Three and Four.
 I jumped on a plane and flew to the medieval city of Prague, capital of
the Czech Republic. The communist collapse in Czechoslovakia was so
smooth it became known as “The Velvet Revolution.” Hundreds of
thousands of protestors gathered in the streets of Prague and the Communist
Party was ceremonially voted out of power. The Soviet Union withdrew its
troops in June of 1991, and in 1993 Czechoslovakia broke into the Czech
Republic and Slovakia. Not a drop of blood was shed.
Prague is known as the “City of a Hundred Spires” because of its many
churches; it’s cut into two sections by the Vltava River and connected by
dozens of bridges. Its narrow winding cobblestone streets were lined with
many beautiful old parks and cathedrals - a true medieval city, and I loved
it.
I met Petr Bernatik - Ralph’s contact - at my hotel. He was an
overweight Aryan in his late 50s with a handlebar mustache. He owned
Imex Group Ltd. and he wanted too much for his 7.62 mm rounds. “I can’t
make anything at forty-six per,” I told him. “You’re gonna have to come
down to forty per.” I also told him I needed to inspect the product, “Are
they near the city, you do own them right?”
“Of course,” he said, “I’m not brokering the ammunition; my company
owns it all,” said Bernatik, but he wouldn’t budge on his price. He was
pretty confident I couldn’t go anywhere else, and he was right - my options
were running low.
THE FOLLOWING DAY, I met Lucas Trachta at his generic little
manila colored office. He owned Banzai, a military supplier, and 25 million
rounds of ammunition I desperately needed. We went around and around
regarding the price, and ultimately - after showing him the amount of
Eastern European weapons and munitions I was buying - he dropped his
price to $42 per 1,000. “I’ll take the twenty-five and any additional rounds
you can find at that price.”
We were finalizing the details of the contract when Bernatik called. “If
you’re still interested in the rounds,” he said, “I’ll come down to forty-
five.”
I had just bought 25 million rounds; as a result I wasn’t nearly as
desperate as I was the day before. “You’re going to have to come down
closer to forty-two...”
“Let me call you back,” he said. Twenty seconds later Trachta’s
cellular rang, he asked me to excuse him and he stepped out of the office. It
was too much of a coincidence.
When Trachta sat back down, I said “Look, I’m gonna level with you
here... I’m trying to buy thirty-two million rounds from a guy named
Bernatik out of… “
“Ostrava,” he interrupted, finishing my sentence. “Yes, twenty-five
million of the thirty-two million rounds are what you just bought... that
leaves him with seven million.” I was hoping to get Bernatik’s 32 million
rounds and Trachta’s 25 million rounds, but it turned out Bernatik didn’t
own an additional 25 million rounds; he was trying to sell me Trachta’s
ammunition. He was brokering, and hoping to make the spread. I had
counted the same 25 million rounds twice. Shit! “Sorry, Mister Diveroli...
Bernatik owns around seven million - that is all.”
On our way to inspect the ammunitions, Trachta told me he had bought
the rounds from the Czech Ministry of Defense (MOD) several years earlier
and stored them in two warehouses. So I’m thinking they’re in two secure
storage facilities, but he drove me out to the country where the rounds were
being stored in two huge unsecured barns located on a farm. This would
never happen in the United States.
Inside the barns was an amazing cache of weapons and munitions:
over 2,000 crates filled with Czechoslovakian VZ.58 assault rifles. “I’ve got
twenty thousand of them,” said Trachta. “Fifty U.S. per weapon.” He told
me he had access to another 150,000 if I was interested. The VZ.58
resembled the Soviet AK-47, but internally the weapon was substantially
different; a short-stroke gas piston assault rifle that shared absolutely no
parts with the Kalashnikov.
“I’ll make some calls.”
The 25 million AK rounds were in the hermetically sealed spam cans
and in pristine condition. “They’re perfect,” I told Trachta while calling my
bank to wire the deposit. That’s when I noticed what appeared to be several
small armored personnel carrier type vehicles with turret style automatic
cannons mounted on them. “What’re those?”
“These, I call them beasts,” he laughed. Trachta pointed to one of the
cannons, “Dis is 30 mm fully automatic cannon... antiaircraft machinegun
monsters.”
Now, Task Order Four had two line items for two million 30 mm
rounds, and I could see several thousand spam cans of 30 mm rounds
stacked besides the beasts. “You interested in selling the rounds?”
 He shrugged, thought about it and said, “I have one million of them... I
can do six dollars U.S. per cartridge.”
I did the calculation instantaneously. I had billed the Army roughly
$30 per round; minus shipping and fuel; that was a potential profit of over
ten million dollars - my knees went weak. “Let me get the specs on them,
make some calls... I might be interested.”
When I got back to my hotel I called a weapons specialist in Kabul and
told him what I had. My contracted 30 mm round was 30x165 mm and so
was the Czechoslovakian round. It took him about 20 minutes to locate the
Czechoslovakian specs in some manual. After he reviewed the specification
he said, “Sorry they won’t work.”
Apparently the belt-fed Czechoslovakian 30 mm round’s casing varied
ever so slightly in length, making it problematic for the Soviet GSh-30
gun’s chamber and ejection mechanism. “Are you sure? I mean, have you
tried?”
“Mister Diveroli,” grumbled the Army’s specialist, “it’s simple
physics... They won’t fit.” When he told me that, I almost cried. I felt like
ten million dollars had just slipped through my fingers.
I then dialed Baghdad. The VZ.58 assault rifle’s performance was
close to the AK-47s, so I called a contracting officer I was cool with, but he
said the Army didn’t want them. “Their parts aren’t interchangeable with
the Kalashnikovs, Diveroli...”
“But they take 7.62 mm x 39 Russian rounds, same as the
Kalashnikov.”
“They’re not interchangeable... we’re not interested.” Shit, there goes
another four or five million I could have made. I did buy the 25 million 7.62
mm rounds from Trachta, and Bernatik managed to come up with 9 million
7.62 mm rounds - a total of 34 million rounds - so the trip wasn’t a
complete waste of time. Unfortunately, I was still short on ammunition...
and getting more desperate.
ON THE FLIGHT BACK TO THE STATES, I called Jenna and asked
her to meet me in New York. We had been arguing due to my excessive
traveling schedule and I thought it would be a nice break. On approach to
JFK International airport, I remember thinking the Statue of Liberty looks
so small standing in the harbor.
We stayed at the W in Manhattan; it’s a nouveau riche, black cherry
infused martini kind of place. Sleek and trendy. Marble and stainless steel.
Minimalist decor, I think they call it “modern deco.”
We took a rickshaw to the Meat Packing District and ate at the Spice
Market, a conservative posh restaurant. There were lots of businessmen and
investors having power lunches. Over filet of sole with almond butter sauce,
I surprised Jenna with a diamond encrusted Michelle watch. “Ohmigod,
baby...” Jenna’s eyes filled with tears and she sniffed. “You didn’t have to.”
“I’m gonna try harder from now on Bear,” I told her. “I swear.”
Jenna and I saw the musical Rent and visited the 9-11 Memorial at the
World Trade Center site. We walked in the park and read the victims’ names
off the granite memorial. I’ll never forget watching CNN that day in 2001,
the sounds of the bodies hitting the pavement and the sight of the north
tower collapsing.
I was one of the largest suppliers of munitions in the war on terror and
it had started there, at Ground Zero. I wish I could say I felt patriotic or
proud, but I didn’t. All I felt was overwhelmingly sad and empty.
We were walking into the lobby of the W when my cell rang.
“Efraim,” said David from Albania, “listen, I’m just outside the hanger at
Rinas (the Albanian airport where the Chinese ammunition was being
repackaged) and you’re not going to believe this... U.S. Army Special
Forces are here and they’re loading up two C130 aircraft with Chinese
ammo and mortars. One of the Albanian soldiers said they’re flying it into
Africa.”
I called Shapiro, asking, “Should I have David photograph them?” I
thought I might need to use this tidbit of information, in defense of my own
actions regarding the purchase of Chinese ammunition in Albania.
“Are you crazy?” he snapped. “Don’t do anything!”
CHAPTER TWENTY-TWO
 THE UNITED KINGDOM OF GREAT BRITAIN
“There is at least one thing worse than fighting with allies. And that is fighting without them.” - Sir
Winston Churchill

DESPITE THE ISSUES HEINRICH AND I HAD in Albania, my

cousin Joe - one of my top lieutenants at the time - and I flew to England in
late September of 2007 for the DSEi (Defense Security and Equipment
International) Exhibition; the biggest international defense exhibition
featuring land, sea, and air products and technologies.
While London is one of the world’s oldest, largest, and most historic
cities, I was struck by how modern and bustling it is. Its downtown is
packed with massive skyscrapers, stores, and sidewalks teeming with
shoppers. Beautiful parks and gardens are scattered throughout.
DSEi’s Expo was massive. There were booths and representatives
from all the manufacturers. I was amazed at how many of them I knew.
Manufacturers’ sales representatives and various arms trading companies
were shoving their business cards into the palm of my hand and asking me
to call them. The same guys who I used to look up to were pleading for a
minute of my time. It was the first time I felt like I had made it. I was a
player.
JOE AND I MET HEINRICH and Martin Meixner - Heinrich’s deputy
- at the Exhibition’s cafeteria for a sandwich and a beer. I was working a
deal with Heinrich to complete several line items on Task Orders Three and
Four: 2 million 30 mm high explosive aircraft rounds, 30,000 S-5 and S-8
mortars, 4,000 122 mm artillery shells, and 7,100 50 mm rounds, for these
ancient Soviet T-55 and T-62 battle tanks the Afghanis had. Heinrich quoted
me a price that I wasn’t very happy with - $10.5 million.
We haggled over the price for several minutes and Heinrich said,
“Efraim please, this is a lot of munitions to deliver, a lot of headaches... I
have bills, a greedy bitch of an ex-wife, a… “
 “And a number of girlfriends on several continents,” I interjected.
“Come on, Heinrich, are you really going to make me threaten to go
through MFS or Arcus for this one?” At this point I was almost as
connected throughout Eastern Europe as Heinrich, and he knew it.
“Okay, okay,” he smiled politely, “I’ll take... ten million U.S.”
“You made the right decision,” I said. If he hadn’t, I may not have ever
given him another order.
“Now” said Heinrich, “let’s celebrate.”
HEINRICH INSISTED THE FOUR OF US - him, me, Joe, and Martin
- go to Stringfellas, a world-renowned upscale strip club in the heart of
London. They had girls from all over the globe, from Parisians to Russians,
from Indians to South Africans. The place was set up like a fashion show,
with multiple stages or “runways,” track lights, a smoke machine and
stripper poles. It smelled like fine Cuban cigars and French perfume - the
way a strip club should smell.
The manager recognized Heinrich the moment we walked in. He
sauntered over and asked Heinrich, “Would you like your usual room?”
“Of course,” he said, and slipped the manager his black Amex card.
Two minutes later we were seated in a room lined with booths and
strippers, drinking Dom Perignon champagne, Johnny Walker Blue Label
whisky and Belvedere Vodka, while getting lap dances. These chicks were
feeding us fresh fruit while we were making small talk about buying up
arms and munitions from the Hungarians and others. It was a surreal scene.
Every hour the manager would bring Heinrich a stack of 3,500 pounds
and he would throw the money in the air; the notes - stamped with pictures
of the Queen - would rain down on the group and the girls would go wild,
grabbing at everything they could get. I told Heinrich, “You’re going all out
tonight, huh?”
“Yeah, well,” he laughed, “I don’t want to be the richest man in the
graveyard.” This was common for Heinrich; he loved fine whisky, women,
and cigars. Who could blame him?
Toward the end of the night, a platinum blonde Russian stripper,
“Candy Cane” - I’m thinking that probably wasn’t her birth name - leaned
into me and whispered, “You want to meet me after work? I could come to
your hotel room?”
Between the hookers, strippers, and the women I met at bars and clubs
that were dying to sleep with a young American businessman, I was taking
a different woman home every night during my European trips; she was a
beautiful girl, but Jenna was flying in the next morning and the thought of
“Candy’s” perfume lingering on the sheets of my hotel room or leaving a
lipstick stain behind or her thong for Jenna to find deterred me. I needed to
be primed and ready, like a guy that hadn’t had sex in a week.
I shoved some pounds into her hand and said, “Not tonight, my girl’s
coming in tomorrow.”
THE FOLLOWING DAY JENNA ARRIVED at Heathrow. I had
spent most of the day at the DSEi Expo speaking with various
manufacturers and suppliers continuing my efforts to locate more hardware.
I was staying at a contemporary five star hotel, and when I got back to the
room, Jenna answered the door in a towel. I pushed her onto the bed,
yanked the towel off her and she dropped backward onto the mattress -
laughing. I attacked her like a lion on a gazelle; I was biting her neck while
she was scratching her nails down my back. It had been nearly two weeks
since I’d seen her. All the other girls were just women... they were an
escape from work, a form of stress release, nothing else... But I was in love
with Jenna.
It was one of those nights that stick out in your mind. Not because of
the sex - although that was great - but because we lay in bed and talked and
laughed all night. We made love and drank wine. It was a great night.
The following morning I woke up to Jenna jumping around my suite
yelling, “Get up sleepy Bear, we’re in London!”
We ate bubble and squeak (fried potatoes and vegetables) for breakfast
in a nearby cafe and caught a historic tour of London in one of those red
double-decker busses. We saw the House of Parliament towering along the
Thames, Westminster Abbey, and the Tower of London, where Sir Walter
Raleigh and Thomas More were imprisoned.
Over the next couple of days, Jenna and I held hands and wandered
through the city along the River Thames, crossed Tower Bridge, had
crumpets and tea with milk at a cafe near Hyde Park. We were watching the
changing of the guard at Buckingham Palace, the home of Britain’s
Monarchs, when Jenna looked up at me and said, “I never see you
anymore.” We had been together for two days straight; shopping in the
fashionable West End district, and seeing the sights of one of the most
amazing cities in the world, but I understood what she meant.
 “Hang in there Panda Bear,” I whispered. “It won’t be like this
forever.” But the truth is... I had no idea when things would change or even
if I wanted them to. I loved the life I was living.
AFTER JENNA LEFT FOR MIAMI, Joe and I dragged Heinrich’s
young Ukrainian lackey - Bogdan Choopryna - to Amsterdam for a quick
three-day vacation. Bogdan had never been stoned before, so that was a
must. He was a very serious guy, a tough looking Slav in his 30s. He never
laughed or smiled - not a funny guy - but when we got some weed in him
Bogdan wouldn’t stop giggling and laughing. He was suddenly all hugs and
kisses. He kept telling Joe and me what “great guys” we were, and how
much he “loved his American friends.” The contrast was comical.
The last day we were there, I made the mistake of ordering mushrooms
at this cafe near Vondel Park. Joe looked at the menu and ordered a latte and
I said, “I’ll try the hallucinogenic mushrooms.”
“Jesus, Efraim,” he laughed, “you go hard.”
I had tried ecstasy, acid, and opiates, but I wasn’t prepared for the
mushrooms. My perception wasn’t slightly altered - I was fucking seeing
shit. Inanimate objects seemed alive, and I couldn’t stop laughing. And
when I did laugh, it sounded like a hyena. We were walking in the park, and
I was tripping hard. There were couples walking their dogs and little kids
riding bikes. Everything looked amazing. I was having a great time, and
then Jenna called. “Why haven’t you called?” she yelled. “You haven’t
called in two days!”
“What’re you? We talked last night!”
“Only because I called you!” she screamed, and suddenly the park
started to get irritated at me. Everything felt unfriendly. “You haven’t called
in days!”
I felt like everyone was staring at me. The Dutch couples were glaring.
The dogs were growling. The kids were sticking out their tongues at me.
Even the trees were angry that I hadn’t called Jenna, as insane as that
sounds.
“What does it matter whether I call you or you call…?”
“We’re through! I’m sick of this. You don’t call. You’re never home...
and I’m... I’m calling Adam!” Adam was this 35-year-old loser tattoo artist
ex-boyfriend of Jenna’s who had earrings that looked like model car tires.
He would call every couple of weeks to see if she and I were still dating.
The guy was sleeved out and had tats on his neck - God knows where else.
“He loves me.”
“You’re not gonna call Adam.” I had heard the threat many times.
“I’m calling him!” she screamed. “I’m going to his apartment, and I’m
gonna!” Now that part was new, and everything suddenly got really dark.
My girlfriend was threatening to fuck another guy - that’s unacceptable!
She was killing my high. “I’m gonna and I’m gonna…”
“Jenna,” I yelled into the phone, “I’m within walking distance of one
of the largest Red Light Districts in the world... Do you really want to play
this game? ‘Cause I’ve got enough cash on me to nail every whore on that
strip!”
She burst into tears. Over the next couple of hours we threatened and
pled with each other not to do anything drastic. The worst thing about it
was, it was a common fight. Maintaining our relationship long-distance ran
me $3,000 to $5,000 a month on cell phone bills alone. It was $4 to $5 a
minute for international roaming in some countries.
WHEN I GOT BACK TO MIAMI I STOPPED BY MY MOTHER’S
HOUSE. I hadn’t spoken to her in almost a month - it happened sometimes.
She would get frustrated and just stop calling; it typically took me a week
or so to notice. Sometimes I would ignore the “silent treatment” and after a
couple weeks she would start calling again, but every once in a while she
would hold out.
This time, it had been a month - requiring a face-to-face visit - so I
stopped by her house. My mother opened the door and said, “Mazel Tov,
you came to see me?” She hugged me for a long time, and then pulled me
inside the house. “Let me feed you...” She made me chicken, stuffed
cabbage, and Matzo ball soup.
I sat at the table and ate. I told her about some of AEY, Inc.’s more
benign deals; a little ammunition to Afghanistan and some assault rifles to
Iraq. I told her some funny stories, tried not to curse and avoided anything
to do with Jenna. After a good hour or two visit, I told my mother, “I love
you,” and I left. The following day she started calling me again - and that’s
how it went sometimes.
IN LATE 2007, I had several flight permits get delayed, or AEY, Inc.
was quoted a figure that was so outrageous it constituted a denial, or they
would suggest that I should speak with so and so at one of their state-run or
private air freight carriers.
 It all boiled down to lack of accessibility to Afghanistan. Unlike Iraq,
which is located on one of the world’s most trafficked waterways, the
Persian Gulf, and next to two U.S. allies - Turkey and Kuwait -
Afghanistan, by contrast, is landlocked and its neighbors range from uneasy
allies like Pakistan and Uzbekistan, to outright adversaries, such as Iran.
After nearly ten years of war, there was virtually no infrastructure left
to truck in the munitions - they had to be flown in, often, ironically, by
Russian veterans of the 1980 Soviet Union’s Afghanistan war. The only
routes were over former Soviet Bloc countries. All of which were now run
by notoriously corrupt governments that had all but sold their official duties
and powers to the highest bidder. These governments were working in
conjunction with their state-owned and privately owned air freight
companies to price gouge or monopolize all Afghanistan-bound cargo.
It was a constant problem, and on several occasions I had to call Kim
Jones to explain a shipment was going to be late. “How late?” she asked.
“We need that shipment. What’s the problem, maybe I can help?”
“A week... maybe two,” I replied. “The problem is we have good
reason to believe the governments of Turkmenistan and Azerbaijan are
being unduly influenced into denying our over-flight permits by local
competing carriers as a result of AEY, Inc. not contracting with their
authorized carriers, so we’re being shaken down, Kim… Sabotaged...
extorted. I either pay an outrageous fee using their carriers or I wait until
they decide to issue the flight permit... can you help with that?”
“Aw...” there was a long silence and she almost whispered, “no, that’s
kinda what we have private contractors for... We can’t... You know.” They
couldn’t pay bribes. Instead, they hired defense contractors to take actions
and work in environments that the Army couldn’t legally engage in.
Sometimes I paid the outrageous fees, other times I hired the state-
owned air freight companies, other times I told the Army, “Well, then
you’re gonna have to wait, Kim.”
“Shoot!” she griped. “Efraim... we need that shipment. I know you can
do something.”
“Listen Kim, I’ve got no problem having a carrier attempt a mission
without the proper over-flight permits.” They had done it for me on a
couple other occasions. “I’m even willing to mis-declare the military cargo
as commercial goods... That’ll guarantee the permits; just give me the go
ahead.” I almost laughed; there was no way she was going to tell me to do
that.
“I... I can’t,” she sighed, Kim was really struggling with what to say.”
Look, I can’t tell you which of those two to do - pick one. Do whatever
you’ve gotta do to get it to Kabul by the end of this month... Got it?”
“Got it!” She didn’t tell me to do it, but she didn’t tell me not to do it
either.
CHAPTER TWENTY-THREE
 TASK ORDER FIVE
“Nine times out of ten an army has been destroyed because its supply lines have been severed.” -
General Douglas MacArthur

I WAS USING RUSSIAN IL-76 ILYUSHINS to ship our freight. The

IL-76 was originally designed for the Soviet Air Force as a multi-purpose
four-engine strategic airlifter to deliver heavy machinery to remote, poorly
serviceable areas of the U.S.S.R. Since the breakup of the Soviet Union, the
IL-76 has been adopted as the workhorse of the Eastern European airfreight
industry. The problem with the Ilyushins is their fuel consumption. They’re
serious gas-guzzlers: 80 percent of the cost associated with air cargo is fuel.
747s, however, are much more fuel-efficient. Unfortunately, most insurance
companies won’t allow 747s to fly cargo into a war zone, which was a real
bummer because using 747s would have saved AEY, Inc. hundreds of
thousands of dollars over the life of the Afghan contract - maybe millions.
AEY, Inc. was blanketing the airfreight community with inquires
looking for a carrier that would fly 747s or similar western-style fuel-
efficient aircraft into Kabul. That’s how I met Simon Milne, a freight broker
out of New York. He was a Brit, but you would never have known it by his
behavior - loud and obnoxious. Overbearing to the point of amusing.
The first time Milne and I spoke I immediately began whittling away
at his prices. “Why don’t you try lowering the cost by picking up freight
from Kabul, for the leg back; pick up some additional revenue, and reduce
my per-flight cost there?”
“Oh... that’s a great idea Efraim; what do you suggest we haul back?
Heroin? Bodies?” he said sarcastically. “You ignorant bloke, no one’s
shipping cargo out of Afghanistan... Stick to selling guns and ammo; I’ll
take care of the freight.”
As insulting as the comment was, I laughed. I didn’t like the guy, but I
liked that he spoke his mind. The whole airfreight business is notoriously
corrupt and rife with fraud and deception. Milne was no exception - he
embodied the industry.
A FEW WEEKS LATER Milne notified me he had located a single
747 operator - Tesis Avian - that could fly 110 metric tons, the equivalent of
roughly 6 million rounds of ammunition, to Afghanistan. AEY, Inc. had just
bought 15 million rounds from MFS (Hungarian Ammunition
Manufacturing Inc.) in Hungary, and Milne was ready to deliver it. “Two
hundred and twenty thousand U.S.,” he said, “from Hungary to the Afghani
war zone.”
What Milne didn’t tell me was that he planned on having the 747 land
in Kyrgyzstan, unload the carrier, split up the freight between two Ilyushins,
then ferry them from there into Kabul International Airport.
Kyrgyzstan is located in central Asia - wedged between Kazakhstan,
China, and Afghanistan - it’s nothing but mountains and rocks. It’s been an
independent “democracy” since the collapse of the Soviet Union, notorious
for cronyism, corruption, fraud, and nepotism that penetrate all levels of the
Kyrgyzstan government. In late March of 2005 - after serious fraud
allegations - the “Tulip” revolution overthrew the corrupt plutocratic
government and replaced it with an even worse one. The new regime ranks
among the top 20 percent of the most corrupt governments on the planet.
I’d have never landed a plane there. Never!
IN MID 2007, after the 747 landed at Bishkek airport and rolled to a
stop, the crew disembarked and a dozen heavily armed Kyrgyzstani soldiers
rushed out of a nearby hanger, their AK-47 assault rifles held high and tight,
aimed at the terrified Tesis crew members. The soldiers screamed in
Russian, “Stoy! Pavdigny ruki! Pavdigny ruki! [Stop! Put your hands up!
Put your hands up!]”
The aviators complied immediately; they were handcuffed and led
away. The Kyrgyzstani Military seized Tesis’ plane, confiscated AEY, Inc.’s
cargo, and arrested the crew. They grounded the plane at the Bishkek
Airport, unloaded our ammunition into a storage hanger, and kept the crew
in a grungy holding cell at the base.
When Milne explains that the Kyrgyzstanis had seized AEY, Inc.’s
cargo, my first question was, “Why is my fucking cargo in Kyrgyzstan!”
“Well...” He never really had a good explanation for that, but what he
did say was, “They’re saying we don’t have the correct license - but we do.”
It was a straight shakedown by the organized crime group known as “the
Kyrgyzstani government.”
I had to get Rock Island involved. “Kim,” I said, “one of Task Order
Two’s shipments was detained in Kyrgyzstan, they arrested the crew and…”
“How many rounds was it?” she interrupted.
“God Kim,” I half laughed in shock, “there are five Tesis crew
members locked away in a Kyrgyzstani prison somewhere...” Not that I was
all that concerned with Tesis employees, but she didn’t even ask about
them.
“Sorry, sorry... That’s horrible,” she said, but it lacked sincerity. In
Kim’s defense, the Army was putting a tremendous amount of pressure on
all of us to complete the Task Orders as quickly as possible. “How much
did they get?”
Seriously? “Roughly six million rounds,” I sighed. This was one tough
chick. “Look, I need you to call the U.S. Embassy in Bishkek. Tell them
this shipment is vital to the war against terrorism - all that shit, you know
what to say.”
Tesis’ legal department and the Defense Attaché with the U.S.
Embassy in Bishkek got in touch with the “GKNB” (State Security
Organization) - the Kyrgyzstani equivalent of the old Soviet Union’s
“KGB” (Committee on State Security) - and within a week they negotiated
the release of Tesis’ aircraft and its crew, but the Kyrgyzstanis kept AEY,
Inc.’s Hungarian ammunition. So I called Rock Island back and Kim told
me, “They want you to call them to negotiate airfreight fees...”
It took me and Doudnick - my Russian-speaking deputy - months to
negotiate with the Kyrgyzstani government; not directly of course, but
through a third party. They’re not stupid enough to talk openly about
bribery when it pertains to the U.S. Government’s cargo. Instead they said,
“Talk to this guy about that. He can probably help you.” So that’s what
happened.
Doudnick and I were directed to speak with AES Cargo, a freight
logistics and airport services company. We were told they were the only
company allowed to ship the ammunition from Bishkek to its final
destination in Kabul. AES Cargo then proceeded to charge AEY, Inc.
outrageous usurious rates for labor, packaging munitions, and use of
forklifts and pallet jacks, sticking our cargo on two Ilyushins and flying it to
Kabul. They were charging us $160,000 for this, roughly $120,000 more
than it should have cost. It was extortion, but I didn’t have a choice. When
it was all said and done, I still cleared over $200,000 on that shipment.
Unfortunately I didn’t have a choice but to keep dealing with Milne -
we were working together on a potentially massive munitions purchase
from UKRSPETZ (Ukrainian Exports). I didn’t trust the “wanker”
anymore, but I was becoming more desperate for large stockpiles of
inexpensive munitions. In the end we traveled to Ukraine, but the
negotiations broke down. They were unreasonable and we never made a
deal - Milne was a waste of time.
ON NOVEMBER 19TH OF 2007, Nick Wood with the New York Times
contacted the Albanian Defense Minister, Fatmir Mediu. “I’m arriving
tomorrow morning to visit Rinas Airport,” said the reporter. “According to
my source, Ylli Pinari, head of MEICO, is repackaging Chinese ammo for a
U.S. company called AEY Incorporated; that ammo is being shipped to
Afghanistan.” Wood let it sink in and he continued, “It’s my understanding
that you’re involved in some way. Would you care to comment on the…”
“I have no comment on dis matter,” snapped Mediu and he ended the
call.
Within a few hours of that conversation, Mediu was at the U.S.
Embassy where he met with the Ambassador, John L. Withers II, and
Attaché, Major Larry D. Harris of the U.S. Army. Mediu pled with the
Ambassador to somehow stop the reporter from arriving in Albania or
restrict him from Rinas Airport, saying, “My fear is I’ll be implicated in
some type of scheme to defraud the Albanian government...”
“I can’t do that,” said Withers. “Why not just deny any involvement?”
The look on Mediu’s face said it wasn’t that simple. The relationship
between the U.S. Embassy and the Albanian government was complicated
and shadowed in shades of grey. “I’ve helped you in the past...”
“All right,” said Withers, “so far, the reporter only has a source he’s
trying to verify... If you remove all evidence of the Chinese ammunition
from the hanger where they’re doing the repackaging - ”
“Ambassador,” interrupted Major Harrison, visibly uncomfortable with
the suggested cover-up, “I don’t think that’s…”
Withers held up his hand silencing the Major, he turned to Mediu and
continued, “That’s the solution to your problem.”
Mediu called the commanding General of the Albanian Armed Forces
and ordered him to have the hanger cleared of all the Chinese ammunition.
The following morning - hours after the ammunition had been carted off by
Albanian soldiers - Wood arrived at the airport to find nothing but a bunch
of trash.
Once the reporter left, the Albanian army returned the ammunition and
the repackaging continued. It was one of several things that the U.S.
Embassy and U.S. Army did to keep the pipeline of Chinese ammunition
flowing into Afghanistan.
WHEN TASK ORDER FIVE CAME IN, on December 12th of 2007, I
was actually relieved. It was roughly a $22.5 million order: slightly over
180,000 OG-7V antipersonnel grenades, nearly 320,000 GP30 HE
grenades, and a minimal amount of 7.62 mm rounds - roughly 4.8 million.
A very doable order.
A FEW DAYS AFTER THE ORDER came in I flew to Bulgaria with
Mark Morales, a supplier with Allied Defense Group, of Baltimore, MD.
Mark was a clean-cut Mexican-American in his late 30s - young for an
experienced defense contractor, who started his career interestingly enough
with General Dynamics. He had contacted AEY, Inc. after learning we had
been awarded the Afghan contract, and offered to sell AEY, Inc. 10,000 S-5
and S-8 rockets. It was perfect timing, and helped to complete one of Task
Order Four’s line items. We were in Bulgaria so I could inspect the product
before shipping.
It took us about two hours - by Jeep - to get to the Air Force armory.
The place was more like an Albanian bunker. It was an old Soviet-style
aircraft maintenance depot, which had been carved into a mountain near the
town of Pirdop. We met with a full Colonel in the Bulgarian Air Force. He
was hard looking, in his late 50s with a short white crew cut. There were
about a dozen soldiers standing around in weathered uniforms smoking
cigarettes. The Colonel introduced himself to Mark and me. We shook
hands and he gave me a long stare. “How old are you,” asked the Colonel,
“Mister Diveroli?”
“Twenty-two,” I replied, “but this isn’t my first rodeo.”
The Colonel chuckled, and when he smiled I noticed he had a gold
incisor. He motioned for us to follow him inside the bunker. There were two
MiGs that looked like they had been stripped for parts, roughly 20 Mi-17
attack helicopters, and lots of air/craft munitions; missiles, bombs and
rocket. There were old metal sheds, rusting steel beams, and munitions in
various stages of corrosion stacked all over the interior. The Colonel had
two soldiers pry open several wooden crates revealing multiple rockets.
“These are the S-5’s and S-8s you’re buying,” said the Colonel. “Is good?”
Both the S-5 and the S-8 rockets were developed by the Soviet Air
Force and used by the MiG-19 and MiG-23 jets. But they could also be
used by attack helicopters against ground targets which was what the
Afghan Security Forces needed them for. At the rear of the rockets are
elongated exhaust nozzles and eight forward-folding fins that spring out the
moment the rocket leaves the launch tube, providing stabilization until the
high explosive warhead strikes its target, vaporizing everything within a 45-
foot radius with shrapnel fragments... and I was staring at two of them. It
was a True Lies moment, and in my best Arnold Schwarzenegger imitation I
almost said, “I know what this is... this is an espresso machine. No, no wait.
It’s a snow cone maker... is it a water heater?” but this wasn’t the right
crowd, so I kept my mouth shut.
I inspected several of the four foot, six inch long cylindrical steel
bodies for any signs of corrosion or damage, but the rockets looked like
they had just come off the assembly line at Arcus. “They’re good, Colonel.”
What I didn’t know was that several of the wooden crates had
extensive termite damage.
SEVERAL WEEKS LATER, all 10,000 were loaded onto two IL-76s
and flown to Kabul. During the flight the vibration of one of the birds
caused several of the crates to break apart and their contents - multiple S-5
and S-8 rockets - to slip out into the cargo bay. For hours a dozen live
rockets rolled around the belly of the Ilyushin - not something you want
decades-old Soviet surplus air-to-ground rockets doing: bouncing around
inside an ancient Russian-made cargo jet at 30,000 feet.
THE FOLLOWING DAY, I was walking through the terminal at
Miami International Airport when I got a call from Kabul. “Diveroli!”
barked the Commander I’d been dealing with in Afghanistan - I recognized
his voice immediately. “Do you have any idea what would’ve happened if
one of those things had gone off?”
“Excuse me...” I said, “What are you talking about, Commander?”
Apparently, after the aircraft landed at Kabul International Airport and
the ground crew lowered the rear cargo ramp, several of the S-8s rolled out
of the plane’s belly, down the ramp, and onto the asphalt with the Ping!
Ping! Ping! of metal bouncing on asphalt; and they landed at the feet of the
ground crew. “Run!” screamed the crew leader. The rockets caused an
evacuation of the area - virtually shutting down two landing strips.
They had to bring in an EOD (Explosive Ordinance Disposal) robot to
determine if the plane and its highly explosive cargo were safe to unload,
and the Commander was pissed. “Diveroli, do you have any idea of how
much danger you put my guys in... If I ever get my hands on you…”
“Commander,” I interrupted, “keep in mind, I didn’t pack the fucking
things myself.”
This guy was pissed! He threatened all kinds of stuff, but once he
calmed down the Commander realized there was no way I could have
known about the termites. “Sir, it’s not like it’s in my best interest to have a
plane go down... This stuff’s not insured.”
IN LATE DECEMBER of 2007, I located several of the line items on
two of AEY, Inc.’s Iraq contracts in Serbia. I contacted Dusan - my buddy,
the Serb from Serbia, now living in Serbia - and told him to pick me up at
the Belgrade International Airport, which he did, in a 20-year-old rusted out
Yugo.
“Are you kidding me?” I said, to Dusan when I saw the two-door
compact. I had sent him money to rent a car, “a decent car. I specifically
said to rent a decent car.” My oversized suitcase barely fit in the hatchback.
We had to force it closed. On the way to the Hyatt - the nicest hotel in
Serbia - the rear door actually popped open and we had to pull over on the
interstate. I yanked my suitcase out of the back, emptied the contents into
the hatchback and left the case on the side of the road.
When we pulled up to the hotel, the valet looked horrified - he didn’t
even want to park it. We had to threaten to abandon the Yugo in front of the
hotel.
The next morning I met with Branko Djuric (no relation to Dejan
Djuric) the director of Middle East markets for Yugoimport (no relation to
Yugo Motors). Yugoimport was the state-owned company in charge of
liquidating the “excess” Serbian Military armaments. Branko was a big bear
of a guy in his late 50s, who always seemed to be wearing a bad suit.
At their offices in Belgrade, we were sitting in a makeshift conference
room with water stains on the ceiling tiles and boxes of manuals lying
around the room. Dusan and I were looking over an updated list of available
weapons and munitions. I glanced around at the mess in the room and
couldn’t believe that Yugoimport didn’t have better accommodations.
Branko grunted, “You see dis building?” He pointed to a six story burnt-out
structure roughly a hundred meters outside the room’s window. “That was
our [Yugoimport’s] old office... The U.S. bombed it in May of 1999.”
In early 1998, Serbian military and police forces began “ethnic
cleansing” attacks in Kosovo province of Serbia on alleged strongholds of
Kosovo Liberation Army (KLA), an ethnically Albanian guerrilla
movement fighting to end Serbian control of the province.
On March 24th of 1999 - after failed negotiations - NATO began an
intensive bombing campaign - spearheaded by the U.S. Air Force - directed
at Serbian military targets and later at civilian infrastructure and
government buildings.
The bombing came to an end in June after then-president Milosevic
agreed to withdraw Serbian forces from Kosovo and allow the deployment
of NATO peacekeeping troops. “It was nicer building...” he chuckled, and
then he made a “Kaboom!” sound. “Smart bomb.”
“Why Yugoimport?” I asked. It didn’t seem like one of the first things
NATO would have bombed, certainly not an essential target.
“Aw,” he gave me an exaggerated shrug, “We might have been helping
to supply Serbian brigades in Kosovo... and refurbishing military aircraft
and tanks for Saddam Hussein...” In violation of the U.N. embargo placed
on Iraq. “Dis is what they said.”
I was stunned. I thought about saying, Well gee Mister Branko, now
you know that NATO takes two things very seriously - supplying its enemies
with weapons and countries killing off their own citizens, but I didn’t.
Instead I said, “So... you got my stuff here or…?”
On our way to the military depot, while driving on a cracked asphalt
road littered with potholes and lined with garbage, Branko pointed out
several buildings bombed in early to mid-1999. “Dis used to be government
building,” he said as we drove by a charred hollowed out concrete shell.
“And dis one... dis Chinese Embassy, U.S. smart bomb, it killed three in
early May of 1999; injured twenty.” He chuckled as we passed the Chinese
Embassy’s gated complex, “U.S. say, ‘accident’...” The guy just wouldn’t
let up on the U.S. bombs.
“You see dis, here?” he motioned to the twisted steel skeletal structure
of what used to be a bridge lying in the Danube River. “Stealth fighter do
dis... Is still not rebuilt.”
 “Damn shame,” I said, “looks like it was a nice bridge.” A couple of
miles down the road, part of the street had collapsed. It was more than a
pothole - half the road had been washed away. As Branko maneuvered our
vehicle around the missing asphalt, I glanced at the Serb. “Don’t tell me...”
I said, sarcastically, “U.S. smart bomb, May of 1999.”
He looked sideways at me - very serious - and then he burst into
laughter, “No, dis rain.” Branko chuckled, “No smart bomb. Serbian rain.”
“So,” I asked,” how do you know it was U.S. planes; the British and
several other NATO nations have bombers...”
He got this big grin on his face, “Because we shot down a stealth
fighter with a 1960 Soviet made SA-3 Goa surface-to-air-missile.”
Apparently, on a moonless night on March 7th of 1999, after dropping its
2,000-pound laser guided bomb, an F-117 “Nighthawk” was struck by an
SA-3 missile, fired from an improvised network of Serbian SAM radars.
The pilot ejected behind enemy lines and was snatched up by a commando
team hours later. “Forty-three million dollar plane... Kaboom!” Branko
glanced at me and said, “Months later we shot down F-16 fighter... Serbians
are dee best.”
Then from the back seat Dusan said, “Da best.” And the two Serbs
nodded at one another in national solidarity. It made me smile.
The warehouse was on a Serbian Army base near Smadervo - not
much to look at, just some chain-link fences and a few soldiers guarding the
contents of a dozen large aluminum storage units.
The interiors were stacked with wooden crates; half of them weren’t
even labeled. Dusan and I spent an hour randomly prying open crates
containing DShKs (Degtyaryov-Shpagin Krupnokaliberny Large-Calibre’),
a Soviet-designed heavy infantry machinegun, and half a dozen crates
containing the DShK’s U.S. equivalent, the M2 50 cal. Browning. How
Yugoimport got ahold of the U.S. machine guns I don’t know, but AEY, Inc.
needed 24 of them. Dusan pulled one of the five-foot hunks of iron out of
its crate to get a better look; it must have weighted over 80 pounds - empty.
“That...” I said, pointing to the cumbersome weapon “is a recoil-
operated, belt-fed, air-cooled heavy machinegun designed by John Moses
Browning and affectionately known as... ‘The Ma Deuce’.”
“Very nice,” he laughed, placing the weapon back in the crate and
glancing at AEY, Inc.’s list of munitions.
“We need a bunch of ‘em.”
 Once I was satisfied the weapons were in good condition, I called to
have the balance of my purchase transferred to Yugoimport’s account. AEY,
Inc. purchased 300 DShK machine guns, nearly 500 RPK (Ruchnoy
Pulemyot Kalashnikova’) light machine guns, and over twenty M2 50 cal.
Brownings at a cost of $500K and sold them to the Army for nearly $1
million. Nice.
A COUPLE MONTHS AFTER I RETURNED TO MIAMI, I went out
clubbing. I had been out most of the night, and I was drunk and coked up. It
was around five o’clock in the morning on March 3rd of 2008, and I was
driving my new silver-on-black S550 Mercedes-Benz home when I decided
to stop by AEY, Inc.’s office to check on the third shift employees - I was
running around the clock shifts.
I stumbled into the office thinking I might catch someone sleeping or
looking at Internet porn, but everyone was on the phone. All four
employees were hard at work tracking down weapons and munitions.
I was suddenly proud of my third shift employees. Everyone
acknowledged me as I stomped into the middle of the office and started
telling them all how “awesome” they all were. “Soldiers. That’s what you
are... Soldiers,” I slurred, and pointed to them. “You’re on the front lines.”
They all nodded their understanding, but I’m sure they were all
wondering what I was on and if I had anymore. “Thanks, Boss,” said one of
them.
They all started to turn back to their work, but I wasn’t finished.
“You!” I almost yelled. “You… guys are the lifeblood of this company...
Soldiers.”
“Soldiers. We got it,” mumbled a staff member. “Soldiers. Frontlines.
Lifeblood. Got it.”
They were all being polite, but I got the distinct impression they
wanted me to leave. I slowly made my way out of the office and into the
parking lot. I managed to start my car and pull out of the parking lot -
without my lights on - directly in front of a Miami Beach police cruiser. I
might have even swerved; I was that fucked up. The police hit the cruiser’s
siren, Whoop! Whoop! and turned on their bright blue and white strobe
lights.
I pulled my vehicle to the curb and tried to compose myself as the
officers approached the vehicle, “License and registration,” said Officer
Shimko. A minute later he asked me if I had been drinking and said,
“Would you mind stepping out of the vehicle?”
“Sure,” I replied, exiting the long body Benz, “but I haven’t been
drunk... drinking.” I’m sure I reeked of alcohol.
“I understand,” grunted Shimko, and the second officer shined his Mag
light in my face - my eyes were bloodshot and my pupils were dilated from
the cocaine. The blinding light caused me to squint. Shimko then asked that
I try walking a straight line, toe to heel.” The officer then demonstrated the
sobriety test on the curbside yellow line - it didn’t look so difficult.
I took the first step and immediately stumbled off the line. “Shh...
shit,” I slurred and looked at the officers, expectantly. “Lemme… try it
again... Let me try again.”
Shimko nodded, as if everyone stumbled the first time. “No problem,
Mister Diveroli... take your time.” The two officers smiled at each other.
I placed one foot in front of the other and almost tripped over the curb,
“Sorry, sorry.” I looked at the officers, “Let me try again.”
“Sometimes that happens, not a problem,” snickered the second
officer. “Give it another try.” The two lawmen glanced at one another again
and grinned. I realized they were fucking with me, but I really thought I
could pass the test. The third time I stumbled Officer Shimko told me not to
worry about walking the line. “It’s a tough test.”
“You... you sure?” I stammered, “’cause I can... do it.”
“Of course you can,” he agreed. Then he asked me to close my eyes,
lean my head backward and touch my index finger to the tip of my nose.
After multiple tries I still couldn’t do it. “That’s not a big deal,” chuckled
Shimko. “You’re doing real good Mister Diveroli... Let’s try one last test
and we’ll wrap this up. Touch your thumbs together behind your back...
Think you can do that?”
I nodded, shuffled around and touched my thumbs together. Shimko
slapped a pair of stainless steel Smith and Wesson brand handcuffs on my
wrists.
“Aw, man...” I said, as they placed me in the back of the cruiser for the
drive to the City of Miami Beach Police Department. When I got to the
booking station the officer asked if I would take a Breathalyzer, “You might
be under the limit,” he said. “Give it a try.”
I was so drunk that I thought, maybe I’ve sobered up enough to pass it
and they won’t charge me and I can go home, so like an idiot I blew and it
was way over the limit. I was charged with DUI, fingerprinted and
photographed. The next morning I didn’t want to wait for a hearing and
bonded out - for the full $10,000. That day I called Shapiro and told him
about the DUI.
“Well,” he said, “I’ve got a guy that’s very good, his name is Robert
Rief. He’s a DUI specialist.”
“You’re not going to represent me?”
“Well, no...” said Shapiro, seemingly offended at the idea. “It’s a state
misdemeanor.” Of course not, I’d only paid him $100,000! What was I
thinking?! Rief charged me $15,000. His entire strategy was to delay the
proceedings. Postpone. Stall. Impede. He was so good at it that I almost
forgot I even had a pending DUI charge.
A COUPLE WEEKS LATER - in early 2008 - I was in Bulgaria, when
Shapiro told me he had been contacted by Eric Schmitt, a reporter with the
New York Times, regarding a shipment of corroded ammunition AEY, Inc.
had delivered to Kabul. ISD, a supplier out of Bulgaria, had stuck us with
821,000 rounds, some of which was heavily tarnished, poorly packaged,
and mislabeled. We were so overwhelmed then that we hadn’t had enough
time to inspect the shipment before takeoff. We were, however, in the
middle of fixing the problem. I had received an email from the Army
regarding the ammunition, and I had hired Dynamic Logistic International
Ltd. to correct it.
Shapiro was very worried. “This is an issue Efraim,” he whined into
the phone. “You don’t need this right now.”
“We’re fixing it; relax, it’s just some heavy tarnishing on the casings -
it’s cosmetic.” AEY, Inc.’s contract allowed for two-percent nonconforming
or nonfunctioning product, which this didn’t even come close to,
considering the Army - by this point - had ordered well over 100 million
rounds of small caliber ammunition. But to stay in the good graces of my
best client - the U.S. Army - I was still going to correct or replace the
ammunition.
“This is the New York Times,” grumbled Shapiro. “It’s going to get a
lot of attention and probably trigger an indictment. If there’s one thing the
government doesn’t like, its bad press.”
I WAS SKIING WITH GEORGI FROM ARCUS - we had become
close, and I considered him a friend. AEY, Inc. was buying roughly $5
million a month in munitions from Arcus, and I wanted to explain about the
potential bad press. We were at a Swiss style resort in a quaint mountain
town in Bansko, Bulgaria. It was straight out of the Nut Cracker; everything
was frosted with gold and red accents and covered in snow. It was a perfect
day for skiing - clear blue skies and six inches of powder on the slopes.
Georgi and I were on the chair lift slowly gliding up the face of the
mountain. “I’m just saying, this might create some issues, Georgi.”
“So why don’t you meet with this reporter or send your lawyer to talk
with him…”
I chuckled nervously, “No, the U.S. takes freedom of the press very
seriously. Besides that would only make things worse - nothing’s going to
stop them from running an article.”
“Well,” he sighed, “it probably won’t be that bad my friend.” He was
wrong.
AROUND THE SAME TIME Agent Mentavlos and Perez showed up
at Yugoimport and asked to speak with Banko Djuric. They met in the
lobby.
It’s my understanding Mentavlos asked Djuric if they could speak in
private. “No,” replied the Serbian. “We had nice private conference room...”
He pointed to the burnt-out shell 100 meters beyond their parking lot. “Your
government bombed it in May of 1999... So no, we talk here.”
The two agents shifted slightly and Mentavlos asked, “We understand
you [Yugoimport] recently sold AEY nearly one thousand DShKs and
RPKs...” The agent stared at Djuric, but the Serbian didn’t say anything.
“You do know Mister Diveroli... We know you’ve met him.”
“What do you want?” asked Djuric, folding his big meaty arms. “Why
is criminal investigator asking questions about this man?”
“We can’t say precisely. We’re wondering though, has Mister Diveroli
ever asked you to re-stamp anything from China... Maybe AK-47s or
anything.” Given Djuric’s past relationship to the previous President of
Iraq, it was a fair question.
“Aw, I see...” said the Serbian, as he opened the lobby’s exterior door.
“Are you familiar with the American phrase; go fuck yourself?” Both the
agents nodded, and Djuric continued. “Go fuck yourself.” And the meeting
was over.
He then called me and said, “There were two U.S. investigators here -
Mentavlos and Perez - asking questions about you and Chinese
Kalashnikovs...” In a thick Slavic accent he grumbled, “I tell them...
nothing. I know where these men stay. What would you like me to do?”
“I’ll call you right back.”
I immediately called Shapiro and asked him if I should have them
followed or watched. “Don’t do either of those!” he screamed. “You’re
gonna get yourself charged with obstruction of justice or endangering a
federal agent or... something. Don’t do anything!”
God only knows what Djuric would have done had I asked.
Back then, I was fairly comfortable with a lot of terrible things - but
endangering a couple of federal agents wasn’t one of them.
AT THE SAME TIME AGENT MENTAVLOS was attempting to
gather evidence and question witnesses, Kim Jones was being bombarded
by emails from the U.S. Army in Kabul:
[U]rgent requirement for 7.62X54 mm... In supporting its mission, the
ANP (Afghan Nation Police) have severely depleted the 7.62X54 mm ball
ammunition for the PKM Machine Gun...’ and ‘[R]equired schedules of
ALL ammunition is not to be compromised.
They desperately needed ammunition, and the U.S. Army didn’t care
how it was packaged or where it came from, ‘(Lieutenant Commander
Moises M. Gutierrez) through Colonel Luigi Biever, Director, Regional
Operations informs JMC Security Assistance that “CSTC-A would like
delivery of ammunition to continue and they will accept the risk.”
It came down to the fact that AEY, Inc. was providing so much
ammunition; the U.S. Army couldn’t and didn’t want to stop receiving the
Chinese rounds. “CJ4 has not had sufficient time to analyze the impact of
immediate suspension of the ... deliveries from AEY, Inc... Additionally, the
ANSF (Afghan National Security Forces) are moving into the Spring
fighting season and most ammunition is critically needed... As such, we are
requesting... deliveries continue given criticality of need.”
As a result of the pressure being placed on Kim Jones, she spent a
considerable amount of time calling me. “Efraim,” she would say, “we need
as much ammo as you can get, as fast as you can get it,” or “You need to get
three million 7.62 to Kabul by next week!” or “You’ve gotta move faster;
we need an additional twenty-five million 7.62 by May.”
She probably had to stop herself from saying, before you’re indicted or
worse, the Department of Defense suspends deliveries - which was all she
or the Army really cared about.
 DAVID BLACK WAS IN ALBANIA SUPERVISING THE
REPACKAGING of the Chinese ammunition and verifying each shipment
was properly secured for the flight to Kabul. In early December of 2007 he
was walking into his hotel and the front desk clerk told him, “You need to
go to the U.S. Embassy immediately.”
Ten minutes later he was sitting in a cramped manila interview room
speaking with DCIS Agent Mentavlos. “Mister Black, what you’re doing
here, is illegal,” said the agent. “Now you’re going to get on a plane
with…”
“But Efraim said…”
“It... is... illegal,” he said through gritted teeth. “Now you’re going to
get on a plane with me, we’re flying back to Miami, where the U.S.
Attorney is going to give you immunity and you’re going to testify in front
of the Grand Jury...” David was shaken. The agent let the seriousness of the
situation sink in and Mentavlos wrapped up his speech with, “Or you’re
going to be charged with Diveroli and others, for conspiracy...” He gave
David another couple of seconds to think about his ultimatum and asked,
“Well?”
David took a deep breath and replied, “Sounds like I’m going back to
Miami to testify in front of the Grand Jury.” The following morning they
were both on a plane bound for the States.
DAVID HAD BEEN MIA AND OUT OF “RADIO CONTACT” for
about three days when one of his buddies, Yong Kwon, stepped into my
office. “Efraim,” he said, looking uncomfortable, “I just got off the phone
with David; an agent with the Defense Criminal Investigation Service flew
him back to testify or something...” Mentavlos! “He told me not to tell
you... and he said to get out of the office before I get indicted too.”
“If you want to leave, Kwon, I understand.” At this point I was
worried. DCIS agents were snatching up my employees - not a good sign.
“I’m not going anywhere!” snapped Kwon, defiantly, “I just thought
you should know.”
I CALLED UP HEINRICH AND TOLD HIM, “Wrap up what we’ve
got in the pipeline. We’re closing up shop in Albania.” I explained that
DCIS had grabbed David. “I know you think the Chinese ammo is legal,
and based on my attorneys’ interpretation of the regulations I agree, but
they’re grabbing my employees and... making threats. It’s just not worth it.”
 “No, no... You are right,” he said, and it was the first time I can
remember Heinrich sounding nervous. “Okay, I’ll tell Pinari it’s over. We
are finished.”
AEY, INC. HAD BOUGHT AND SHIPPED nearly 102 million 7.62
mm rounds - over 11 million 7.62 Albanian and 91 million 7.62 Chinese -
over 42 flights. Nearly $12 million worth of ammunition. Our last bird left
Albania on December 7th of 2007.
WITHIN A FEW MONTHS, MEICO was awarded a contract to
Southern Ammunition out of South Carolina. They worked with a local
company known as Albademil, owned by several of Pinari’s cronies.
Albademil hired hundreds of inexperienced villagers from the town of
Gerdec to pry open the ammunition so its components - e.g. brass, steel,
lead, and powder - could be sold as commodities on the open market.
On March 15th of 2008, there was a catastrophic explosion at the
Gerdec factory, killing 26 workers and injuring hundreds of others. The
subsequent investigation led to Pinari, the head of MEICO, Sali Berisha,
Albania’s Prime Minister, and two of the owners of Albademil, along with
19 government officials being charged. Pinari received an 18-year sentence.
ABOUT THE SAME TIME the last of the Albanian ammunition was
arriving in Kabul, I received an email from Georgi with Arcus. They had
the opportunity to buy 60 million Kalashnikov rounds from the Bulgarian
Ministry of Defense. I called Georgi. “Buy it!” I said.
“How much of it do you…”
“All of it Georgi. All sixty million of it!” I paid roughly $36 per 1,000
rounds, because it was Arcus. I didn’t even inspect it because I knew their
inspection would be even more thorough than mine.
IN JANUARY OF 2008, I traveled to Ukraine to speak with the
Deputy Director of Ukrspetz Export, the state-owned military liquidation
company.
I had completed Task Orders One and Two, but I was having a real
problem obtaining the ammunition for Task Orders Three and Four. I’d
depleted Albania’s surplus, and between my contracts in Iraq and
Afghanistan, I had emptied or severely depleted most of the once seemingly
endless surplus munitions stock in Eastern and Central Europe: Czech
Republic, Romania, Slovakia, Bulgaria, Bosnia, and Serbia. I had bought
everything Montenegro and Hungary had - I don’t mean a single Hungarian
supplier or ammo depot, but the entire fucking country of Hungary - and
they were almost out of 7.62 mm rounds. The Hungarian Colonel I was
dealing with actually said, “Mister Diveroli, we’ve got to keep
something...”
“Colonel,” I replied, “it’s not like a war is going to break out.”
“Still, I have an obligation to my country to keep something in
reserve...” The guy was an alarmist.
I was in Kiev trying to acquire 60 million rounds, but I had been
quoted a figure of $40 per 1,000 from Ukrspetz director, and AEY, Inc.
needed to do better than that. The problem was AEY, Inc. was depleting the
supply of inexpensive Kalashnikov rounds, and the Ukrspetz director knew
my options were limited. So, prior to arriving at the Ukrspetz headquarters,
I altered a written offer from MFS out of Hungary to show they had an
availability of 60 million 7.62 rounds and were ready to ship at a price of
$25 per 1,000 rounds, however there were actually only 16 million rounds
in the whole country which AEY, Inc. had shipped to Kabul weeks earlier.
The Deputy Director’s office at Ukrspetz was less than impressive.
There were piles of paperwork on his desk, the furniture, and the file
cabinets. Boxes were stacked in the corner and everything in the office was
nicotine-stained. He had a dozen ashtrays scattered around the place - all
overflowing with grey ash.
The guy was extremely overweight - shut-in overweight - and
squeezed into a shitty polyester suit. When I told him AEY, Inc. was buying
them from the Hungarians for $25 per 1,000, he chuckled, “Yes, Mister
Diveroli, but they don’t have sixty million rounds. We do; and our price is
forty per one thousand,” and he shoved his chubby cigar into his mouth and
clinched it between his yellow teeth.
“Really,” I scoffed, and pulled the doctored MFS offer out of my
briefcase, and slid it across the director’s desk. “The Hungarians are ready
to ship an additional sixty million rounds... Now I’m buying that sixty
million from Ukrspetz or MFS - what’s it going to be?”
“Buy it from the Hungarians - we’re not dropping to twenty-five
dollars... it’s too low for us. We get five times that selling them to our
customers in Africa - sometimes more.” The Ukrainian picked up the Order
Form and scrutinized it, looked at the 60 million figure and grumbled,
“Sixty million... Where’d they get sixty million?” He sucked on his cigar
and blew two streams of grey smoke out of his nostrils - like a cartoon bull.
“Maybe we can do thirty per... Maybe.”
 “Make it twenty-nine and we’ve got a deal.”
He leaned back in his chair and blew several grey smoke rings into the
air; thought about the price for a few seconds and said, “I have to speak
with... superior, but I think we can work something out.”
PRIOR TO ARRIVING IN KIEV, I had called Svetlana - the
Ukrainian hooker I had met in Bulgaria - and asked her if she wanted to get
together while I was in the city. When I got back to the hotel she was
waiting for me in the bar, sitting prim and proper on a bar stool, looking
statuesque and perfect. She saw me and smiled.
I looked her over from head to toe as I approached, and in my best
Borat imitation I said, “Nice, nice, very nice, how much?” Before I realized
what I’d done her eyes filled with tears; I couldn’t have hurt her worse if I
had kneecapped her with a .45. I immediately grabbed her hand, “No, no,
no,” I pled, “I didn’t mean it like that... It was supposed to be funny.” I
explained about the movie, which she hadn’t seen, but she did know who
the comedian Sasha Baron Cohen was. “It was stupid. I wasn’t thinking, I
don’t think of you like that.”
“It’s just...” she sniffled and wiped the tears off her face, “You’re
always going to think of me like that.”
That wasn’t true - I genuinely liked this girl and didn’t care what she
had to do to survive. It was a hard country. I felt like a real shit. People
were staring and it was obvious I had fucked up; just when I thought I’d
ruined our night Svetlana looked up at me and said, “Buy me dinner,
Efraim,” and she gave me this really great toothy smile.
We ate Norwegian salmon and drank Russian vodka in the hotel’s
restaurant. Svetlana told me about the classes she was taking at the
University, and she complained about her roommate. We flirted and laughed
all through dinner. “No boyfriend?” I asked, and she reluctantly admitted
there was someone. “Does he know where you are tonight?”
“No,” she grinned. “He works on an oil rig... He is gone for month,
two month.” She sipped her water and said, “He doesn’t know about me...
Or you.”
After dessert we went to my room, undressed one another and burned
off some calories underneath the sheets. I woke up early the next morning
as Svetlana was dressing to leave. “Where you going?”
“I have classes today,” she said, slipping into her bra. I remember
glancing at my wallet on a heap of clothes in the chair near the bed; she
caught my eye and snapped, “Don’t!”
“I wasn’t...”
“I have money,” she said, zipping up her skirt. “I’m not prostitute in
Kiev.”
“I wasn’t gonna offer, I swear.”
She grinned at me, kissed me on the forehead and said, “Thank you for
last night,” and left. We emailed a few times after that, but I never saw her
again.
CHAPTER TWENTY-FOUR
 FREE PRESS
“A lie gets halfway around the world before the truth has a chance to get its pants on.” - Sir Winston
Churchill

AEY, INC. HAD BEEN HAVING ISSUES with shipping as a result of

Silk Way Airlines’ effective monopoly on Azerbaijani airspace. The
company was making it virtually impossible for other cargo carriers to fly
over Azerbaijan, thereby forcing almost all airfreight coming into
Afghanistan to be flown by Silk Way’s aircraft at outrageous fees. It was a
shake down.
I had resisted using them for precisely that reason. It wasn’t just the
money; it was the fact that they were forcing me to use them. Doudnick was
constantly pleading, “Efraim, call Mustafa with Silk Way... Please!”
“Fuck them!” I would yell back. “I’m not contributing to their
bullshit!”
But eventually shipping delays were causing us so many problems I
didn’t have a choice. On March of 2008, I flew to Turkey to meet with
Mustafa Azimov, the director of Silk Way Airlines based in Baku,
Azerbaijan.
We met for drinks in the lobby of the Four Seasons Hotel in Istanbul,
and I immediately started whittling away at Silk Way’s prices. That’s when
I got the call from Eric Schmitt, with the New York Times. He told me the
Department of Defense had suspended AEY, Inc. from bidding on further
contracts because of the fraud allegations regarding the Afghan contract.
At first I thought he was fucking with me. I couldn’t believe it. I called
my office to confirm - and it was true. It was devastating... I felt like my life
was over, everything I had was in this company. It was my life. Still, in the
torturous months that followed, the indomitably optimistic part of me
believed that it was all due to some misunderstanding, and I’d be able to
clear up.
 I BOARDED THE NEXT AVAILABLE FLIGHT to the states on
March 27TH, 2008 - which had a stop at Dulles Airport in Washington, DC
before heading to Miami. I was sitting in business class next to this chesty
brunette. She was a staffer for some DC senator, a typical Washington
assistant type: prim and proper, but attractive in a hot librarian sort of way. I
was about to chat her up, put on the charm, when I noticed she was reading
an article in the New York Times - ‘Supplier Under Scrutiny on Aging Arms
for Afghans.’ I remember feeling a sense of total despair wash over me. I
was devastated about the suspension and terrified about what lay ahead. If
I’m going to be completely honest, I was also a tad star-struck by seeing my
name in the media.
It was a completely slanted article on my fledgling company and its
procurement of munitions from the old communist bloc. The Times twisted
the facts to make it sound like 100 percent of the ammunition purchased by
AEY, Inc. was 40-years-old, corroded, unreliable, and obsolete, and
delivered in decomposing packaging. That I worked exclusively with illegal
arms traffickers and corrupt public officials to purchase tens of millions of
rifle and machinegun cartridges manufactured in China - a possible
violation of United States law.
The New York Times accused me of misleading the Army as to the
origins of its products, which I had truthfully purchased precisely where I
had told Rock Island AEY, Inc. would be procuring the goods. They
discussed the current investigations into AEY, Inc. and my personal
interactions with the police and my arrests.
They questioned how a 21-year-old with a staff of 20-somethings
could land so much vital government work - more than a third of a billion
dollars at that time.
The Times quoted half a dozen military officers that - at the time - had
gladly signed off on DD250 Material Inspection and Receiving Reports for
numerous deliveries under AEY contracts, but were now suddenly
unsatisfied with AEY, Inc.’s performance and the quality of the ammunition
and the products it had provided. But they didn’t offer an explanation as to
why they kept ordering the hardware, equipment, and ammunitions.
Amazingly, not one person stated that the ammunition didn’t work -
not one! The whole article was based on one shipment of heavily tarnished,
but technically serviceable and thus compliant ammunition, which I was
voluntarily in the process of replacing.
 When the DC aid turned to the second page she saw my DUI mug shot
staring back at her. “Ohmigod,” she asked half horrified, half amused. “Is
that you?”
“Yeah,” I sighed. “That was a rough night.”
THE FOLLOWING DAY in Miami, I received an email from Robert
Kittel, an official with the U.S. Army’s Suspension and Debarment Office,
who officially notified me that AEY, Inc. had been suspended by the
Department of Defense:
You are hereby suspended from future contracting with any agency in
the executive branch... under Section 9.407 of Federal Acquisition
Regulation... Suspension is a temporary measure... status will continue
until I terminate or until you are proposed for debarment.
However, they hadn’t suspended deliveries on existing contracts,
which included the Afghanistan contract. So I said, “Fuck it!” and kept on
shipping ammunition.
Keep in mind, AEY, Inc. still had multiple multi-million dollar Iraq
orders to fill: 25 million 7.62 rounds for nearly $2.9 million, nearly 4,000
AK-47 assault rifles, roughly 500 light machine guns, over 50 60 mm
mortar base plates with tripods, 60 sniper rifles with scopes, almost 50 sight
unit (M64 series) and military accessories for almost $1.2 million, 30,100
AK-47 assault rifles, over 800 DShK machine guns, almost 50 sniper rifles,
and over a dozen small arms tool kits and laser sights for $4.7 million, and
39 million 5.56 rounds for roughly $12.3 million.
AFTER READING THE NEW YORK TIMES article, Heinrich was
furious. There were excerpts of my conversation with Trebicka, saying
things like, “What goes on in the Albanian Ministry of Defense? Who’s
clean? Who’s dirty? Don’t want to know about it,” and “Pinari needs a guy
like Henri [Heinrich] in the middle to take care of him and his buddies,
which is none of my business. I don’t want to know about that business. I
want to know about legitimate business.” Heinrich had a real thing about
anonymity and he felt I had jeopardized that.
“You never should have mentioned my name Efraim. Don’t ever use
my name.”
“How was I supposed to know the fucking guy [Trebicka] was
recording me,” I snapped back. “Keep in mind it was your fuckup, not
mine, that got me into this position in the first place.”
 “Don’t use my name or Pinari’s name again... or we’ll have a
problem.” Now, I’m not saying it was a real threat, but I didn’t like the way
that sounded. People have disappeared or had “accidents” for much less.
IN EARLY APRIL, JLM AVIATION, the freight company I’d hired to
fly 25 million rounds of 7.62 out of the Czech Republic into Baghdad, was
quickly approaching the deadline set by the Army for delivery, and they
hadn’t received the flight permits yet.
I called the JLM’s director. “What do you mean you haven’t got ‘em
yet?”
“We’re working on it... these things take time.”
“Well you’re gonna have to fly without them.” Sometimes freight
carriers would actually fly over countries without obtaining the flight
permit, depending on the country. But JLM refused. I called the contracting
officer I was dealing with in Iraq - a guy I had been really friendly with -
and asked him for an extension. “I just need a couple’a weeks...”
“Absolutely not,” said the Army rep. “You have ten days.”
I had a legitimate claim for an extension, but after the New York Times’
article the Army was looking for an excuse to suspend AEY, Inc.’s contract,
and raising the bar. I begged and pleaded: “Everyone gets extensions for
flight permits... You know that.”
“Not you, Diveroli. Not anymore,” said the contracting officer.
A couple of days before the contract deadline, JLM got the permit, and
I really thought we were going to make it. Then we found out that the
Czech Republic’s Pardubice Airport was closed for maintenance for a week.
I couldn’t fucking believe it! AEY, Inc. missed the contractual deadline by a
couple of days and the Army didn’t want to hear any excuses. They used
the missed deadline to cancel the contract - all of my remaining contracts,
simultaneously.
ON APRIL 16TH OF 2008, the Army’s Suspension and Debarment
Office sent me a Show Cause letter asking AEY, Inc. to dispute suspension.
In a response submitted by my attorney, Claude Goddard, we argued that
the contract should be reinstated:
AEY Accurately Represented the Source of Chinese-Manufactured
Ammunition. A substantial amount of ammunition delivered under Task
Order 2 was originally manufactured in China in the early 1960s. This
ammunition was provided by China to the government of Albania in the
early 1960s, and... sold by the Ministry of Defense of Albania, MEICO
Military Export and Import Company (MEICO), to AEY. The sale and
purchase of this ammunition involved AEY, and MEICO. No Communist
Chinese Military Company or any other PRC entity or person was involved
in the transaction, directly or indirectly, and no funds were remitted to any
such Communist Chinese entity or person.
[T]he point of origin for all such ammunition was appropriately shown
as Albania, and appropriate export licenses were obtained from the
Albanian government. The CoC form does not require the identification of
either the original manufacturer of the ammunition or its place of
manufacture. The CoCs do have a line entry for “Manufacturer (point of
origin).” This line entry, however, requests information related to the
originating shipping point (point of origin) of the ammunition. The same
information shown in this entry is used in preparation of End User
Certificates (EUCs) and directly corresponds to the Delivery Verification
Certificate (DVC) issued by the U.S. Army Sustainment Command; Rock
Island… the CoCs for the Albanian shipments accurately reflected the point
of origin for the Chinese-manufactured ammunition as Albania.
AEY Did Not Violate DFARS 252.225-7707... “Prohibition on
Acquisition of United States Munitions List Items from Communist
Chinese Military Companies.” ... the purpose of the regulation is to prohibit
DoD from acquiring munitions items “through a contract or subcontract
with a Communist Chinese military company.”... AEY, [acquired the
Chinese-manufactured ammunition] through a contract with MEICO of
Albania. The ammunition was originally manufactured in China and was
furnished to the Government of Albania in the early 1960s about 40 years
before the provision of DFARS 252.225-7007 came into effect.
AEY, Inc. had not committed fraud by stating the shipments “point of
origin” was Albania, and the Army had no evidence that AEY, Inc. had
purchased the Chinese ammunition “directly or indirectly, from a
Communist Chinese Military Company” or that it had been acquired
“through a contract or subcontract with a Communist Chinese Military
Company.” Unfortunately my attorney didn’t offer to have the issue
resolved by allowing AEY, Inc. to simply replace the “nonconforming”
Chinese ammo with conforming ammunition, just in case they disagreed
with our argument - that’s what screwed me. Making the argument would
have made it nearly impossible for the Army to move forward with the
termination of my contract based on breach when AEY, Inc. was offering to
remedy the breach at no cost. Besides, the Army couldn’t actually have
allowed AEY, Inc. to replace the ammunition, because they had already
used it, despite their knowledge of its origin!
I WAS DOING EVERYTHING I COULD DO to quell the avalanche
of problems coming down on me because of the suspension - contacting
suppliers and manufacturers to hold product and extend deadlines.
IN LATE APRIL of 2008, Dejan and I boarded a plane to Kuala
Lumpur’s Malaysia Defense Service Asian Exhibition & Conference.
Malaysia is in Southeast Asia, and the whole coastal country is covered by
dense tropical rain forests - I’d never seen anyplace that green. The capital
is a combination of bamboo huts and modern skyscrapers, heavily
populated by Malays and Chinese.
The Malaysia Defense Service Asian Exhibition and Conference was
the Asian equivalent of Paris’ Eurosatory defense show. There were
suppliers, manufacturers and distributors from Europe to Africa, displaying
standard military products to the latest high-tech surveillance gadgets.
Beautiful Malaysian waitresses were walking around in skimpy sarong
skirts and jackets, serving meat and fish skewers of satay.
We met up with Georgi at Arcus’ booth; they had inert samples of
GP25 and GP30 grenades along with OG-7V fragmentation grenades and
82 mm mortars. I told Georgi that I appreciated him and his father working
with me, and that my attorney would have everything worked out within a
few days. “A week tops,” I said. “That Times article has everyone covering
their asses, but that’s not enough to cancel the contract.” Especially, when
there was no legal basis to do so.
“Efraim, Arcus and AEY, Inc. are partners, but you and I are friends,”
he said. “I’m praying for you... my father’s praying for you.” Damn right
they were praying for me. AEY, Inc. was purchasing roughly $5 million a
month in munitions from Arcus, and looking to do more. They had a vested
interest in my survival. Their warehouse was packed with GP30 grenades
and 7.62 rounds AEY, Inc. had bought and ready to ship. “We are friends.”
Within weeks my good friends at Arcus would begin making excuses
to return my multiple multimillion-dollar deposits.
That night Dejan and I were drinking at a Hookah bar near our hotel,
when two Malaysian women approached us. Rosie Something was five
foot, six inches and 120 pounds with dark Asian features and a tight little
body. I glanced sideways at Dejan and hissed, “Dibs.” Her friend looked
good, but in comparison to Rosie she was a dog. They both spoke English.
We sipped Singapore slings, just like in the movie Fear and Loathing, and I
found out Rosie was college educated and worked as a senior financial
advisor at a local bank.
We danced for a couple hours and by the end of the night we ended up
in my hotel room raiding the mini bar. Rosie and I were making out on the
bed while Dejan and his girl were screwing around on the couch. Things
were heating up and I whispered, “Let’s get rid of them.”
“What,” she said, unbuttoning my shirt, “you’ve never had sex in front
of your friend before?” She climbed on top of me, pulled her top off and
unbuttoned her bra. I quickly finished unbuttoning my shirt while Rosie slid
out of her skirt and panties.
A minute later when Dejan turned to see what all the heavy breathing
was about; Rosie was rhythmically riding me and moaning something in
Bahasa Malaysian. She had beautiful bronze skin and perfect petite breasts.
“That’s crazy, Efraim,” laughed Dejan. “Crazy.”
Over the next couple of days Rosie and I hung out with each other on
and off while I tried to put together a deal with SME Ordinance. I wanted to
import 5.56 and 7.62 NATO rounds for the U.S. commercial market. The
deal never came together, but Rosie was worth the trip.
The day we were supposed to leave for Jordan, I called my aunt Julie
and told her I was extending my trip three days.
“But... you have meetings,” she said.
“Push ‘em back. I’m in the middle of something here.” I couldn’t pull
myself away. After I left, Rosie and I emailed for a while, but it faded out.
WHEN DEJAN AND I EVENTUALLY GOT TO AMMAN, THE
CAPITAL OF JORDAN, we met with Aref Rteameh, a Senator with the
National Assembly, who owned JLM Aviation - the airfreight company that
got AEY, Inc.’s Iraq contracts cancelled. Jordan is an Arab kingdom on the
East Bank in the heart of the Middle East. We could see Israel from the
restaurant where we met Aref - one of those glass and aluminum
monstrosities at the airport. Microwave TV dinners and cheap Champagne.
I needed Aref to refund the payment AEY, Inc. had made to his
company. “You missed the deadline and they cancelled my contract... It’s
pretty simple.”
“Yes, yes, but we’re ready to deliver now,” he said with an air of
superiority, as if that made everything better.
 “It’s too late for that,” I growled. “The Army cancelled the contract,
Aref... I need my money back.”
“Yes, I called a... contact in Iraq, with the U.S. Army, he said he could
help, if it were not for the political pressure on your company,” Aref sighed.
“You need to call the Army, speak to whoever you deal with... have them let
you complete the contract,” he rubbed his index finger and thumb together
in the universal sign of money. “I’m sure you know who to call,” he said,
and gave me a wink.
“This is the United States Government; it doesn’t work like that in the
states.”
Aref laughed - not a forced laugh, but an uncontrollable, gut-
wrenching laugh. “Oh Mister Diveroli, trust me, America is as corrupt a
government as anyplace on the planet... they just package it better. I’ve
been dealing with contract officers in Iraq and U.S. officials for over four
years now. It’s all corrupt.” I remember thinking, this isn’t Jordan jackass,
and the U.S. plays it straight. What a fool I was.
“Well, not the people I deal with.” Aref never did give my deposit
back, and I eventually was forced to sue him and his U.S. agent - the
litigation is still pending.
WE GOT TO BUDAPEST on May 23rd of 2008. We met with Igor
Something Russian, one of the partners in Somoskoi at a sushi bar around
the corner from our hotel. “Everything is going to be okay. My attorney’s
got it under control.”
He nodded his understanding and shoved a rice and tuna roll in his
mouth. “You have to get dis contract back.”
“I’m working on it,” I said. Somoskoi, through their contact, the
Hungarian Air Force Colonel, had a military depot filled with S-5 and S-8
rockets, 82 mm and 120 mm mortars waiting to be shipped to Afghanistan.
“But if it doesn’t happen I’m gonna need AEY, Inc.’s deposit back.”
Igor didn’t even acknowledge the request. “You must get dis contract
back... Very important.”
It was my understanding that he and the other partners of Somoskoi
were getting the Hungarian munitions for next to nothing; therefore what
AEY, Inc. was paying for them was mostly profit, and I could see the greed
in his eyes. I knew the feeling, and I knew he couldn’t bring himself to even
think about the possibility of it not happening. He wouldn’t even
acknowledge that the contract might not get reinstated. “Just hold ‘em for
me, Igor... I’ll know something in a couple’a days.”
When I got back to the hotel, I opened my computer... and there it was,
an email from Kim Jones notifying me that the Army was terminating the
Afghan contract.
This letter constitutes the final decision of the Contracting Officer
regarding the Termination for Default of Contract W52P1J-07-D-0004...
failure to deliver items in conformance with the terms and conditions of the
contract... Prohibition on Acquisition of United States Munitions List Items
from Communist Chinese Military Companies is not excusable.
Not that I had expected anything less, but I was still shocked by the
finality of it. I genuinely felt I hadn’t done anything wrong, and what little I
might have done, certainly, wasn’t done maliciously.
MY FLIGHT ARRIVED IN MIAMI around 2:00 am. I’d had half a
dozen mini-vodkas on the plane coupled with some Ambien, and a huge
joint the minute I got in the car. I could barely get my keys in the front door.
I dropped my luggage at the door and climbed into bed with Jenna.
She rolled toward me and whispered, “I’m moving in with Elyse [one of
Jenna’s friends]; it’s not working anymore... we need a break.” She still
wanted to date, but she just couldn’t live with me.
I immediately felt sick to my stomach. It might have been the alcohol
and weed, but I have my doubts. Jenna had been complaining for months
about my hours, the travelling, and the drugs. She wanted me to be the same
shaggy-haired stoner kid she had fallen in love with, making a couple
million a year working out of her apartment. But things had changed. She
needed me to be around more, and I couldn’t be that guy - not anymore.
Things had gotten way too complicated. I was in over my head and
struggling to keep it all together.
She packed up all her stuff the following morning, and when I got
home she was gone. I was sick about it. Jenna was the only person I had
ever truly been in love with. I was losing her and there was nothing I could
do to stop it.
A COUPLE WEEKS AFTER JENNA MOVED OUT, I was at the
office, and I had been a little depressed about her leaving. We were still
dating - the serial breakups never seemed to end - but this time felt
different. I think she was even dating other people by this point; not that I
had ever stopped. But it still bothered me.
 To cheer me up, Boz Kramer, one of my salesmen asked if I wanted to
go out with him and his girlfriend - this knockout from Belarus. “She’s got
a friend; we want you to meet... a Russian chick, here on a student visa.”
I learned back and raised my brow, “Well?”
“She’s hot.”
WE ALL MET AT CLUB MANSION around ten o’clock, and Boz
was right, she was “hot.” Julia Amasova was from Itzcheusk, Russia, the
city where Russia’s AK-47 assault rifles are manufactured. She was five
foot eight inches and 125 pounds with golden blonde hair, snow-white skin
and the slightly Asian features of a Northern Russian. The club was a
madhouse; packed with loud music and silver-spoon party kids, dancing to
Paul Van Dyk and Ferry Corsten.
When Boz introduced me to Julia, she said, with a very sexy Russian
accent, “I’m from Kalashnikov’s city.” The chemistry between us was
instantaneous, and I knew she was coming home with me that night. I
started buying rounds of vodka tonic and tequila for the four of us, and she
could really put it down. “You want something stronger?” I asked. “Do you
party?”
Her face lit up, “You have any coke?”
We did several lines in the restroom and had a few more shots at the
bar. We were dancing and Julia yelled over Armin Van Buuren’s Burn with
Desire blaring, “Boz says you’re an arms dealer...” and unlike Jenna, Julia
thought, “That is so cool.”
Our faces were only inches apart and the sexual tension was so
obvious I said, “I want to kiss you.”
“So kiss me.” I melted into her soft sweet lips, right on the hardwood
floor, surrounded by dozens of thrashing dancers.
“Let’s get outta here,” I said, and 15 minutes later we were in my
apartment’s living room, frantically pulling each other’s clothes off;
yanking at zippers and popping buttons in an alcohol and cocaine charged
sexual frenzy. We fell onto the couch did it right there - couldn’t even make
it to the bedroom.
By the time the sun came up Julia had established that she could out-
snort me, out-drink me, and out-fuck me. I liked her, but I didn’t like like
her, if that makes sense.
IT TURNED OUT JULIA had paid $10,000 for a sham marriage to a
Cuban guy. We were in her apartment when she told me about it. “I have
papers... I’m a U.S. citizen,” she said proudly. Julia worked at a name-brand
clothing store on South Beach, and the whole sham marriage thing had been
arranged by her Lebanese boss. “Very real... Immigration is no fool; you
have to know what you’re doing. I had a wedding and everything.”
“No way,” I laughed. Okay, I liked this girl more and more by the
minute.
She pulled out a photo album and started pointing to her wedding
photos, “Dis is the church and... dis is the husband,” she pointed to an
unattractive dark-haired guy in a black tuxedo. Everyone was smiling and
laughing - at Immigration I guessed. “We are very much in love, Efraim...
We’ve never had sex and he lives in North Carolina,” Julia laughed. “Dis is
perfect marriage for me.”
WHEN MY MOTHER FOUND OUT I was dating Julia I got “the
call” I was dreading. “Why Efraim!? Why!?” she cried. “Why!? The
Chinese whore wasn’t enough, you had to go out and get a Russian one...
Why can’t you just find a nice Jewish girl?”
“Mom, I’m not getting married, I’m just dating her,” I said. As much
as I laughed off my mother’s disappointment, it sometimes got to be too
much. By this point even I knew I was a borderline hard-core semi-
functioning alcoholic and drug addict. “Let’s be honest here, mom, what
nice Jewish girl is gonna date me... I’m probably going to prison! Besides,
nice Jewish girls don’t do the kinda things I’m interested in - for sure, not
before marriage.”
“So you’re looking for whores? You date whores?” Occasionally.
WHEN JENNA FOUND OUT ABOUT THE RUSSIAN, she wanted
to get back together immediately - started sleeping over almost every night
and calling all the time. I was sleeping with both of them, but Jenna
eventually said, “Julia’s gotta go.”
I guess I didn’t realize how much Julia liked me, because she didn’t
take it well. She cried and cried, started coming by the office and calling all
the time. As a result Jenna started questioning, “Have you even told her it’s
over?” I finally had to put Julia on speakerphone so Jenna could hear the
conversation.
“What did I do, Efraim?” cried Julia out of the speaker, “I thought you
had a good time with me... liked me.” It was a horrible conversation.
“It’s not you, Julia. I do like you, but I got back together with my
girlfriend...” I remember Jenna giving me this look that said you need to be
a little more specific. “And I love her very much... I just can’t see you
anymore. I’m sorry.”
That satisfied Jenna, but Julia wasn’t taking no for an answer. She was
always in the wings waiting for me, and we never stopped sleeping
together. Hotel rooms, my office or her apartment; this chick was hooked on
me like I was hooked on Jenna.
CHAPTER TWENTY-FIVE
 THE TICKING
“History suggests that capitalism is a necessary condition for political freedom.” - Milton Friedman

AFTER THE NEW YORK TIMES ARTICLE, Chairman Henry A.

Waxman (D-CA) initiated an investigation by the Congressional Committee
on Oversight and Government Reform into AEY, Inc. I received multiple
subpoenas for all of my records, and everyone I knew was being
interviewed by the Assistant U.S. Attorneys’ Office and the DCIS and ICE
agents assigned to my case. Virtually everyone was cooperating against me:
my childhood friends - now employees - with the exception of my
Operations Manager, Ronald Ledain Didier... he was the last one to jump
ship and even then he didn’t try to sink me.
SHAPIRO SPOKE WITH THE ASSISTANT U.S. ATTORNEY,
Eloisa Fernandez, who laid out the government’s case for him. “They
admitted purchasing the Chinese ammunition wasn’t a crime, but merely a
breach of your Army contract,” said Shapiro, “however they feel
misrepresenting and concealing the origins of the manufacturer on the
COCs (Certificate of Conformance) was a crime.”
“Are you fucking with me?” I snapped, when he told me that.
“Concealing the fact that I wasn’t committing a crime, makes it a crime?”
“Exactly,” responded Shapiro. “Essentially, they’re manufacturing a
case against you... Packouz, Podrizki, and half a dozen of your ex-
employees are willing to testify that you instructed them to conceal the fact
that the ammo was Chinese, and that you intentionally made false
statements on the COC (Certificate of Conformance) forms in order to get
the Army to pay you monies for which you weren’t entitled.”
“That’s total bullshit! Besides, buying it wasn’t illegal!”
“Yes, but the government’s position is that the ammo falls under the
prohibition, therefore your attempts to conceal the origin of the ammo and
your misrepresentation on the COC forms amounts to fraud and material
false statements... therefore you misled the government.”
 The government was twisting the conspiracy statutes to make what I
had done meet the definition of conspiracy. I had once heard one of my
Eastern European contacts say, the old Soviet Union’s Committee on State
Security’s (the KGB) policy was, give me a crime and I’ll fit it with a man;
it seemed the United States’ Department of Justice’s policy was, give me a
man and I’ll fit him with a crime. “It’s like they’re making it up as they go
along.”
“It’s the government, Efraim... they do that, that’s how they win
ninety-eight percent of the time. It’s not by accident. Trust me.”
My mother had been hounding me about hiring this hotshot attorney
Howard Srebnick with Black, Srebnick, Kornspan, and Stumpf. Apparently,
Srebnick had gotten off a jeweler that went to our - my mother’s -
synagogue on money laundering charges. “What about bringing in a big gun
like Srebnick or Black?” Roy Black runs a world-renowned federal criminal
defense law firm out of downtown Miami.
“At this point,” said Shapiro, “it might be a good idea. Black’s law
firm... if anyone can stop this, it’s them.”
SHAPIRO WORKED OUT THE DETAILS, made a couple of calls to
Srebnick - they were friends - and set up a couple meetings. I met Howard
Srebnick at the downtown Miami offices of Black, Srebnick, Kornspan, and
Stumpf. We were in the conference room. It was small but elegant, in an
old-world European sort of way: rustic leather and dark wood, with a view
of the city. Srebnick was in his early 40s, good-looking with brown shaggy
hair, tall, slender, and cocky - the typical GQ type lawyer you see on Law &
Order.
Shapiro said, “We’re hoping to head off the indictment or get it
dismissed, if it comes.”
“There’s not much here,” agreed Srebnick. “I think it’s possible we can
put the brakes on this.” I later heard this was a common tactic they used, as
since then I’ve met several ex-clients of Black’s law firm, and it seems we
all got the same spiel. They suggest the client’s case is trial-worthy and
winnable, saying something like, “I definitely think we can stop it from
happening” - whether they actually believe that or not, who knows? Then
they get the big upfront non-refundable retainer money. “We’re each going
to need a two hundred and fifty thousand dollar pre-indictment fee, so we
can get to work on stopping this thing... But if you are indicted - we’ll need
an additional fee for trial.”
 “Just so we’re clear here,” I said. “I haven’t done anything illegal...
and if I’m indicted I’m going to trial?”
“Hopefully it won’t come to that,” said Srebnick. “Even if you’re
indicted I believe we can squash this with a motion to dismiss.”
I hired them in May of 2008 for $250,000. Apparently, I got off easy -
one guy I’ve met since then said he paid them $13 million, another paid
over a million, and yet another forked out over $300,000 pre-indictment and
was quickly dropped by the firm once the government froze his assets and
he no longer could afford subsequent payments. All of them received
lengthy prison sentences between 13 and 25 years. Shapiro sat there like a
bobble-head doll nodding the whole time.
Srebnick drafted a “white paper” letter, which is essentially a last ditch
effort to convince the government not to indict for one reason or another…
or a roadmap to an indictment and a heads-up to the government about what
our defenses will be, so they could do their very best to get around them,
depending on how you look at it. They spelled out AEY, Inc.’s position
regarding the facts. Mainly that AEY, INC.’s actions and mine didn’t
actually violate any federal law; therefore any indictment would be a
fruitless waste of government judicial time and resources.
THE U.S. ATTORNEY CONVENED A FEDERAL GRAND JURY in
early June of 2008 and started subpoenaing my employees and family
members to testify: Daniel Doudnick, Levey Meyer, Ronald Ledain Didier,
my aunt Julie Diveroli, and my father Michael Diveroli. The funny thing is,
they only questioned my father to get him on record saying he had nothing
to do with AEY, Inc.; essentially they wanted to clear him of any
involvement. The U.S. Attorney’s fear was that some parents get on the
stand during their children’s trials and say, “It was all me,” swearing their
child had done nothing wrong - trying to spare their children prison time.
Well, the U.S. Attorney had nothing to worry about; my father and I
didn’t have that type of relationship, besides he wasn’t the type of guy to
fall on his sword - for me, or anyone.
IN LATE JUNE, Srebnick and Shapiro contacted the Assistant U.S.
Attorney and got her to agree that if I was indicted, the U.S. Attorney’s
Office would allow me to self-surrender - you can’t trust the government.
ON JUNE 19TH OF 2008, I was leaving Shapiro’s office, talking on my
cell phone ordering sushi for Jenna and me; I climbed into my Benz and hit
the ignition button. The engine purred to life, and that’s when I heard the
screeching tires of several black SUV’s skidding to a stop behind my car. I
spun around to see a dozen DCIS and ICE agents approaching - weapons
raised high. As stunned as I was to see them, I remember immediately
identifying the weapons they were pointing at me - they had Steyr AUG
automatic rifles, and H&K MP-5 and UMP sub-machine guns - nice pieces.
“Outta the vehicle! Get outta the vehicle!” screamed one of the agents
pointing a full-size H&K .40 cal USP pistol. “Put your hands on your
head!”
I was yanked out of my sedan, handcuffed, and asked if I had any
weapons. “No sir,” I replied.
The agents told me, “You’re under arrest, Mister Diveroli; we’re
taking you to the Hotel” - which is what they call the Federal Detention
Center in Miami.
I remember saying, “Okay so... I won’t be having sushi tonight, is that
it?”
“Yeah,” he laughed, “no sushi for you tonight.”
I later found out that Ralph Merrill, Alex Podrizki, David Packouz,
and AEY, Inc. had been indicted that morning as well. Packouz had told the
Assistant U.S. Attorney on my case that I always had a weapon and that I
planned to flee the country if I was indicted - that’s why they came in hard
and fast.
I WAS TAKEN TO THE FEDERAL DETENTION CENTER in
Miami, fingerprinted and photographed. I swapped out my Versace jeans
and Burberry shirt and suit jacket for a pair of jailhouse khaki pants and a
tan shirt. They handcuffed me to a steel loop on the bench I was sitting on.
While I was waiting to be brought to my cell, I read the inmate handbook -
which was more like a pamphlet - and it said that you were allowed to
smoke in the unit’s recreation areas. It had been three hours since I’d had a
cigarette, and I asked this overweight female correctional officer with a bad
wig and a gold canine, “How long till they move me upstairs? I really need
a cigarette.”
She saw me holding the handbook and snickered, “Shit, we stopped
allowing the inmates to smoke years ago, they just ain’t never changed the
handbook.” She smiled and that’s when I noticed the gold tooth. “You ain’t
gonna have another cigarette for a long time sugar.”
I spent that night in the SHU (Special Housing Unit) - ”Special” is
code for solitary confinement - going through nicotine, alcohol, and cocaine
withdrawals.
THE FOLLOWING MORNING, I was walked into court for my bond
hearing, wearing my rumpled prison garbs, a pair of handcuffs and ankle
shackles. Shapiro and Srebnick were waiting for me at the defense table.
Packouz and Podrizki were already in the courtroom, wearing suits; they
were given a signature bond because they were cooperating with the
government against me.
Srebnick leaned into me and said, “We worked out your bond with the
Assistant U.S. Attorney...” I had to surrender my passport and agree not to
leave the Southern District of Florida. Not a problem. Because I had told
my probation officer I was taking medication for depression and they knew
about my DUI, I was ordered to see a court appointed psychiatrist for
mental health and substance abuse counseling. Not a problem. “They’re
going to recommend an individual bond of one million for you and another
one million dollar corporate bond... for AEY, Inc.”
“Fuck,” I grumbled. “Two million dollars?”
“It’s that or you stay in the detention center.” I remember turning
around and seeing my father in the gallery, looking embarrassed and
uncomfortable. He hadn’t even wanted to come, but my mother - his ex-
wife - was in Israel visiting family and working with this charity she raises
money for, Jewish orphans or something. She couldn’t get back in time, so
she badgered him into being there, telling my dad that one of them needed
to be there for me. I wished it had been her. I would have done anything at
that moment to see her face. “You’re already out on state bond for the
DUI...” griped Srebnick. “It’s the best we could do.”
“I’ll pay it, just get me outta here.” I needed a cigarette and a shot of...
anything.
The judge looked down from the bench and said, “I’ll go along with
the bond conditions.” He slammed his gavel on the bench and I was
released a few hours later.
Marko Cerenko, an attorney I had hired as corporate counsel, picked
me up. Cerenko was in his late 20s, tall and athletic. I met him through my
cousin Joe. He wasn’t exactly a slick talker or a hustler, but he seemed
sharp enough and he worked relatively cheap. The best thing I can say
about him is he had a really great head of hair.
Cerenko showed up at the Federal Courthouse with a suit for me to
change into because there was press outside. I wanted out of there so bad I
said, “Fuck the suit,” and walked out of the Courthouse in my prison issue
Khakis.
There were several reporters standing around the front doors of the
courthouse waiting for us, and they started screaming, “Mister Diveroli!
Mister Diveroli, can we get a comment?” and “Just one question!”
“No comment,” said Cerenko. “No comment.” We pushed through
them and jumped into Cerenko’s Black Range Rover. He drove me home to
Jenna. She had her own apartment, but was still spending most nights at my
place. We spent the night eating sushi and talking about what the future
held. I still believed I hadn’t committed a federal crime, but the possibilities
weren’t looking good.
THE NEXT MORNING, Cerenko drove me to meet Shapiro and
Srebnick at the Intercontinental Hotel - next-door to the offices of Black,
Srebnick, Kornspan and Stumpf. They said, “This is beatable,” and “The
government doesn’t have a strong case here. If we need to go to trial, we
have plenty to argue to a jury, but that shouldn’t even be necessary... we can
get this thing dismissed.”
After we finished eating, we went up to Srebnick’s office and met with
Roy Black. He was a thin distinguished lawyer type in his early 60s, with
glasses and grey brownish hair. I’ll never forget when Black walked in and
said, “If you’re looking to negotiate a plea... you’ve got the wrong law firm,
we’re trial attorneys.” He took a seat at the cramped conference table and
looked me straight in the face, “We beat the government.” And then they
asked for $800,000 and over $1 million if we needed to proceed to trial.
“That’s uh... That’s a pretty big fee.”
“Well there’s going to be a lot of media attention on this case and
obviously the U.S. Attorney for the Southern District, Alexander Acosta,
has shown an interest... As a matter of fact,” said Black, “we may need to
move for a change of venue; Acosta’s already trying to taint the potential
jury pool in Miami. He said you put the troops in harm’s way in his press
release.” He showed it to me:
Defense contractors are responsible for the effectiveness and safety of
munitions they provide to our troops and allies. When these contractors
intentionally cut corners to line their own pockets, they risk the safety and
lives of our men and women in uniform. Such callousness and disregard for
the lives of our soldiers and our allies will not be tolerated, and will be
vigorously prosecuted.
 “Clearly,” said Black, “that’s not true, as it is beyond dispute that all
the ammunition in question works.”
“Absolutely,” I said, “there hasn’t been one report of a Chinese
manufactured round not going off... Not one.” God knows the Army
couldn’t get enough of them.
Before Black walked out of the meeting he said, “I’ll be working
closely with Shapiro and Srebnick on this... We still believe we’ll be able to
get the indictment dismissed.” I never saw him again, and I have my doubts
whether he ever worked one second on my case.
ON THE WAY HOME I called my mother and complained about the
attorneys’ fee. She begged me to hire them, saying, “Rabbi Lipskar and
everybody in the [Jewish] community says they’re the best.” She said,
“Don’t play with your freedom.”
“These attorneys from the community want nearly two million dollars
ma!”
“They got Raffie Aduth (the jeweler from the Bal Harbour Shul) off.
Pay ‘em for God sake; this is your life!” I hired them the following day and
wired the $1,550,000. Shapiro got $600,000, Srebnick got $800,000 and
they brought in an attorney named Richard Straffer to do the actual legal
writing work on my case; he got $150,000. I felt like I’d been scammed.
JENNA WAS WAITING AT MY APARTMENT when I got home. I
told her what the attorneys had said - that the case was winnable - and Jenna
started to cry, “I’m sure they’re right... but if they’re not, I’ll be here for you
Bear.” She hugged me. “I love you so much... We’ll get through this
together.”
She said all the right things, but they sounded like canned
disingenuous responses she had seen in a movie or something - I doubt she
realized it. Jenna had had enough - my work schedule, the search warrant,
the media attention, the arrests, the drugs... even the other women - whether
she knew about all of them or not - had taken a toll on our relationship. I
can’t blame her for distancing herself. It wasn’t cute anymore; it was just
over.
The following morning Jenna was getting dressed for work, and she
glanced at the diamond crusted Michelle watch I had bought her. “Efraim,”
she called out from the bathroom, “come look at this...” I climbed out of
bed to see what she was talking about. Her watch had frozen. Jenna looked
up at me and said, “It just stopped ticking.”
 Just like our relationship, I thought. It just stopped working... We kept
sleeping with each other for a few more weeks, but that was the moment I
knew it was over. Jenna started slowly removing her stuff until there was no
sign she had ever been there.
I started seeing Julia - the Russian girl - again, and this time when
Jenna found out, she didn’t come running back.
CHAPTER TWENTY-SIX
 THE LOONEY-BIN, INFORMANTS, AND SPIES
“Three may keep a secret, if two of them are dead.” - Benjamin Franklin

I STARTED FEELING LIKE I DIDN’T HAVE A PURPOSE in life. I

began gambling at the Hard Rock Hotel and Casino all the time. Poor Dejan
tried to stop me on dozens of occasions. He would plead with me not to go,
but I didn’t listen. I would call him almost every night about seven or eight
o’clock and say, “I’m going to the Hard Rock... you comin’?”
“No!” he would say, defiantly. “You mother fuck! You’re wasting your
money. I can’t watch you do dis anymore. I won’t go.”
“Yeah?” I would ask, feigning shock, like I hadn’t heard it all before.
“Suit yourself, I’m goin’...” Five or ten minutes later he would call back
and ask if I had left yet. “I’m walking out the door right now,” I would tell
him. “You coming?”
“Fine,” he would gripe. “I meet you there.” Dejan would stand behind
me with his arms folded like a bodyguard and wince every time I lost $500
or $1,000 on a hand. I remember one night I lost roughly $20,000 - swear to
God, I thought he was going to cry. On average I was losing between five
and ten grand a night, but I couldn’t stop. I needed the rush.
I was a high roller, my suites and drinks were comped, and I was
sleeping with two cocktail waitresses and hanging around the bar getting
wasted with Hard Rock employees after work. I was getting more and more
reckless and everyone could see it, but no one could stop it.
My mother was regularly leaving ten- and fifteen-minute messages on
my cell phone, “You’re ruining your life! You’re killing yourself...” she said
repeatedly. “You need to go to Temple! Come back to God and religion!
Don’t forget your roots...” Eventually I just stopped checking my voice
mail.
BY AUGUST OF 2008, my drug use had become all-consuming. I
was suffering from depression and mood swings, drinking, swallowing and
snorting a toxic cocktail of prescription and illegal drugs. I was spiraling
toward the abyss.
One morning I woke up in an especially dark mood. I had been out all
night partying at Studio Karaoke bar with my childhood friend, Jon Berney,
drinking shot after shot of vodka and tequila while snorting coke. I don’t
want to say I was suicidal, but I was definitely weighing my options. I knew
the thoughts I was having weren’t rational, but I also couldn’t stop having
them. So I called my aunt Julie and asked her to drive me to Mount Sinai
Hospital. They took urine at the Emergency Room, which was positive for
cocaine amongst other substances. Big surprise. An hour later, I was seen
by a female doctor. After a brief exam she asked me, “Are you thinking
about hurting yourself Mister Diveroli?” while looking over my test results.
“I’m just feeling really...” I knew enough not to use the word suicidal,
“hopeless... Life is getting to be too much.”
“Well it beats the alternative.”
“How do you know?” I sighed and glanced at her. “Seriously, are you
sure about that, doc?”
She told me they needed to admit me to the hospital overnight, “To
keep an eye on you.” Then the doctor looked at the nurse and instructed her
to give me a strong dose of Adovan. When the nurse pushed the plunger
down on the syringe - flooding my vein with Adovan - I took a long
cleansing breath and everything melted away.
“Now that feels better,” said the nurse, as I slipped into an incredibly
blissful state of semi-consciousness, “doesn’t it?”
I WOKE UP A DAY LATER strapped down, with my mother sitting
next to the bed. She told me I had tried to leave, had become belligerent and
lashed out at the staff. I didn’t remember any of it. “They Baker Acted
you,” she admitted. The Baker Act is a Florida law that allows for
involuntary commitment of an individual that is deemed to be a danger to
themselves or others. “It was probably for the best Efraim.”
She begged me to get treatment for my addiction. “Please,” she pled,
“you need help... You’re killing yourself with all the drugs and alcohol.” I
shook my head, and she took a deep breath and said, “I could have you
Marchman Acted.” The Marchman Act is the equivalent of the Baker Act
for individuals endangering themselves through substance abuse, forcing
them into long-term residential treatment as opposed to short-term
hospitalization. Based on my current forced hospitalization, I thought she
might have a chance. “I’d rather it be voluntary.”
“For how long?”
“I think a few months, maybe even six months would do you some…”
“Six months!” I snapped. “No, no, no...” We went back and forth for a
while and I got her to agree to 28 days of drug treatment at a residential
facility of my choice. The doctor at Mount Sinai discharged me on
September 5th of 2008.
A FEW DAYS LATER on September 10th of 2008, I admitted myself
to The Holistic Health Center. It was like the Ritz-Carlton of rehabs:
spacious grounds with manicured gardens. Pools, spas, and mud baths.
Massage and acupuncture. It was a 28-day program that cost me $21,000.
As nice as it was there was one problem - the staff was insisting I couldn’t
get drunk on the premises and I couldn’t leave to get high, not to mention
we were prohibited from being intimate with members of the opposite
sex… and there were some cuties there too. It was a deal breaker. I called
my aunt Julie and told her, “Come pick me up.”
“From the rehab?” she said, unsure of what to do. “Aw, I don’t know,
Efraim. Maybe you…”
“Now!!” I screamed into the phone; she was there within ten minutes.
When I checked out, I specifically told the staff, “I’m a grown man, an
adult... Don’t call my mother.” I walked out five days into Holistic Health
Center’s 28-day program - and yes, they called my mom immediately after I
left the facility. Unfuckingbelievable!
MY MOTHER WAS FURIOUS with me. “Five days!” she yelled,
when I eventually answered her call. “If you don’t check back in there I
swear to God Almighty I’m going to Marchman Act you.”
“Listen,” I told her, “I think the five days did me some good... give me
a chance. I’m feeling much better, mom.” I’m still not sure how she bought
it, but for some reason my mother said she would give me a chance to prove
I had cleaned up my act. I think I made it a week before someone told her
they had seen me drunk and coked up at a club on South Beach.
This time she insisted I admit myself to Torah and Twelve Steps, a
residential program. It was run out of a grimy residential house in a
crummy neighborhood, by Rabbi Israel Burns. He had filled the place with
bunk beds and mixed the Torah’s teachings with AA’s twelve steps. It felt
like kind of a scam, but my mother wouldn’t let up about it.
 I walked in on September 18th, took a good look around at the
conditions, and told the Rabbi, “I don’t want to take your residential
program, but I’m willing to work something out with you.” I convinced him
to allow me to attend three AA meetings per week and then have a private
counseling session directly afterward with the Rabbi. “And of course, I’ll
pay full price.” Needless to say, he went for it.
I attended my North Miami Beach AA meetings with a 12-ounce cup
of Patron Silver in a Starbucks coffee cup. Not a shot of vodka in a coffee
cup - I’d walk in with a full cup of liquor - no orange juice, no cranberry
juice, no Red Bull. Keep in mind AA meetings are supposed to be sacred
places of acceptance and honesty, and I’m dozing off and slurring my
words. The actual recovering alcoholics that suspected I was drunk or
getting there would stare and shake their heads, but I just ignored them and
kept drinking.
I convinced the Rabbi to sign off on my treatment about three weeks
later - October 8th of 2008. I called my mother and said, “God and Bill W.
cured me; I’m all better now... I’ve got a letter from Rabbi Burns and
everything. It’s all official.”
IN EARLY OCTOBER of 2008, Kosta Trebicka blew his last whistle.
After testifying at the Congressional hearings and the Albanian criminal
inquiries of Yilli Pinari, the director of MEICO, the Defense Minister,
Fatmir Mediu, and Prime Minister Sali Berisha, among others, Trebicka had
an “accident” while waiting to testify at the trials of Pinari, Mediu, Berisha,
and quite possibly myself.
Trebicka somehow managed to flip his vehicle while driving on a flat
deserted paved road, throwing him out of the car. It turned out that a police
friend of Berisha - the ex-Prime Minster by this point - conducted the
investigation and signed off on the police and autopsy reports. Apparently,
it doesn’t pay to testify against corrupt Albanian officials with known ties to
organized crime, who would’ve thought? No one ever believed it was an
accident.
I HAD MY PROFILE ON “JDATE,” a social networking site for
Jewish singles, and the truth is, it was like fishing with dynamite. There
were so many Jewish girls on “JDate” looking for a Jewish husband, that it
almost wasn’t fair.
Unfortunately, the media attention my case generated seriously
cramped several of my dates. I met one girl - a gorgeous college student -
for dinner and clubbing. Things were going great so I asked her, “You
wanna come back to my place?”
“Umm...” she thought about it for a couple of seconds and shot me a
shy smile, “yeah, I think I do.”
Things were looking good. She was following my Mercedes back to
my apartment when suddenly her Toyota swerved down the wrong off
ramp. I called her cell asked College Girl if she had had “a change of
heart.”
“Yeah,” she said, “you could say that... I Googled you.” Fucking
Google! “You’re a criminal... you ripped off the government! I’m not going
home with you.”
“Technically, I’ve only got pending charges and you shouldn’t believe
everything you read,” Then I thought about it from her perspective and said,
“But you’re probably making the right call.” It wasn’t going to work out
anyway; she seemed too judgmental.
I met another girl - an attractive medical student - for dinner at Tuscan
Steak - an upscale steak house - and about halfway through our meal she
started in with what I think of as the “husband grooming” questions: “Do
you like kids?” and “Are you close with your family?” and of course,
“What do you do for a living?” None of which I had good answers for, so I
gave her some vague nonspecific responses like; “Kids are great,” or “My
mom and I talk all the time,” and “I’m a procurement specialist.”
Then I flagged down the waitress and asked, “Can we get another
round here?”
Obviously my answers or behavior sent up some red flags because
when I excused myself to use the restroom she Googled me. By the time I
returned, she had read the New York Times article, glimpsed the Miami
Herald’s and a few others - none of them glowing endorsements.
When I sat down, the med student was staring at her iPhone with her
mouth open, not slightly ajar - this chick could have caught flies.
“Everything okay?” I asked, and she held her cell out - screen facing me -
so I could see my DUI mug shot. Fucking Google!
“Who are you?” she asked, in an extremely snobbish tone, and then
looked at her iPhone. “A restraining order, battery, domestic violence, two
DUIs... and... international gun running???”
“The restraining order and battery charges were dropped; I was never
charged with domestic violence, and I’m gonna beat both those DUI
charges… or… at least one of ‘em anyway.” Even as I said it, it sounded
horrible. “And don’t believe everything you read... I’m a defense contractor
not an international gun runner.” She just stared at me slack-jawed. I
stopped the waitress and said, “Seriously, we’re gonna need another round -
ASAP!”
I actually dated her for a little while - the med student, not the
waitress.
PACKOUZ KNEW I HAD A PROFILE ON “JDATE.” In December
of 2008, I was checking my “JDate” account while talking to a Russian
“business man” who wanted me to invest his money in ammunition deals.
“Look,” I said, “I’m looking to buy forty million South Korean .30 carbine
rounds to import to the U.S. for commercial sale... I’m pretty sure I can
make a fifty percent profit on ‘em. It’s two million, and I’ll give you thirty
percent of the profit.”
I was sifting through some profiles when I received an IM (Instant
Message) - ”Hi!” - from a “JDate” member. Now, I should have known
something was wrong because even in the cyber world of Jewish online
dating the guy usually makes the first move. I rarely got approached.
I quickly checked out the IM’s profile and found out she was a five
foot seven inch modelesque leggy blonde with store-bought tits and a
perfect smile - drop dead beautiful. We swapped IMs for about 20 minutes,
and she suggested we get together for dinner the following night. Unheard
of!
WE MET AT DEVITO’S (Danny Devito’s restaurant) on South Beach,
a trendy New York stylish Italian bistro. Yvonne Salha was half Bulgarian,
half Lebanese, and twice as hot in person.
Over cocktails and tequila shots she told me she worked as a model,
“Occasionally.” By the time my steak and her gnocchi pasta came, we were
on our second round and I knew Yvonne was an addict; she had been to the
restroom twice in the last 30 minutes, hadn’t touched her food, and her nose
was pink.
“You got any more of that?” I asked, after her third trip to the ladies
room.
“What are you talking about?” She denied having any powder on her,
but after some cajoling she pulled a glass vial of coke out of her purse. By
the end of our meal we were both fucked up.
 She asked me to come back to her apartment and by midnight I was
hip deep into Yvonne. We started hanging out, going to clubs, and
gambling. One night at the Hard Rock, after one of my real winning streaks
- I was up roughly $20,000 - she said, “Aren’t you going to throw your
good luck charm something?”
I was a little taken back, but I slipped her two orange chips - $2,000.
Over the next few weeks, two things became obvious. Yvonne’s “modeling
gigs” were actually “dates.” She wasn’t an aspiring model, she was a high
priced escort and for the right money, I’m pretty sure she was an expensive
hooker too. The second thing was, she wanted me to be her boyfriend - ”her
sponsor.” Regardless of the fact that Yvonne insisted she was half Jewish,
my mother wouldn’t have approved - it was never going to happen.
One morning I woke up in my apartment and she was lying beside me
crying. Now this isn’t the kind of chick that cries - this is the type of chick
that would eat her young - so the crying was unexpected. “I’ve gotta tell
you something...” Please dear God please don’t let her be pregnant. “A
couple of weeks ago, I was getting a massage from a guy named David
Packouz... and he, he asked me to hook up with you.”
“Holy shit...” I muttered, “Packouz?” Apparently he had asked her to
get close to me and place some spyware on my computer, so they could
steal my PIN number and drain my bank account. I couldn’t fucking believe
it, not that I didn’t believe her. But I couldn’t believe Packouz thought he
could pull off such an elaborate plan - he was no hacker. The guy was an
idiot.
“After I got to know you...” she sniffled back some tears. “I can’t do it.
I like you too much.” She couldn’t go through with Packouz’s plan. I’m
sure she was hoping the confession would be endearing.
I discussed it with my attorneys, who had a private investigator -
Richard Ashenoff - conduct a telephone-recorded interview:
Today is Wednesday, January 14, 2009... The reason for my call is to
review with you [Yvonne Salha] some information and possibly you can
shed some light too. Do you know a person by the name of Efraim
Diveroli?
Answer: Yes.
Ashenoff: And could you tell me under what context his name came
up?
 Answer: From my masseuse [David Packouz]... Uh, [I told him] that I
was looking for somebody around my age range, financially stable, and he
[Packouz] said that he has a business - his ex-business partner - that would
be very vulnerable for me to... date in terms that he would try to receive
money from him... [Packouz] told me where I could find him [Efraim] on
this JDate.com and my intentions were just to meet him and date, and his
[Packouz] intentions were to over time try to make plan to take his money.
Ashenoff: Okay, and at some point did you in fact go into JDate...
Answer: (inaudible) Yes... I knew there was a vendetta... [Packouz
said] I want you to get very close with Efraim... Then his plan was to put a
keylogger on there, record all of his bank account information; everything
that’s typed, passwords and then to do a transfer, which no way would I
do... When he’s giving me the plan I told him that that’s ridiculous...
Ashenoff: Okay.
Answer: [A]re you going to contact him [Packouz] with my statement?
Because of where I live, you know, he comes to my house... and he is
definitely a criminal... END OF TAPE.
IN MARCH OF 2009, YVONNE JUST DISAPPEARED. I later found
out that she had gone with an escort friend to some wealthy client’s house,
named Ira Something. Yvonne’s friend, or probably both of them,
apparently broke into the client’s place and were in the process of
burglarizing the house when Ira Something came home and discovered the
crime in progress. Either Yvonne or her friend attacked the guy or
threatened him or something, and he called the police. They were both
arrested for burglary in an occupied dwelling, battery, and possession of a
controlled substance. Yvonne was sentenced to 30 days in the county jail.
A month later - after she was released - Yvonne called and told me all
about it. “I feel like I’ve changed as a person,” she said. “I’m sober and
drug free... and I’m not going to do anything anymore. What’d you think
about that?”
“Really?” I said, “That sounds great, I’m still pretty much the same...
So, good luck with that.” I hung up the phone and never answered or
returned another one of her calls.
ABOUT THE SAME TIME Yvonne was finding sobriety, my mother
was receiving regular reports about my inebriated escapades. She had so
many informants watching me I couldn’t do anything without someone
calling her. She had everyone snitching and ratting on me: my aunt, my
secretary, employees, friends, people from the “community.” I was under
24-hour surveillance. My mother was worse than the government, and she
had more spies than the director of the Mossad.
Sometime in early April of 2009, my mother was lecturing me about a
call she had received. “Efraim!” she barked, “you have to get some help
with the drugs and alcohol. I’m up all night worried sick about you;
terrified I’m going to get a call saying you overdosed and - God forbid -
you’re dead... It’s not fair to me!”
“Look!” I yelled, “All your little informants are lying to you. I’m not
doing anything, so drop it!” She didn’t believe anything I said - for good
reason.
MY MOTHER PETITIONED THE COURT TO MARCHMAN ACT
ME. I fought it of course - had a court-appointed counsel and everything.
The hearing took place on April 11th of 2009, in this dingy little Dade
County courtroom. The prosecutor sat next to my counsel and I, coaching
my mother on what to say - ”Make sure to mention the DUI, the drug
rehabs, and his alcohol and cocaine addictions.”
My mother did a pretty good job of painting me as the lunatic junkie I
had become. When she was finished with her testimony, the General
Magistrate said, “I personally think sixty days in the county jail would do
you some good...” I thought, holy shit, this guy is about to throw me in jail,
but instead he ordered me to serve, “Sixty days in an inpatient treatment
facility.”
I was re-admitted to The Holistic Center - the posh residential drug
treatment facility I had dropped out of six months earlier. Around a week
after being admitted, Shapiro and Srebnick showed up at the facility to
speak with me; the staff arranged for the attorneys to use a conference
room. After all their bolstering about how the government didn’t have a
“strong case,” they suddenly wanted me to consider taking a plea deal.
“Here’s the offer,” said Shapiro, “the U.S. Attorney will allow you to
plead to one count of conspiracy to defraud the U.S. Government... per the
United States Sentencing guidelines, you’ll score out to fifty-six months,
but we’ll argue for a lot less and I think we’ll get it.”
“But I didn’t defraud them...” I said. “You said this was beatable; what
happened to getting this dismissed... or going to trial?”
“You go to trial and lose... you’re looking at fifteen years with Judge
Lenard.” I couldn’t believe this was happening; 15 years for repackaging
ammunition that I had been given permission to repackage and conspiring
to cover up something that wasn’t a crime. “I need to think about this.”
And in the midst of this drama I had to deal with drug counseling and
group therapy sessions. It was horrible. We had to sit around in a circle
holding hands and talking about our feelings, our childhoods, and our
addictions. It was a bunch of rich kids complaining, “Mommy didn’t hug
me enough” I was facing a 15-year federal prison sentence and they were
crying, “Daddy won’t pay my Beemer payment anymore.” If I didn’t want
to use before, I did after four weeks of that shit.
I started feeling really thirsty. I walked out of the lobby the receptionist
said, “Mister Diveroli? Mister Diveroli... Mister Diveroli!”
I headed to a local gas station and bought a few Coronas - 28 days into
the 60-day program.
My mother called about 20 minutes later. “Efraim,” she said in a
strained voice, “turn around and go back... now.”
“No,” I said, downing my second Corona.
“Go back,” she said, a little more forcefully.
“Not gonna happen.”
“Oh my Lord, you’re out of control.”
SHE CALLED ANOTHER HEARING and the Judge ordered me to
an additional 60 days. This time I was admitted to Alternative Treatment
Center, a boot camp style program that took a tough love approach to
treatment. I checked in drunk and coked up. I was in the middle of sleeping
it off when they woke me up at five o’fuckingclock in the morning. The
drug treatment coach was walking around kicking the patients’ beds and
yelling something about calisthenics and a five-mile run. “Come on,
Diveroli,” said the treatment coach, “early bird gets the worm.”
The only worm I was interested in was in the bottom of a tequila
bottle. “Fuck off, I’m hung over!”
He kicked my bed again and yelled, “First day of the rest of your life,
Diveroli!”
“Kick my bed again,” I snapped back, “and it’s gonna be your last. I
shit you not!” I was allowed to sleep a few hours and asked to leave,
promptly after I awoke - something about threatening the staff. I didn’t even
make it a full day.
They had a staff member drop me off at the local convenience store on
203rd Street in North Miami Beach, next to a strip mall where an AA
meeting was being held. I had attended meetings there several times before.
When I got out of the car I turned to the staff member and specifically said,
“Don’t call my mother.” I’m pretty sure the guy was on the phone with her
before he drove out of the convenience store’s parking lot.
I went into the store, bought two 32 oz. Heinekens, and started
drinking them while sitting on the curb. When the AA meeting ended the
members started exiting the strip mall; one of the older recovering
alcoholics recognized me. “So,” he asked, “fall off the wagon again?”
“Not sure I was ever on it,” I laughed, and took another swig of the
fine Dutch brew - it felt so good going down.
My mother was not pleased with my expulsion from Alternative
Treatment Center. She started making calls: my probation officer, the
attorneys, and even my shrink. She was desperate to get me help. To get me
fixed.
AS PART OF MY FEDERAL BOND I was forced to meet with a
psychologist at least twice a week. Dr. Strumwasser was generally
condescending - I hated the guy and I couldn’t stand the unnecessary
process. As a result, I was constantly late for our appointments or just
wouldn’t show up at all. He consistently made comments about my family
and my parents in particular. Strumwasser was of the school of thought that
you are 100 percent a product of your environment; therefore I was
rebellious and disliked authority, and had a drug and alcohol problem,
because of my parents. “Poor parenting,” he used to mutter underneath his
breath.
“Bullshit,” I told him on more than one occasion. “No parent out there
would have been able to handle me as a teenager.”
“Efraim,” he grunted, “my teenage children have shown signs of
rebellion on some occasions, but my wife and I have always managed to
keep them in line. They’re not perfect, but they are exceptional children.”
Keep in mind that unbeknownst to Strumwasser, I knew a Persian kid
from the neighborhood named Bubba - yeah that’s his real name - he told
me in no uncertain terms that he was fucking Strumwasser’s daughter on a
regular basis. Bubba said she was an absolute nymphomaniac, a total freak
in bed, and loved it in the ass - obviously she was seeking attention or
suffering from poor self-esteem issues, but Strumwasser sat there session
after session and told me my parents had raised me wrong.
“Doc, listen, your theory is way wrong.”
 “You don’t have a medical degree in psychology,” he smirked, “or the
experience to base that on, do you?”
“No, no... I don’t,” I smiled, mischievously, “but I know your
daughter, and from what I’ve heard, you’re right about one thing... she is
exceptional.” I never told him why, but from that moment on Strumwasser
absolutely hated me too.
CHAPTER TWENTY-SEVEN
 DRUG FREE URINE
“To alcohol! The cause of - and solution to - all of life’s problems.” - Homer Simpson, The Simpsons
(TV)

IN MID MARCH my mother called another hearing and got me court

ordered to another 60-day program. This time it was the Wellness Resource
Center facility - another ritzy treatment facility, but you couldn’t have cell
phones or laptops. It was killing me. On May 21st of 2009, one of my
attorneys, Marko Cerenko, checked me out of the facility and brought me to
Shapiro’s office for a “client meeting.” No big deal.
They tried softening me up with croissants and coffee, but it was an
ambush. Srebnick and Shapiro were there and they made sure to have Dr.
Strumwasser - my shrink - there too. Strumwasser was there to attest that I
was mentally competent enough to make a decision regarding my case.
Keep in mind Wellness Recourse Center was not only an addiction
treatment center; it was also a mental hospital. So they were covering all the
bases. Shapiro immediately began laying out all the reasons they thought I
should take the government’s offer. Not what I wanted to hear after
spending nearly $2 million on a bunch of hot shot “trial” attorneys.
Shapiro pulled out the Federal Sentencing Guidelines, turned to the
fraud section and pointed to a paragraph that was written in legalese.
“Based on the loss amount of eleven million dollars, you’re facing fifteen
years... That’s the loss the government will seek, and I’m sure Judge Lenard
will agree with.” I know now that was only true if the U.S. Army had lost or
even had the potential to lose $11 million, which they hadn’t.
“But the ammunition was all good,” I said, terrified at the possibility
of 15 years in a federal prison. “They received the Chinese ammo... and...
and they used it. All of it.”
“That’s not how it works, Efraim.” That was precisely how it worked.
The Army’s actual loss (by their own self-serving calculations) was only
$149,279 and I believe even that number was artificial; a creation of the
inflated administrative costs the Army supposedly incurred when they were
“forced” to re-procure the ammunition AEY, Inc. had not yet delivered. But
they didn’t charge me what I charged them, no, the Army charged me full
retail price. Regardless, at the $149,279 loss amount I was only facing 33 to
41 months in a worst-case scenario... not 15 years. Unfortunately, I didn’t
know anything about the law and I was too busy with my addictions and the
insane ideas they spawned to look into it. “I’m not saying you’re guilty...
I’m saying they’re stacking the deck against you.” They made it sound like
I didn’t have a prayer at trial - under threat of prosecution, people were
lining up to testify against me.
“The Assistant U.S. Attorney is still willing to give you a good plea,”
said Srebnick, “but you’ve got to make a decision.” I’d been indicted on 85
counts of fraud and making false statements to a government agency, but if
I would accept a plea deal the AUSA would allow me to plead guilty to one
count of conspiracy to defraud the U.S. Government. They made it sound
like dropping the other 84 counts would have a huge impact on my ultimate
sentence, when in fact that wasn’t the case; the sentence was driven by the
Federal Sentencing Guidelines, based on the underlying conduct, regardless
of the amount of counts. However, it did limit my exposure to a statutory
maximum of only five years, but per the guidelines (which are almost
always followed) I was facing less than that anyway.
“Efraim,” said Shapiro, “we’re confident we can convince the Judge to
give you some type of very lenient sentence and possibly even house arrest
and probation.”
“Well... I guess I’ll take the deal.”
Srebnick placed his hand between my shoulder blades and patted my
back. To this day, I felt like he was trying to push the knife in deeper.
“You’re making the right decision,” He said. Here is my opinion about the
Shapiros, Srebnicks, and Blacks out there: They tell their client what they
want them to know in order to manipulate them into making the choices
they want them to make. Their legal strategy seems to be based on what is
financially beneficial to them, not their clients.
A COUPLE DAYS BEFORE I COMPLETED MY 60 DAYS in rehab
I was taken to the U.S. Attorney’s Office to meet with Assistant U.S.
Attorneys’ Fernandez, a subtly attractive latin woman in a federal
prosecutor sorta way, and Koukois, a skinny, nerdy, bookish type guy with
glasses. The two of them were chattering away with DCIS Agent Robert
Koones - he had taken over the case from Agent Mentavlos. Koones was
around six foot tall and muscular - your typical jarhead Federal Agent. The
three of them looked pretty pleased with themselves when Srebnick and I
walked into the room. But that all faded away after I signed my plea.
As part of my agreement I was required to explain how I had passed
the DCAA audits and what weapons and munitions I had purchased from
China. In return, the U.S. Attorney’s Office agreed to recommend I be given
leniency, but they refused to commit to any specifics.
They were hoping for stories about fraudulent bank statements and
forgeries, nefarious international arms deals, crooked politicians and illegal
weapons and munitions purchases. But I hadn’t done any of that.
“All I did was provided the documentation requested by the auditors,”
I told them. “There was no fraud involved.” The “subject-to” appraisal that
Ralph pledged was still worth roughly a million dollars whether it had been
rezoned or not. Hell… with the credit terms we received from our suppliers,
that would have been enough to qualify AEY anyway.
“What about Blane’s allegation?” Asked the DCIS agent.
“I’ve never bought AK-47s or any assault rifles from the Chinese.” I
had bought tens of thousands of ballistic helmets and bulletproof vests
there, but that wasn’t illegal. “Everything I’ve purchased was from
legitimate suppliers and all of it was sold to the U.S. Government.”
They wanted clandestine meetings, secret rendezvous, international
spies, and cloak and dagger stuff - stuff I didn’t have. “And Kosta
Trebicka?” asked Assistant U.S. Attorney Fernandez.
“I don’t know anything more than you do... But if I had to venture a
guess, I’d say the Albanians murdered him.”
The U.S. Government thought they had the “Lord of War,” but I was
just a kid with a drug problem who had excelled at this one thing. When I
left, they looked so disappointed.
ON JULY 21ST OF 2009, I was released from the Wellness Resource
Center. As part of my release I had to attend drug classes, take scheduled
piss tests, and meet with a treatment specialist at another drug rehab called
The Village. The first thing I did was call Dejan. “I’m goin’ to the Hard
Rock. You comin’?”
“No, Efraim...” he said. “You are in rehab...”
“They let me out. You coming or not?”
 I could feel him struggling with it. Keep in mind: Over the last year he
had watched me lose roughly $250,000 playing blackjack. “I meet you
there...” Dejan sighed. “No drinking.” I’m not sure what he was thinking.
I’d been locked up in a rehab for 60 days - there was nothing I wanted more
than a shot of alcohol, coke, and some ass. And I could get it all at the Hard
Rock.
By the time Dejan got to the casino I was already drunk, and Julia and
I were in one of the high-limit rooms - there’s like 20 of them. The casino is
huge, roughly 140,000 square feet of table games and slot machines. Nearly
100 tables, from Three Card Poker to Mini-Baccarat. It’s got all the bells
and whistles - posh decor with touches of classic rock art and musical
accents. It’s not Vegas, but I loved the place.
I was playing blackjack for $1,000 a hand and doubling down. I had
run $5,000 up to $60,000 within the first hour. Julia and I were doing lines
in the restroom every twenty minutes, and I was on a roll. Over the next few
hours, with Julia and Dejan rooting me on, I ran the $60,000 up to over
$210,000.
It was after midnight and despite the casino being climate controlled, I
was sweaty and sticky from adrenalin and cocaine. I handed both Julia and
Dejan around $2,000 in orange chips and told them, “I’m going up to the
room for a quick shower. I’ll be back.”
“Efraim,” said Dejan, “you should quit...” But I wasn’t about to quit.
I remember walking into the spacious and luxurious suite the hotel had
comped me. I had almost forty brown (five-thousand dollar) chips and a
couple dozen one-thousand dollar orange chips in my hands. I had just won
back nearly everything I’d lost over the last year. I was on half a dozen
medications, drunk as a skunk, and coked out of my mind. I stared into the
mirror through blood shot eyes and thought, I’m a monster. And just like the
arms business, I couldn’t walk away... I couldn’t leave the casino.
Over the next three days I lost every orange and brown chip I had won
that night.
THE FOLLOWING MORNING JULIA AND I WERE LYING IN
BED waiting for room service. I had been up all night gambling - and
losing - and she said, “I’ve met someone...”
“Okay,” I said. We weren’t exclusive or anything, but I was a little
shocked. I’m not sure why - I didn’t treat her bad, but I didn’t treat her great
either. No Jewelry, no romantic dinners, no flowers, no expensive vacations
- just a lot of partying and fucking. I knew she was looking for more and I
didn’t want to give her the wrong impression.
“He’s forty-years-old...” she rolled onto her side and looked at me;
maybe she was hoping I would talk her out of it, but I wasn’t going to. “He
wants to marry me and have children. He’s a doctor.”
“Sounds like a catch...” And just like that - it was over.
AFTER JULIA AND I STOPPED SEEING EACH OTHER I started
playing blackjack pretty much every night. I could do anything I wanted at
the Hard Rock: kick over chairs, throw drinks - anything. That’s how much
money I was losing.
Dejan had become such a buzz-kill that half the time I didn’t even ask
him to come. I was sitting at a high-roller table, doubling down and losing
$10,000 a hand and lit up on coke. I’d been dealt a King of Spades and a 3
of Hearts - 13. The dealer had a Queen of Diamonds, so the likelihood I’d
win was low. I tapped the table and drew an Ace - 14. Shit! I tapped again
and the dealer turned over a 10 of Spades - bust.
“Oh my God!” I yelled. “I just lost ten thousand dollars!” I started to
laugh uncontrollably. I was that fucked up.
My cell phone rang and I yanked it out of my jacket pocket... along
with a bag of cocaine, which flew through the air and landed on the
blackjack table, its contents spilling out onto the felt. Powder was
everywhere.
The dealer glanced at Nick, the Casino Manager and I thought Holy
shit! This time they’re going to throw me out for sure. Nick immediately
grabbed two playing cards and quickly scooped up the contents of the
Ziploc, slipping it all back into the bag and handed it to me.
Nick leaned into me and whispered, “Please, Mister Diveroli, in the
restroom.” I could get away with anything I wanted to in the casino.
A COUPLE OF WEEKS LATER I was putting together a domestic
ammunition deal at my apartment when I got a call from Jenny Something
and her friend Kaitlan; two girls that I had met at Holistic Health Center.
Jenny was okay looking, but Kaitlan was a straight ten, a real dime piece. A
trashy little five foot, seven inch, 120 pound southern bell with blonde hair
and green eyes and a couple of super sexy tattoos. She had been dating a
teen meth-head during her stay at Holistic, but that relationship was over.
The first minute or two of the conversation I was wondering if they were in
recovery. I wasn’t sure if they were calling to party, or if they had been
successfully brainwashed by the counselors and “recovery coaches” at
Holistic Health and called to invite me to an AA meeting where I’d have to
stand around, hold hands and sing kumbaya.
“So...” asked Kaitlan. “You wanna hang out; think you can get some
blow and xanies?”
I struggled with it for a few seconds; I really didn’t want to get fucked
up, but I really wanted to nail Kaitlan. “Yeah, I can make a few calls.”
ALBI A LONGTIME FRIEND FROM THE NEIGHBORHOOD, and
I met the girls at Studio, a karaoke bar below the Shelbourne Hotel; it was
mostly 20-somethings hooking up and embarrassing themselves. Within 20
minutes we were all drunk and lit up. I was on stage singing Matchbox 20s
Unwell and Bobby Pinson’s Don’t Ask Me How I Know. Within an hour
Albi and I were snorting coke off Kaitlan’s tits in the restroom. A few hours
later we were at the bar doing kamikaze shots, when Packouz and a couple
of his buddies came up to me.
“You better pay me, bro!” yelled Packouz, over some bad karaoke.
“Fuck you!” I replied. “I was about to give you more money then
you’ve ever seen in your life and then you got us all fucked up by running
to the U.S. Attorney... including yourself. You ain’t gettin’ shit!” Packouz is
still waiting for that check.
AROUND FOUR O’CLOCK in the morning, all four of us piled into a
minivan taxi. Kaitlan and I were making out in the back of the van; she slid
her hand down my pants and grabbed me - it was on. I yanked up her mini
skirt - she wasn’t wearing panties - frantically unzipped my jeans, pushed
her flat on the bench and slid inside her. We went at it like two dogs in the
park, like porn stars, like her ex-teen boyfriend never could.
She was doing all the right things - biting my neck and breathing hard,
like she had never had it so good. “Give it to me baby!” she squealed. “Give
it to me!” While the Pakistani taxi driver was yelling, “What is going on
back there? What are you doing? Stop that!”
Kaitlan slid her tongue into my mouth and she tasted like Captain
Morgan and the Marlboro Man. I was hammering away at the sweet spot
and she moaned, “Let it go baby,” and I released.
The following morning Albi was gone, but Jenny and Kaitlan were
both lying next to me in bed - naked. They pretty much never left after that.
They moved in that day. We spent the next few weeks partying at dance
clubs and gambling at the Hard Rock. The two of them were 100 percent
dependent on me. They didn’t have jobs and their families had all but given
up on them, and I needed them to hang out with me: your typical symbiotic
junkie relationship.
I HAD TO DO SCHEDULED PISS TESTS for my outpatient
treatment with The Village. The scheduled drug tests weren’t all that hard to
beat. I had worked something out with my secretary to supply me with her
drug free urine for a small fee. There wasn’t much she wouldn’t do for a
small fee. I would keep it in my refrigerator and microwave it just before I
was scheduled to take a urinalysis.
On August 10th of 2009, Jenny, Kaitlan, and I had been up most of the
night doing coke and pills - Ecstasy, Xanax, Percocet and Oxytocin. Then
we crashed around four or five in the morning, slept for a couple hours, and
started over again. This was our typical routine.
At around five in the afternoon I was driving to my outpatient
counseling session at The Village, which included a scheduled drug test.
Obviously, I couldn’t pass a piss test, so I was driving to my substance
abuse meeting with a jar of my secretary’s boiling hot drug free urine
rolling around on the floorboard - the sound was really starting to irritate
me. I leaned over to grab the jar, taking my eyes off the road for a couple of
seconds too long, and when I looked up, Bam! I rear-ended a taxi - a Crown
Vic. I was only doing about 15 to 20 miles an hour, so it wasn’t that bad.
The people in the cab were pissed, but uninjured.
My first thought was to run, but I hadn’t taken anything for several
hours and I felt sober. I thought I looked okay and was in good enough
shape to talk to the cops - I was wrong. When the police arrived the officer
took one look at me - disheveled and red eyed - and said, “I’m gonna need
you to take a field sobriety test.”
“No problem,” I replied. I really thought I could pass it.
The test was harder than I recalled, and I was more under the influence
than I thought. Somewhere between trying to walk a straight line and
touching my nose, I failed it.
I was arrested for Driving Under the Influence; booked, fingerprinted,
and photographed. I wasn’t actually drunk, but the urinalysis listed cocaine,
Benzos, and a slew of artificial street drugs I had never even heard of
couldn’t even remember how they had gotten in me.
Kaitlan and Albi posted my $1,000 bond the following day. Then,
Kaitlan managed to crash Albi’s car - in the jail’s parking lot! That cost me
another $1,000; not that I’m counting, I’m just saying. I hired Robert Rief,
the same “DUI specialist” that was currently delaying my first DUI charge.
“Another one?” said Rief, when I called him. “Well, it’s going to be another
fifteen thousand.”
“What? You don’t have a repeat customer discount?”
“No, no, I don’t. And this one’s going to be even harder to beat then
your last one.” He hadn’t beat my last first DUI charge yet; Rief had only
managed to delay it, which was precisely what he did with this one.
I was now out on two state bonds and one federal bond; Marchman
Act court ordered treatment and juggling two junkie house guests - one of
which I was carrying on a very sexually explicit relationship with, while the
other pretended not to watch. This was my life.
CHAPTER TWENTY-EIGHT
 HARD ROCK
“Success is how high you bounce when you hit bottom.” - General George Patton

IN AUGUST OF 2009 I WENT TO MY RULE 11 hearing to change

my plea from “not guilty” to “guilty.” The gallery was filled with press. I’m
pretty sure there were reporters from the New York Times, Miami Herald,
and Details magazine. I’m sure Guy Lawson with Rolling Stone magazine
was there. I had been crucified in the media, from CNN to the Orlando
Sentinel - bashed for providing a service and product the U.S. Army wanted
and needed.
I wasn’t even all that nervous standing in court. I was surrounded by
my lawyers, and everyone seemed relaxed. There was no tension. It was
just a routine appearance.
Part of my new bond conditions stated that due to my multiple DUIs I
couldn’t drive anymore and I had to now take bi-weekly scheduled drug
tests at the U.S. Probation Office. Not that any of this stopped me from
using or driving.
I remember the judge saying, “Mister Diveroli, you understand by
pleading guilty you’re never allowed to own a firearm.”
“Yes, your Honor,” I said. According to my attorneys, I wasn’t
personally allowed to own a firearm, but I was allowed to buy and sell
weapons and munitions through a corporation, provided I wasn’t ever
personally in physical possession of them. My understanding was that the
government pretty much just didn’t want me - a felon - to have a weapon in
my home, or on my person. No big deal.
ROUGHLY A WEEK LATER, Jenny, Kaitlan, and I were at the Hard
Rock hotel. We had been gambling and drinking all night. My mother had
been looking for me since my plea hearing, leaving messages on my cell
phone, calling my friends and employees. Kaitlan and I had just finished
having the usual wild sex when someone knocked on the front door and
said, “Room service!”
 We were both lying in bed naked. Kaitlan got up and answered the
door, but left the chain hooked; from the other room I heard her say, “Hey,
you’re not room service...”
“Efraim!” screamed my mother from the hallway. “Get out here!” My
mother and her sister, Aunt Sara, had tracked me down through a member
of our family’s synagogue that worked at the hotel. An informant had ratted
me out. “I’m your mother! Open the door Efraim!”
Kaitlan tried to push the door closed, but Aunt Sara put her sizable
weight into it and the door wouldn’t budge. “Stop it!” yelled Kaitlan. “Back
off bitch, he’s not leaving!”
“You’re only with him for his money!” screamed my mother, from
behind the doorway. “You’re nothing but whores!”
“We’re not whores,” Kaitlan yelled into the door. “We fuck him for
free!”
I knew security was coming and they would cart my mother and aunt
off any minute, so I pulled on my Adidas track pants and went to the door.
“Mom, just go. Get outta here!”
We began screaming at one another until two Hard Rock security
guards showed up, took my mother by the arm and dragged her away. As
she was being pulled down the hall she screamed, “I’m calling your
probation officer and I’m having you Marchman Acted again, and you’re
going to jail this time!”
And I knew she would do it. She had done it before... Plus, she had my
probation officer’s cell number. So for all I knew, she was on the phone at
that very minute.
I grabbed my cell phone and raced out of the room half dressed, ran
down the hallway, and jumped into the elevator. I caught up to them at my
mother’s car. “Mom,” I panted, out of breath. “Don’t call anyone. I’m going
home, okay...”
She wasn’t convinced. “You get in the car right now so we can talk,
Efraim!” she screamed, “or I’m calling!” Her face was red with rage and
wet with tears. Her smart talented entrepreneur son had turned into a
degenerate gambling whoring junkie, and every time she thought I had hit
bottom it only got worse. “Now, Efraim!”
I didn’t see that I had a choice, so I climbed into the car. The following
morning my mother was still threatening to have me Marchman Acted.
Most people don’t know this, but casinos have a policy that allows
gamblers to voluntarily ban themselves from the gaming floor, in intervals
of one, five, ten years, or life. Unfortunately for me, my mother knew this.
She wanted me to ban myself for life!
“Are you fucking with me?” I snapped. “Life!” Over the next few
hours I negotiated with my mother. I had never negotiated harder, not with
the greedy Hungarians, not with the corrupt Albanians, and not with the
thuggish Ukrainians. She didn’t have a chance. When I got her to five years
she wouldn’t budge. “Not gonna happen.”
“Five years,” she said. “Or I call the judge and probation officer
today.”
I leaned into her, our sweaty faces only inches apart, “Listen up,” I
growled through clenched teeth, “there’s no fucking way I’m walking into
that casino and signing for five years... Marchman Act me!”
She cracked, and agreed on a one-year ban. I actually snuck in three
times using disguises, and was caught twice. The same guys - Hard Rock
employees - who I thought were my friends had me thrown out by security.
I felt betrayed.
IN SEPTEMBER OF 2009 I had a meeting with Laura Estevill, my
federal probation officer, and Cerenko. I was being interviewed for a report
that the Judge would use to decide my sentence - a Pre-Sentence Report. I
had been up most of the night drinking and doing coke with Kaitlan and
Jenny. I had a suit on, but I knew I looked rough; no one looks good after a
coke binge. But I wasn’t worried - the lawyers had told me it was only an
interview, no urinalysis required, plus Code-A-Phone hadn’t ordered a drug
test - it was all good.
I walked in and my probation officer got a strange look on her face.
She stepped back, glanced at me from head to toe and scoffed, “I’m gonna
need you to take a drug test.” Fuck!
“Not a problem,” I replied calmly. She handed me the urinalysis test
cup and pointed to the restroom. I did the deed, sat down and was
interviewed as if everything was fine, but the whole time I was thinking
about the results of that test.
THE NEXT WEEK Estevill asked me to come to the probation office,
and when I got there - you’re not going to believe this - she told me, “You
failed the drug test.”
“Really?”
“Yeah,” she said, sarcastically, “really.”
 She called a hearing to have my bond revoked and to have me
detained. A couple of weeks later, on October 7th of 2009, I was ordered to
appear before Magistrate Judge Patrick White. My attorneys, Srebnick,
Shapiro, and Cerenko, along with Dr. Strumwasser and me, marched into
court ready to duke it out with U.S. Attorney Fernandez and Probation
Officer Estevill.
Judge White wasn’t pleased when she heard Fernandez’s testimony:
“Your Honor... on September 8th of ‘09, [Mister Diveroli] submitted a urine
specimen that tested positive for cocaine... and in August of ‘09, he was
arrested for a DUI by the Miami Beach Police Department. That case is
pending... [And there are] two instances that he failed to use Code-A-
Phone.”
“Cocaine while out on bond,” said the Judge, shaking his head. “What
do you want me to do with him?”
My attorneys had discussed modifying my bond conditions with
Fernandez, and she had “semi-agreed” to request the Court to consider the
modifications as an alternative to remanding me to custody. “Your Honor,”
said the U.S. Attorney, “[the Government is willing to accept] more
reporting to the U.S. Probation Office... basically go every day Monday
through Saturday to continue his psychotherapy... attended NA and AA
meetings four times a week... out-patient therapy for three evenings a week
and providing urine during those three visits. In addition, we would also
request a curfew of seven days a week from 10:00 p.m. to 7:00 a.m. [on
electric monitoring].”
The fact that I was still on federal bond while out on two state bonds
was already unheard of.
“I’m troubled by this,” growled Judge White. “This guy, this
gentleman, has been given a great opportunity... and still broke the law on
bond [he needs to go to jail].” He ran a hand through his thinning hair, and
took a cleansing breath. “I want to hear from the probation department...”
Estevill jumped to her feet. “Laura Estevill, U.S. Probation... I agree
with the Court,” she wanted me remanded. “[Misted Diveroli] violated the
law while out on bond.” She didn’t believe additional sanctions would stop
me from using alcohol or drugs. “My position is to ask for him to be
remanded pending sentencing.”
The Judge asked Srebnick why I should be treated any different than
someone without money.
 “[First] he admitted from day one... he had a history of addiction...
[He] is only a twenty-two-year-old person... who went for twenty-one years
untreated for his psychiatric issues... He has basically raised himself since
the age of fourteen-years-old.” Srebnick told the Court I was paying for
everything myself - the outpatient treatment program and my psychiatrist
appointments. He came up with some good stuff, which happened to be all
true. “He needs to be prescribed amphetamines, sleep medication. All sorts
of chemicals need to be pumped into his body to create an equilibrium that
doctors are satisfied with...”
“[W]e have a man who is waiting for punishment,” said the Judge.
“And while waiting for punishment... he broke the law again... Perhaps the
thing that will make him better is for him to understand that the system ain’t
playing with him...” he looked at me and said, “I don’t see how or why this
gentleman deserves another chance... having said that, I don’t think I have a
choice...”
I could see where this was headed, so I stood abruptly, cutting off the
Judge. “Your Honor, can I address the Court please?” He was within
seconds of throwing me in jail. “I had one dirty urine in a year and a half,
and I swear to you at this moment that you will not see me in this
courtroom again.” I told him I was under a tremendous amount of stress as
a result of the fact that I might end up getting sentenced to prison. “I beg the
Court to please reconsider and give me one last opportunity... that’s all I
have to say.”
The judge grunted, “Anybody else?” and Srebnick asked if Dr.
Strumwasser could address the court.
Strumwasser started by telling the Judge that he had 29 years’
experience and was an expert in the field of addiction counseling. “To
incarcerate Mister Diveroli at this particular time would be extremely
deleterious... I do not believe that Mister Diveroli is going to step out of line
at this particular time. If he does... the appropriate authorities will be
informed immediately.”
“[A]t some point in time,” the Judge pointed at me, “he is going to
have to... pay the price.”
Strumwasser started talking about my family “abandoning” me at the
age of 14-years-old; he really laid it on thick, talking about preparing me
for the prison experience. “[T]he earlier that [individuals] are incarcerated
leaves such a horrific scar that it stays with them for the rest of their life...
[O]ne positive urine test in sixteen months’ [shows progress].”
Judge White sighed, “Initially for me this is not a difficult question...
you violated. You have to go.” He glared down at me from his bench, “...but
there is something about this case that may warrant some additional
consideration... [T]he conditions are going to be burdensome.” He looked at
the draft of suggested modified conditions to my bond and approved them. I
couldn’t believe it!
I was ordered to attend NA and AA four times a week, to be drug
tested three times a week by The Village, twice a week by U.S. Probation,
and to attend counseling sessions with Strumwasser Monday through
Saturday. I was placed on house arrest between the hours of 10:00 p.m. to
7:00 a.m. and fitted with an electronic ankle monitor. It was pretty bad.
IN OCTOBER OF 2009 things started to go wrong with my
relationship with Kaitlan. I had already cut Jenny loose; one day she started
talking about cleaning up her act, maybe going back to rehab. I encouraged
her to go, and within a couple of days she had convinced her family to put
her back in rehab.
Kaitlan was a different story - she loved the life she was living. Look, I
liked her, she was a lot of fun, but in any drug-fueled, sexually charged
relationship, there comes a point of diminishing returns; eventually Kaitlan
and I got to the stage where she just wasn’t fun anymore. We were around
each other 24 hours a day, and other than a mutual love of drugs, sex, and
my money, we had nothing in common. I once asked Kaitlan what she liked
to do for fun and she told me, “I totally love to travel.”
“Really?” I asked. “Where have you been?”
She thought about it for a couple of seconds and said, “Mexico... and
Canada... and Europe...” I interrupted her and asked where in Europe? She
gave me a quizzical look and said, “Europe.”
“Yeah,” I smiled. “I got that part, but where?”
She snapped back, sarcastically, “The country of Europe, da...” I
started looking for ways out - just in case I got to the point where I couldn’t
take it anymore. Her father was some rich pharmaceutical manufacturer;
ironically his company made a generic version of Oxycotin. So one day I
started looking for an exit strategy. I knew she hadn’t spoken to her parents
in months and I thought I’d start there. I called Kaitlan’s father to discuss
sending her home. I introduced myself as Kaitlan’s boyfriend, and he said,
“So, you having fun fucking my daughter?”
I couldn’t believe it. “Um... I don’t even know how to respond to that,
sir. I’m calling about - ”
“Let me save us both some time,” he grumbled. “I’m not sending you
any money; you’re probably a junkie, just like her. Between the private
schools, psychiatrists, and the rehabs, we’ve spent a fortune on Kaitlan.
She’s a junkie whore and we’re not giving her another dime.”
The guy was talking down to me and I didn’t appreciate that. “Sir, I
don’t need your money, hell, I’m willing to incur the cost of shipping her
home... but I’ve gotta know you’ll accept her.” I didn’t want this particular
cargo sitting around at a bus station or airport.
“No,” he snapped. “Don’t send her back here. We’re through with her;
you don’t want her... throw her out.”
Kaitlan was a straight junkie, the type of girl who would do anything
for drugs - anything. Left to her own devices, she wouldn’t survive long on
the streets; within a week she would run out of friends and money. She
would probably start shoplifting and God knows what else. That’s how bad
she was. “I can’t kick her out; you know what’ll happen... You’ve gotta take
her.”
“I can’t help you,” he said, and slammed down the phone. I couldn’t
fucking believe it! I was stuck with her. It wasn’t really a big deal, I didn’t
hate Kaitlan or anything, but I knew eventually she was going to have to go.
A COUPLE OF WEEKS AFTER I TRIED TO DUMP KAITLAN on
her parents she started stealing from me - that’s never a good sign. Because
I couldn’t drive, occasionally I would ask her to drive to the local ATM and
get me some cash - she had my card and PIN number. One morning my
aunt Julie - she had online access to my personal account to do the books -
called and said, “So, you got five hundred out last night? You’ve gotta tell
me when you do that, Efraim.”
“I didn’t...” I replied. “Why?” but I already knew the answer.
Kaitlan denied it. “I didn’t; I swear on everything I love,” she said.
“You’ve been good to me, Efraim; I’m not stupid enough to steal from
you... God.” When I picked up the phone she asked, “What’re you doing?”
“I’m calling the bank,” I started pretending to dial. “I’m gonna have
them fax me the still photos from the ATM... and if it’s you, I’m going to
have you arrested.”
 Kaitlan cried, “Stop! It was me, I’m sorry... Please put down the
phone.” She pleaded with me not to have her arrested and thrown in jail.
“Please, Efraim...” Not that I was going to.
“It’s okay, Kaitlan,” I threw her a couple hundred dollars and said, “I
was done with you anyway. You need to go back to Virginia... Talk to your
parents; I’d start with your mom.” I bought her a plane ticket and put her in
a cab. She’d had a pretty good run. She was a real trooper that one.
AFTER THE CANCELLATION OF THE AFGHANISTAN
CONTRACT, AEY, Inc. ceased to exist as a defense contractor. Most of the
employees had left and the few remaining ones, along with me, were
actively trying to recover the capital AEY, Inc. had in deposits and product.
Because I couldn’t bid on government contracts anymore I started
looking for other business opportunities and investments. I tried my hand at
something called placer gold mining. Not hard rock mining. I partnered
with a contract miner, bought 129 acres in Yreka, Northern California for
over $550,000, where several geologists insisted there was an ancient
tertiary channel of alluvial gravel. “According to the ground samples we
took and assays we did,” they said, “by our calculations it should be
peppered with microscopic gold particles.”
I bought over $1 million of mining equipment and applied for the
permits, which should have cost around $100,000, but because of some rare
endangered three eyed butterfly or something they cost me over $300,000.
We dug into the “ancient tertiary channel” and processed the contents, and
dug and processed, and dug and processed... nothing. Not a fucking thing. I
spent over $2 million digging in the dirt. I couldn’t make it work.
I turned to trading commodities, hooked up with a broker named Tom
Feeney, and opened an account with Archer, Daniels, Midland Investment
Services. I was trading large lots of gold futures and for a while I was up
$50,000 to $100,000 a day sometimes, and other times I was down, but
overall I was ahead. At one point I was up over $250,000.
Then I stopped listening to Tom and lost my ass - roughly $250,000. It
just wasn’t for me.
I desperately wanted to find something, but nothing seemed to work
out for me. Sitting in front of a computer watching numbers all day just
wasn’t for me. There was really only one thing I knew how to make money
at.
 I WENT FULL BLAST INTO COMMERCIAL AMMUNITION sales
through my corporation, AmmoWorks. It was just me and a small staff
working out of a 700 square foot office. My sales team consisted of a
couple of guys in their late 20s. First there was Jake Shprecher, a friend of
my cousin Joe. He quit his job with a property management company to
come work with AmmoWorks.
My second salesman, Aaron, was an ex-marine who used to sell
kitchens for Home Depot or something - I got him off Craigslist. I used to
drag him with me to bars and strip clubs after work. Aaron’s wife would
call and yell, “When’re you coming home?”
“Honey,” he would whine, while sliding a folded greenback into a
stripper’s thong, “I’m with the boss... it’s gonna be awhile.” I got this guy
into so much trouble it’s not even funny.
AmmoWorks started buying up massive amounts of ammunition stock
and selling it to dealers across the country. Drop shipping roughly a quarter
of a million dollars a month. I was doing what I do, and AmmoWorks
started to make a monthly profit of forty to fifty thousand dollars - not a lot
of money, but it was growing fast.
We supplied dealers and retailers like the Sportsman’s Guide and
Widener’s Shooting and Reloading. We would buy ammunition from a
manufacturer in Montana and drop ship it directly to a dealer in Minnesota,
or buy stock from a distributor in Texas and sell it to a retailer in Georgia.
At one point I imported 13 million rounds of Lithuanian ammunition
to the U.S. for sporting and hunting use. I stored the product in a New York
warehouse and sold it off over several months. That was a sweet lick; I
literally tripled my money on that deal - made over $2 million on roughly a
million dollar investment, and didn’t have to drop a single bird into a war
zone. This was back in 2007-2008.
EVENTUALLY LAURA ESTEVILL, my probation officer, was
reassigned or promoted, and my probation was transferred to Jim Higby. He
was seriously on my ass - constantly stopping by my apartment, ordering
random drug tests, questioning my monthly finances. The guy was actually
doing his job, and putting a serious cramp in my lifestyle.
One day Higby stopped by my apartment to do a random probation
visit. I sat at my desk as he meandered around; he noticed a box of 33 round
magazines for the Glock 9 mm, “What’s this?” he asked. “You don’t have
any weapons do you? You’re not allowed to have a weapon on the
premises.”
“It’s a South Korean high capacity magazine for a 9 mm Glock. It’s
not a weapon, it’s only a clip.” AmmoWorks was buying them for five
dollars per clip and selling them for $10 to $15. Between the retailers, gun
boards, and our website we were moving several hundred per month. “Take
it.”
“Nah,” he said, dropping the clip back into the box. “I can’t accept it...
Besides I’ve got a .40 Glock 23.”
“We’ve got ‘em for the 23 model,” I yanked one out of a box sitting on
the credenza behind my desk and handed it to him. “It only holds twenty-
nine rounds... I guess that’s not enough for you, huh?” I said, sarcastically.
He looked at the magazine and asked, “Are these legal?”
“Depends on what state you’re in,” I laughed. “You saw it in my
apartment - wasn’t sure if it was legal in Florida and confiscated it... Take it,
I’ve got plenty.”
I didn’t notice if Higby slid the magazine in his pocket or not when he
walked by to grab a Diet Coke out of my refrigerator. We had a pretty good
talk about guns and ammo; he wasn’t a bad guy, really.
I WAS WORKING OUT OF MY APARTMENT and lonely as hell, so
I bought a 12-week-old Siberian husky and named him “Arkan” after the
Serbian Warlord. He was a fuzzy little ball of fun. I used to walk him along
Lincoln Road and South Beach, wearing flip-flops, Bermuda shorts, and a
wife beater. Kids would run up to me and say, “Mister, Mister can we pet
your puppy?”
“Sure,” I grunted, sucking on a Parliament.
Eventually their parents would wander over and see the black box
strapped to my ankle and drag their kids off, muttering underneath their
breath, “That man’s a criminal.” I still laugh thinking about it. Good times.
Good times.
CHAPTER TWENTY-NINE
 KNIGHT AND THE BETA DRUM
“Cops or criminals... When you’re facing a loaded gun, what’s the difference?” - Frank Costello, The
Departed (Movie)

IN MAY OF 2010, I sat down with Cerenko, now AmmoWorks’

corporate counsel, and YK Leigh, the owner of Red White and Blue, at
Emeril’s restaurant in Miami Beach - very art deco with a highbrow
clientele, excellent cocktails and gourmet dishes. We were seated at a table
by the pool, overlooking the ocean.
Leigh was pitching me a South Korean copy - by KCI - of the
venerable Beta drum magazine, manufactured out of Atlanta, Georgia, by
the Beta Company.
The Beta magazine was a twin drum with a capacity of 100 rounds of
ammunition, while increasing firing stability and lowering the weapon’s
overall profile, and with the capability to store ammunition in the full
loaded magazine indefinitely. But in 2009, Beta’s patent had expired. Leigh
stated that his company had an exclusive on the Korean magazine, and he
wanted to work out a deal with me, transferring to AmmoWorks the
exclusive rights to the magazine, at $51 per drum - not a bad deal. But the
whole time Leigh kept hiccupping - he had some type of condition - and it
got worse and worse as the night went on. We tried to be sympathetic to his
problem/disability, but it was a real struggle to keep from laughing. In
addition to the hiccupping Korean salesman, it was 9:45 pm, and if my
ankle monitor weren’t within 50 yards of the black box in my apartment
within the next 15 minutes, I would be in violation of my bond - again!
At ten minutes till, half way through one of Leigh’s chopped up
sentences, I stood up abruptly and said, “Mr. Leigh, I’ve gotta go... I’ve
gotta be home by ten o’clock.” I didn’t give him an explanation, but I did
offer to continue the meeting at my place.
“Oka... ok... okay,” Leigh chirped out.
 By the time we got back to my apartment Leigh was a cacophony of
hiccups. The guy was completely unintelligible, it got so bad he had to
leave, and we never could finalize the deal that night. Once he was gone I
called Buk Seong Nam, my long time contact and trading partner in South
Korea, regarding the cost of the magazine. Nam was the same guy I had
bought the Iraqi helmets from, and roughly 500 K3 machine guns,
ammunition, and other items. “I just want to know if it’s a fair price Mister
Nam, and if Leigh really has an exclusive with the factory in Korea.”
Because if he didn’t have an exclusive, there was no reason to be talking to
him. Nam said he would investigate the matter and get back to me within 24
hours.
THE NEXT DAY he called me back. “Mister Efraim, this guy Leigh is
lying to you.” The expiration of Beta’s patent opened up the design to
anyone that wanted to manufacture it. “No one owns it... and I’m sure I can
beat his price.” Buk Seong Nam and several partners had formed their own
export consulting company out of South Korea. “I know someone at KCI...
give you good price, it’s a great product, excellent quality, precision
craftsmanship... Same as Beta’s drum.”
The Beta drum consisted of two components; the drum storage
housing, which retailed for around $190, and the complete system with
interchangeable feeder clip speed loader and pouch, which sold for roughly
$250. Nam got KCI to manufacture the whole setup for $42 under an
exclusive long-term contract with AmmoWorks. The Beta drums were
being used by military forces and law enforcement agencies worldwide and
highly sought after by many regular civilians looking for the G.I. Joe
experience on the weekends. I was thinking I could undercut Beta and
easily sell 10,000 South Korean drums a month - at a profit of $50 each,
that’s $500,000. “Can you get me ten thousand a month?”
“Yes,” said Nam. “We can do ten thousand a month.” They claimed
they could also manufacture the drum in 9 mm for MP-5s along with a
variety of other weapon systems and would begin working on it
immediately.
I IMMEDIATELY signed a contract with KCI and locked in the price,
and then wired 30 percent ($184,000) for the first order of 10,000. I wanted
to attach a brand name to the product in order to maximize marketing
potential, volume, and price. My sales team started looking for a licensing
deal with a prominent firearms manufacturer. Bushmaster, Remington,
DPMS, and Rock River ARMS didn’t want anything to do with it - it
seemed like no one wanted to back a South Korean product, regardless of
the fact that it had proven itself in the field. I shot off emails and left
voicemails with manufacturers across the country... and that’s when
everything went wrong.
ON JULY 14TH OF 2010, I spoke with a dealer in Orlando - we’ll refer
to him as Richard Banks. I was hoping to sell him some ammunition and
weapons on a strictly drop-ship basis. I also asked him if he had any
contacts that could or would potentially license the South Korean drum.
Unfortunately, once the call ended, Banks Googled me and got multiple
articles, none of them favorable to me... That’s when he called Kevin
McCann, a Special Agent with the ATF (Alcohol, Tobacco and Firearms).
McCann did a little bit of searching on “Efraim Diveroli” and read the
New York Times article and the Southern District’s U.S. Attorney’s press
release, which stated I had “intentionally cut corners to line [my] own
pocket, risking the safety and lives of our men and women in uniform. Such
callousness and disregard for the lives of our soldiers... will not be
tolerated.”
There is a distinct possibility he called the Southern District, or simply
read my plea agreement and found out I was only facing a few years of
incarceration at most, and possibly only probation or house arrest. McCann
made the decision to start an investigation. Not because I was doing
anything illegal, but because - I can only assume - he felt I wouldn’t be
getting serious prison time for the fraud charges in Miami. I suppose that
was unacceptable to him.
The ATF agent asked Banks to introduce me to a “colleague” of his. “I
might know someone with good contacts in the manufacturing industry...”
Banks told me, “Better contacts than me; I’ll have ‘em call you.”
McCann then had undercover ATF Agent Daniel O’Kelly - going by
the name Dan Flannery - contact me, stating he was “a colleague of Banks.”
Because of my felony charge I had let my FFL license expire. I told
the undercover agent I was looking for two things, an importer to bring in
the drums, and a respected manufacturer to brand them. “I’m ready to
import ten thousand a month - right now.”
Flannery said, “I’ve got contacts with several manufacturers.”
“It’s got to be a reputable company,” I told him. “All I’m looking for is
them to license their brand name for the product.”
 Initially the manufacturers Flannery gave me were nobodies, certainly
not “name brands” worthy of paying a brand-licensing fee too. I was
starting to think Flannery wasn’t going to be of any use. Then on August
9th of 2010, he called and said, “I spoke with my buddy Reed Knight a
couple hours ago, he owns Knight’s Armament... and he’s interested.”
“Knight?” The name was synonymous in the industry with quality.
Knight’s Armament Company was a manufacturer of firearms and firearm
parts for the United States military, as well as armed forces and police
around the world. I couldn’t have asked for a better brand name. I was so
excited. I put Flannery on hold, turned to Aaron and said, “Holy shit!
Knight... he’s got Knight.”
Keep in mind: I had heard from multiple industry insiders that Knight
had issues with me. I’d swapped out his SR-25 sniper rifle for less
expensive DPMS 308 Panthers on multiple contracts and under bid his
company’s rail systems for years. But I told myself that those issues were a
few years old, and maybe he hadn’t even put it together - I was using a
different company after all. Who knows?
I was in the process of selling AmmoWorks to Advanced Munitions in
order to completely remove my name from the operation, although I would
maintain a consulting role and ownership stake with Advanced Munitions.
I explained to the agent that my company, along with its millions of
dollars in ammunition stock, was being purchased by Advanced Munitions.
ATF taped the conversation. “I don’t want to be in the ammunition
[business] directly anymore...” I said. “I’m more interested in financing
[arms and munitions deals], consulting. The last couple of years [I’ve] been
trying to get out of that business, [but] I’ve been getting drawn back into it,
when I see something good like this drum.” I laughed, “Once a gun runner,
always a gun runner... No, I’m kidding.”
“Yeah,” chuckled the undercover agent, “nothing wrong with that.”
“I had an issue with the Federal Government... I pled guilty to a
felony.” I told him I was a convicted felon and that was why I didn’t have
an FFL license anymore. All I was doing was buying and drop shipping
ammunition, which was legal according to my corporate attorney and my
criminal attorneys, as long as I didn’t take personal physical possession of
it. And they defined “possession” as me not keeping any firearms on my
person or in my house. “That’s the God’s honest truth about us... Everything
is one hundred percent legal.”
 “So, we are still online with the magazine, with the drums?”
Of course we were. I talked to him about several things related to
importing, and then the undercover agent asked, “Are these... going to say
Made in South Korea on them, or can we pass them off as American
made?” Which would be a violation of Federal law.
“No,” I said, “they have to say Made in South Korea... This product is
proudly made in South Korea... I’ve had my fair lick of run-ins with the
law. I’m not looking for any more.” Not long after that I told him I would
fly whoever needed to be flown in to Miami for the deal.
“Well, how about you come to [us]?”
“I can go as far as Fort Pierce... How critical do you think it is that we
come to him?”
“He wants you to come up to him. So can we still do this?” I was out
on bond and prohibited from leaving the Southern District, so I asked
Flannery to call Knight and see if he would come to Miami. A couple hours
later the undercover agent called back, “...I think he’s gonna make you
[come up to him].” I didn’t want to go. I shouldn’t have gone, but it was -
potentially - a huge deal. “This is a ten million dollar deal...” said the agent.
“If you don’t come up here you’re not going to get the deal.”
“All right.” What was the worst that could happen?
Flannery set up an appointment with Reed Knight or “Trey,” for
August 12th of 2010.
JAKE, DEJAN, AARON, FLANNERY, TREY KNIGHT, AND ME,
met at Knight’s facility in Brevard County - one county outside the southern
district of Florida. Flannery was a skinny, white, bald guy with a goatee in
his 40s; nothing about him screamed undercover cop, which was probably
the point.
Knight’s offices were average at best, to be honest. I had expected
something more from such a prestigious manufacturer’s corporate
headquarters. Knight was in his late 60s, tall and lean with thinning grey
hair. A nice enough guy.
We sat in the conference room with the South Korean drum sitting on
the table and went over the basic terms of the contract. The whole time we
were talking, making small talk and going over the specifics of the contract,
I was sweating like a whore in church. I was on two state bonds and a
federal one, and I was currently outside the permissible district. “Essentially
Mister Knight,” I said, looking around at my colleagues - including
Flannery, “we’re offering Knight’s Armaments ten dollars per magazine, or
ten percent of the sales price, whichever is greater.”
“Sounds good to me,” He replied. Knight just needed to have the
drums tested, and he would get back with us. It couldn’t have gone better.
Roughly a week later Flannery called to let me know Knight wanted to
meet to do some final live fire testing of the magazine with us present and
sign the contract - he had already conducted the initial testing of the drum
and all went well; Knight was ready to make a deal.
ON AUGUST 20TH OF 2010, Aaron, Jake, Dejan, and I drove to
Brevard County in my Audi A5 and Jake’s BMW 650 to meet with
Flannery and Knight - both the cars were convertibles. We were hauling ass
with the tops down, hair blowing, music blaring, headed to a meeting that
could potentially make me half a million dollars a month profit.
We met Flannery in the parking lot of a Quizno’s restaurant down the
street from Knight’s factory and office. When we exited the vehicle
Flannery asked me, “Did you bring anything to shoot with?”
I hadn’t. I knew as a convicted felon I was prohibited from owning or
carrying a firearm, “No, I...”
“Don’t worry about it,” said the undercover agent, he motioned for us
to follow him and he led our group to his vehicle. “I brought some. Check
these out.” He popped open the suicide door of his older model red pick-up
truck, revealing a 9 mm Glock, an FMAP 7.62 mm semi-automatic rifle and
a Steyr .223 semi-auto rifle. Before I knew it Flannery slapped the Glock
into my hand; I held it, felt the weight of it in my hand... it felt powerful.
Dangerous. Safe. I thought about the first time I held a Glock 9 mm, in the
aisle of Toys ‘R’ Us. I smiled cleared the chamber and said, “Once a gun
runner... always a gun runner.”
The undercover laughed, “You bring any ammo?”
“No.” No one in our group had ammunition. Flannery suggested we
shouldn’t show up without ammunition, and since he had brought weapons
I offered to buy the ammunition. “Sure,” I told the undercover agent, “I’ll
buy the ammo.” I didn’t want to show up to the meeting with Knight empty
handed.
Aaron, Jake, Dejan, and I went to the local Wal-Mart and purchased
nearly $1,000 in ammunition - around 5,000 rounds. I was figuratively
bringing the beer to the party, so I bought an abundance of it. We loaded up
the vehicles and headed back to the restaurant’s parking lot to meet
Flannery.
AS THE AUDI PULLED TO A STOP in the lot, I heard the familiar
screeching of half a dozen unmarked Suburbans and sedans surrounding the
convertible and noticed another dozen Sheriff’s cruisers swarming into the
area, converging on our location. My first thought was, all this for a bond
violation. As the agents poured out of the vehicles they yelled, “Get outta
the vehicle! Hands in the air!”
I got out of the Audi hands held high - I had been through it all before.
An ATF agent ran up behind me and spat, “On the ground!” and slammed
me to the pavement, yanked my arms behind my back and cuffed me.
A second later, Agent McCann, a late 40s Irish-looking military-type
with beady eyes and a receding hairline pulled me to my feet and pushed
me up against a cruiser, “Did you think you weren’t going to prison?” asked
the agent. I stared at him blankly - stunned. “For the Miami thing?”
“I... ah...” I stammered, confused. “I guess so?” My attorneys had been
saying they hoped I would get house arrest or a very short prison sentence,
but I didn’t know for sure.
“Well,” McCann gave me a sadistic grin and snapped, “I’m gonna
make sure of it! You’re a convicted felon in possession of a firearm - you’re
fucked now!” My first thought was, is that illegal? I had been told by the
Judge and my probation officer I wasn’t allowed to own a gun, or keep one
in my home, but no one had mentioned holding or even firing one; not the
court, not probation, not even my attorneys who knew I was handling and
shooting weapons on a regular basis. McCann shoved me into the back of
an unmarked vehicle and grumbled, “This is what you get for selling junk
ammo to our troops.”
CHAPTER THIRTY
 SENTENCING
“You are remembered for the rules you break.” - General Douglas MacArthur

I WAS BOOKED AT THE ORANGE COUNTY Sheriff’s Department

- a grungy, well-used building with dirt-stained walls, covered in wanted
posters. An ATF Agent printed and photographed me. When he cut off my
ankle monitor the officer shook his head and said, “God, you’re in a lot of
trouble Diveroli.” A minute later he showed me a copy of my arrest
warrant, and for the first time I realized what I was facing: my statutory
maximum was ten years. When I saw that I almost puked.
An hour later I was led into a shitty little courtroom for my first
(initial) appearance. I was appointed a public defender who said, “Don’t
talk.” But I was so certain that the arrest was a mistake I stood up and said
to the Magistrate judge, “Your honor, I don’t know why I’m here. This is
obviously a mistake - I don’t own a gun, I only held one... I didn’t know
that was a crime.”
“Mister Diveroli,” responded the Magistrate, “Listen to your attorney
and stop talking.” She remanded me to federal custody and I was led back
to the Orange County holding facility.
I CALLED SHAPIRO and told him I’d been arrested, “Again.” He
recommended Cynthia Hawkins, a former federal prosecutor turned
criminal defense attorney - big mistake.
“You’re not going to represent me?”
“Well no,” he said. “You’re all the way up there in Orlando.” Of course
not, I’d only paid him over $700,000! What was I thinking! Orlando was a
whole four-hour drive from Miami. “Cynthia’s very good, Efraim.”
For as much good as Cynthia Hawkins did me, in my opinion she
might as well have been an acting U.S. Attorney. When we met in the
visitation room, Hawkins said, “Doesn’t look good for bond,” before she
even sat down. Of course I was already out on federal bond in Miami and
the two state bonds for my DUIs. “We can try.”
 “Look,” I said, “I didn’t know I wasn’t allowed to hold a gun.”
Hawkins smirked, “Uh huh,” and scribbled ‘Didn’t know he couldn’t
hold a gun’ on her yellow legal pad.
AT THE BOND HEARING, the following day, my federal probation
officer told the Magistrate, “If you give Mister Diveroli bond we’re just
going to re-arrest him for violation of his bond conditions in South Florida
anyway.” Needless to say, I didn’t get a fourth bond.
WHEN MY MOTHER FOUND OUT, she was so angry she wouldn’t
talk to me, she wouldn’t even come to the jail to visit me. In any other
situation I’d have laughed it off, taken a shot, snorted another line, or
popped a Xanax and told myself, she’ll get over it. But sitting in that jail
cell, thinking about all her calls, my mother’s pleas and warnings, and all
the times I had ignored her... all I wanted at that moment was to hug my
mother, to hear her tell me she loved me.
It took her two weeks to break down and visit me; it was horrible. The
Orange County jail didn’t have contact visits; we had to talk via closed
circuit monitor. All I wanted to do was hug her, and all I could do was cry
on the phone and weep into the monitor screen. I was in this sterile
individual visitation room - not much bigger than a closet. She didn’t
scream at me, she seemed so defeated, so tired, so disappointed; that was
worst of it - my biggest fear - that she would abandon me. “I know this isn’t
what you want,” she said, wiping tears out of her eyes, “but it’s probably for
the best that you’re in here.”
“I’m in jail, mom!” I shouted into the phone. “How can you say that?”
“At least you’re safe.”
“Safe?” I was surrounded by gang members, drug kingpins, bank
robbers, kidnappers, and even murderers. “This place is filled with violent
criminals... I wouldn’t exactly say I’m safe.”
At a subsequent visit I started to soften my stance, my tone, and I
started to understand her position, to see more clearly. She had been
struggling to get me off drugs for so long that she saw this as her chance.
“I’d rather visit you here than in a graveyard...” she said, “cause that’s
where you were headed.”
“Maybe... maybe.” My childhood friends, my employees, my business
associates... none of them had come to see me. Just my family and the
attorneys. I called my ex-girlfriend, Jenna, who I’ve never stopped thinking
about. When she heard the automatic prison system say, “You have a call
from Efraim Diveroli,” she screamed, “Ohmigod!” and hung-up the phone.
Not a good sign. I recently heard she gained 30 pounds and married a fat
guy who owns a gym, so I’m probably better off she didn’t answer the call.
THERE WERE SEVERAL MEETINGS WITH HAWKINS, lots of
discussions about my options, but in the end she said, “Entrapment is your
only real defense and it’s virtually impossible to prove, considering you
were clearly predisposed to handling a weapon... You don’t really have a
choice; they’ve got video and multiple witnesses. You plead guilty or lose at
trial and get slammed.”
I signed a guilty plea in October of 2010, and several months later, I
was transported to the Miami Federal Detention Center for my sentencing
in the Miami fraud case.
ON JANUARY 3RD OF 2011, I was led into the court. It was packed
with press, my parents and siblings, and my extended family, Shapiro,
Srebnick, Hawkins, and several of my other attorneys. Oh yeah, there were
also a couple Assistant U.S. Attorneys that wanted my head.
The Judge, Joan A. Lenard, peered out at the army of attorneys and
said, “We are here for the sentencing of both the corporation AEY, Inc.
and... Mister Diveroli... there’s an objection regarding acceptance of
responsibility.” Because I had been arrested in the Middle District of
Florida by the ATF and received an additional charge while on bond, the
Southern District’s U.S. Attorney’s Office refused to recommend a lenient
sentence. On top of that they wouldn’t grant me two levels off my
sentencing calculation for “acceptance of responsibility,” which they
basically give to everybody who agrees to plead guilty and doesn’t opt for
trial. Those two levels represented eight to 12 additional months of
incarceration.
However, Shapiro was allowed to argue the Government’s refusal,
“Your Honor, AEY, through its president, Mister Diveroli... has fully
cooperated with the Government and, indeed, accepted responsibility for his
actions... [H]e told them how he first found out that the ammunition [was
Chinese]. He sent e-mails... to the State Department to find out whether or
not it was permissible.” And after they told me it wasn’t, I had two choices.
“[H]e chose the wrong one... And he chose to violate the law, and he
admitted that to the Government. But Mister Diveroli did not want to fail
himself... He didn’t want to fail in being able to provide what the
Government had asked him for.”
 When Shapiro was finished, Hawkins asked to address the Court; she
felt she could shed some light on the acceptance of responsibility issue. “I
was an AUSA for twenty years plus in the Orlando office... In that case [the
Middle District of Florida arrest] it was an undercover sting case and there
were many recordings made... [T]he undercover agent asked Mister
Diveroli to do several things he declined to do.” The agent asked him to
violate ITAR. He declined. He asked him to leave the Southern District. He
declined. He asked him to bring a gun to the meeting. He declined.
“Eventually,” said Hawkins, “the agent said, ‘If you don’t come up here -
this is a ten million dollar deal - you’re not going to get the deal.’ [Your
Honor] he was persuaded to leave... I just wanted the Court to know that he
was trying to do a legal deal. And he did do something illegal, and he
accepted responsibility for it. But that wasn’t his primary mission.”
Hawkins sat down and Shapiro called Rabbi Lipskar, an overweight
gentleman in his late 60s with a long grey beard; Lipskar is one of the
founders of Aleph, an organization that works with Jewish inmates on
spiritual issues and re-entry into society. “In almost thirty years of working
in the prison environment [this is] the first time I said to a defendant, ‘You
need to go to jail,’” I remember thinking, Nice. “Efraim is one of those.
Brilliant persons. A mind that far exceeded his maturity and extroversion
that came from a... lack of security, deep sense of insecurity, a lack of
personal pride. Had to prove himself, had to be the loudest voice, the
biggest partier, the flashiest guy. It came easy to him.” The Rabbi looked
back at me and gave me a weary smile. “I believe that we can save this
person... I’m not talking about saving a Jew for Jewishness. We’re talking
about saving a person for humanity. I think he needs to spend a little bit
more time in prison. But five years…? There is a diminishing return, in my
experience... you start becoming a prison person.” Lipskar sighed, “If I can
be of any help or my organization can be of any help, we’re here to do so.”
My Uncle, Rabbi Shmuley Boteach - a celebrity Rabbi, successful
author, and dynamic speaker known professionally as Rabbi Shmuley, in his
late 40s with a tightly trimmed beard - spoke a little about his successes and
failures, and of course mine. “Efraim is my nephew. He’s my flesh and
blood... My sister was always the most selfless noble of the entire family.
She is known as a saint in the community here in Miami Beach. On
February the 6th, she will be honored by AMIT, an organization that raises
money for orphan children in Israel.” He spoke about the elderly couple my
mother took care of and several of her other charitable acts. “All she ever
wanted him to do was honor the Sabbath... be respectful to his elders... lead
a religious and spiritual life. She has been devastated beyond description by
his actions.” He talked about the countless calls regarding my behavior; my
father’s inability to support his family that my uncle believed led to my
insecurity and excessive behavior; my greed and the lure of the amoral arms
industry. “His mother used to badger him and berate him constantly to be
better. She never cared for any of his success. There’s a famous Jewish
expression that says that the difference between the wise man and the clever
man is that the clever man can extricate himself from situations into which
the wise man would never have gotten himself into. My nephew has
discovered today that he is neither clever nor wise... [We fear] if the
sentence... is excessive, your Honor will snuff out the light of a bright soul
who might... truly contribute. Thank you for considering my petition for
leniency, your Honor. May God bless you.”
Assistant U.S. Attorney Fernandez stood to speak on behalf of the
Government, “[T]here’s a pattern of continuous violations of his conditions
on release,” she said, “... positive testing of cocaine... numerous failures to
report. [T]here’s continuous evasion and disregard for the law.” That pretty
much covered it.
“Oh, okay...” grunted the Judge, “what Rabbi Lipskar said: [Mister
Diveroli] had to go to jail. He needed to go to jail. He had to be in jail.
[N]ow that he is in jail, he is accepting responsibility. So in the exercise of
my discretion in considering all of the factors under 3E1.1, I’m going to
grant him the two levels for acceptance of responsibility...” That gave me a
level 24 and a criminal history of one: the advisory guidelines range of 51
to a statutory maximum of 60 months.
When my mother addressed the Court, I was truly worried; there was
no predicting what she would say. “Hi, Judge Lenard... I’m Efraim’s
mother.” She started by telling the judge she had taught me to be an
upstanding citizen; she told her a little bit about herself and our family, and
I thought, this is going pretty well. Then, from out of nowhere, my mother
said, “I knew he was doing alcohol, drugs, gambling. I even called your
office once... I wanted him to go to jail.” I couldn’t believe what she was
saying, I wanted to scream for her to stop, but I had to sit there and take it.
“...I know every time I say that he hates me for saying it, but I love my son
more than anything in the world. And he needed to go to jail.” Nice.
 She was really sobbing and I knew she meant well, but it still hurt. She
talked about Marchman Acting me for my drug use. “[My sister and I]
pulled him out of Hard Rock one night. I went back the next day and made
him sign his name to not gamble anymore.”
She tried to clean up the damage by saying, “...Efraim really is a good
boy with a good heart and he really needs another chance... he could really
be a good member of society.”
After listening to my mother tell the court, I needed to go to jail, the
judge looked down at me and asked, “Mister Diveroli, is there something
you wish to add?”
My voice cracked a little when I addressed the Court. “[In my short
life] I’ve probably done more things than most people would dream.” I told
the Judge, if I had another chance I would have done things differently, and
I was truly sorry for the things I’d done... my behavior... embarrassing my
family. “The money, the notoriety in my industry, and the good times... and
there were some... [They weren’t] worth the suffering that I’ve endured and
my family has endured as a result of my actions.”
Srebnick talked about my mother’s anguish, about my drug use and my
arrest, my time in jail and my realization that I had to change my behavior.
“[W]e leave it to your wisdom, Judge... given what you’ve heard about him,
the potential he has, we ask you to find that point for us so that his life will
be better and so that we can have Efraim back with clarity of thought,
health, and productivity. Thank you, Judge.”
When Fernandez made her summation, she wasn’t happy at all with
the way things were going, “Your Honor,” she said, clearly frustrated, “[the
Government asks you to] consider sentencing the Defendant within the
context of the... guidelines range.”
The Judge asked Srebnick and Shapiro to stand with me for
sentencing. “[T]he Defendant... participated with others to sell Chinese
ammunition he and his Co-conspirators knew full well that such
ammunition was prohibited by this large contract... a three hundred million-
dollar contract. If it weren’t so amazing, you would laugh that such a young
man would obtain such responsibilities... Mister Diveroli may have been
clever, but not wise... [Then] he got involved in more criminal activity,
more drugs, more alcohol, more gambling, more torture for his mother and
family.” She wrestled with the decision for a minute and said, “I find that a
sentence of incarceration of forty-eight months is sufficient for punishment
and deterrence.” She ordered me to pay a $250,000 fine and restitution of
$149,279.28. She ordered AEY, Inc. to pay a fine of $500,000 and
restitution of $149,279.28 and a special assessment of $400. “Mister
Diveroli...” said the Judge, just before the proceedings were over, “it is all
up to you.”
WITHIN DAYS I WAS TRANSFERRED back to Orlando and on
August 23rd of 2011, I was back in court for my Orlando sentencing. The
courtroom was filled with my family and press. Hawkins was there with her
legal pad and stacks of files. The U.S. Attorney for the Middle District,
Bishop Ravenel, this tall country boy type with salt and pepper hair, and
several other Assistant U.S. Attorneys were sitting around the defense table
snickering and grinning. They all looked so pleased with themselves.
The first thing the U.S. Attorney did was put several of my
“employees” on the stand to say derogatory things about me and smear my
name. Aaron and Jacob Shprecher testified that they had gone with me to a
gun range and fired several weapons. That I had asked them to purchase
weapons on my behalf for companies I had asked them to open. They said I
was actually running the companies, which to a degree was true, but I had
the blessing of a prominent DC law firm to do so. The thing is - I
understood Aaron and Jacob had been threatened with prosecution by the
U.S. Attorney’s Office - for God knows what - so I understand what they
did. They were scared. Hell, I was scared.
It was Dejan who bothered me. I really thought we were friends. When
he got on the stand, Assistant U.S. Attorney Ravenel asked him several
harmless questions, and one that disturbed me: “What consequence [have
you] had personally as a result of being involved with Mister Diveroli?”
“Many things,” said Dejan, glancing at me. “My bank account was
cancelled. Reporters are calling me every day, all day... I was trying to
apply for a loan to do something. I didn’t get any loan because my name is,
you know all around the news and Google.” There was no reason for him to
testify or to be angry with me I had been a good friend to him, but when
things went bad for me he abandoned our friendship.
Hawkins asked him, “Isn’t it true that you continued to work for
Mister Diveroli long after the negative publicity?”
“Yes,” he admitted.
She looked at her notes, “Didn’t [Mister Diveroli] pay over ten
thousand dollars for a family funeral in Bosnia? And help to support your
family over there for years? And support your family because your father
was in prison?”
“Yes...” he said, looking a little bit ashamed. Hawkins excused him
and Dejan stepped off the stand. I had genuinely thought this guy was my
friend. There was a time I would have done anything for him. I thought he
would do anything for me.
Based on the Federal Sentencing Guidelines my base level offense
level should have been 14 - roughly 15 to 21 months of imprisonment - but
Assistant U.S. Attorney Ravenel added three levels because I was on
federal bond at the time of the Orlando arrest, and an additional six levels
because of the type of weapons used to “commit the crime,” and two more
levels for the amount of weapons - which, of course the ATF agents chose
and brought to the meeting in a no-holds-barred effort to manipulate my
ultimate sentencing range upward! However, the judge had the option of
running my sentence concurrently or consecutively with my 48 month
Miami sentence, so it was possible I could end up with effectively no
additional time. Unfortunately, after I received what the Orlando based U.S.
Attorney felt was a light sentence in Miami, he and the agents decided to
throw several enhancements into the mix. Suddenly, ATF agents Daniel
O’Kelly and Kevin McCann remembered that they had brought high
capacity magazines, which raised my offense level by six additional levels.
That brought my offense level to 25, minus three levels for “acceptance of
responsibility” and “pleading timely.” I ended up with a total offense level
of 22 - roughly 41 to 51 months.
Luckily, or so I thought, my attorney had the right to argue the
enhancements. She called the undercover ATF agent and asked him about
the meeting place. “How many times did Efraim Diveroli tell you that he
did not want to come to the Middle District of Florida... three times?”
“It could have been three times?”
I had told him I was out on bond on my Miami case, and he
specifically went out of his way to get me to come to Brevard County in
order to violate my bond and get me into his jurisdiction and to get me an
additional enhancement. “...yet you still told him at least three times... to
come to the Middle District of Florida, didn’t you?”
“Actually no... I told him if he wanted to meet [Mister Knight] ...he
needed to come to see that man...”
 “Did you ask Mister Knight whether or not he knew of AmmoWorks,
or AEY, or Mister Diveroli?”
“The name was brought up and, as I recall, he had never heard of
him.” I wasn’t sure how that was possible, since I had been taking business
from Knight - sniper rifles and rail systems - for years… not to mention all
the negative press and notoriety I had received within the industry as a
result of the Chinese ammo debacle. I had even heard from several other
defense contractors at two different trade shows that Knight had
badmouthed me and mentioned my name on several occasions. I can’t
imagine he didn’t know who I was.
“Isn’t it correct that [you needed] Mister Diveroli to travel to Brevard
County [to] have venue [in the Middle District]?” I hadn’t broken any laws
in the Middle District of Florida so the ATF and the U.S. Attorney in the
Middle District had to create a crime in their jurisdiction to prosecute me.
“He said he was a felon in [possession of a firearm in the Southern
District].” But that wasn’t enough to charge me with anything. They needed
to get me to the Middle District.
“[You] actually arrested him for picking up two guns that you
brought... correct?”
“I couldn’t tell you... [it] was being directed by the U.S. Attorney’s
Office in correspondence with the case agent.” After some posturing,
O’Kelly admitted, “I did have a discussion with Agent McCann that
confirmed... [the case] would be prosecuted in the Middle District...” It was
obvious to everyone in the courtroom that the U.S. Attorney and the agents
wanted me arrested in their district so the Middle District U.S. Attorney
could prosecute me.
“Actually,” said Hawkins, “[all] he was trying to do was set up a deal
to have these magazines branded by Knight Armaments, correct?”
The agent sighed, “Correct.”
“[H]e told you several times... he didn’t care about this other stuff
[firing the weapons]...” Agent O’Kelly was the one that actually suggested
going to the range. “[Efraim Diveroli] said, ‘I’m not [going] there to play
with toys; I’m [coming up there] to make a business deal.’ Do you not
recall that conversation?”
“I do.”
She then switched to the high capacity magazines. “Where in your
report does it say that you had the magazines... it’s not in there that you
brought any magazines... you didn’t take any pictures either? [I]n fact,
Mister Diveroli did not know you were bringing guns that day, did he? [In
fact] he said, ‘I’m coming up there for a business deal’ right?”
“He made that statement at one point,” admitted the agent. Not only
did I not want to travel to the Middle District, but I didn’t bring a weapon
nor did anyone with me, and I specifically told the undercover agent I didn’t
want to shoot. Hawkins excused him and the agent stepped off the witness
stand. Hawkins reviewed her notes for a few seconds and asked to cross-
examine Agent McCann, as well as the Lead Case Agent.
When the agent got on the stand, it was obvious he couldn’t stand me.
Hawkins asked several questions, all of which he gave vague snide answers
to. He testified that in his opinion the Southern District of Florida’s U.S.
Attorney’s Office had downplayed the amount I had “defrauded” the
government out of. “The government had paid out sixty-six million dollars,
and Mister Diveroli defaulted on that contract,” he spat. “[T]o provide
military items, firearms, ammunition, helmets, bulletproof vests to the U.S.
military, Iraqi allies and the Afghan allies... and unjustly enriching himself.”
I hadn’t done any of those things. Not one.
The guy not only started the investigation for all the wrong reasons, he
clearly hated me for all the wrong reasons. He thought I was ripping off the
Army and endangering the troops.
Hawkins asked the agent, “Now you’ve said that you thought there
was a sixty-six million dollar loss in the Southern District of Florida... Are
you aware that [based on the Southern District’s Pre-Sentence Report] there
was no loss to the government?”
“I’m not sure...” he looked shocked, and immediately glanced at the
Assistant U.S. Attorney for help or guidance, but Ravenel didn’t offer any.
“I just have learned that sixty-six million dollars was paid on [the
Afghanistan] contract.”
“...Mister Diveroli defaulted on five [Department of Defense] contracts
out of 150 that he had... Of those five, are you aware that Mister Diveroli...
was found not to be in default; that those were... ultimately terminated for
the convenience of the government?”
“No...” he said, glancing around, like a child caught in a lie. McCann
mumbled, “He was found guilty in the Southern District... for doing that.”
Hawkins excused the agent and he slinked off the stand.
 This guy had received a tip, read the New York Times article, and
decided he was going to make sure I went to prison.
When my mother stood up, I thought, God help me. There are no
atheist defendants. “Your Honor...” she said, and tears immediately started
running down her cheeks, “[I raised Efraim] to stay close to God, to be
honest, to be law-abiding, to be respectful... [Unfortunately], he was thrown
out of private school for smoking marijuana and I sent him to my brother...”
She told the Judge she didn’t approve of my friends and thought LA would
do me some good, but it didn’t. Nothing would have. There was nothing she
could have done; she had made all the right decisions. She had said all the
right things. She had been as good of a mother as anyone could have had,
and I’d been a shit of a son to her; for that alone I deserve every day I had
been sentenced to. “[A]t a very young age, Efraim made a lot of money...”
she sniffed back her tears and said, “that money just fueled [his] alcohol and
drug addiction and gambling addiction... when Efraim was arrested in
Orlando... I felt like God was on my side, because I knew the arrest saved
his life.”
My mother looked back at me, gave me a weary tearful smile, turned
to the Judge and said, “He was like a reckless train and nobody could help
him because he had all that money,” she wept and sniffled. “His money was
a curse... It’s not that I don’t think Efraim should take responsibility for his
actions... I just hope you’re as lenient as possible, [Efraim can] be a
productive citizen... [T]hank you very much for listening to me.”
Hawkins argued in front of the Judge, “[T]he defendant did not bring
any weapons to the meeting. He brought none. These were brought by the...
the federal agents.” She pushed up her glasses and made some comments
about the ATF’s meticulous notes of all the items brought for the sting. “...I
don’t know when somebody decided that there were [high capacity]
magazines there, but... there’s no documentation of it... guns or magazines,
to enhance his sentence, and this is six levels. ... [It’s] manipulative, and our
position is that the Court should not enhance his sentence under this
provision.”
The Judge disagreed and gave me the enhancement.
My attorney then argued that the agents unfairly encouraged and
coerced - in my opinion, entrapped - me to leave the Southern District and
get jurisdiction, in order to give me more time. But the judge was
unconvinced.
 “[Your Honor] ...I just can’t imagine charging the possession of the
guns by picking it up and putting it down,” she said in my defense. “Was he
selling guns? Was he trying to hurt anybody? No...”
Assistant U.S. Attorney Ravenel then vilified me by saying, “The
supply officers said they received poor quality junk. They said it was
hurting their mission... describing his way of doing business was bait and
switch... entering into a contract to provide one thing, and then providing
the cheapest, lowest quality substitute.” Yet, they signed off on everything
and ordered more. Ravenel and the agents made the sentencing about
everything but what I actually did. “He had several bond violations, and had
been arrested twice... he put three people in harm’s way [Dejan Djric,
Aaron, and Jacob Shprecher]. He picked them and he used them.” I’m still
not sure how I used them. “... He’s manipulative and antisocial... I’m asking
you to run [the sentence] consecutive to the other unrelated conduct in
South Florida that’s already been imposed.” That would be a total of eight
years.
When I stood up to speak my knees were weak. “I’m so ashamed that
today is the most important day of [my] life... not a wedding or a child’s
birth,” I really was upset, and I really did want to change. I do want to
change. To be a better son. A better brother. A better person. I’m damn sure
going to try. “I’ve got a mother who drives here every week to see me... I
took everything for granted when I had it... I had everything in the world...
And all those friends that I had... back then, a lot of those people that came
up and testified today were at one point some of my closest friends... My
mind is made up about how I want to lead my life going forward. I have no
desire to slip back into that life that I lived. That person is dead... or he’s
rapidly dying... Thank you, Your Honor.”
The Judge looked down at me and bobbed his head in understanding.
“Mister Diveroli is a difficult case,” he said. “Yes, he was young at the
time, but somewhat experienced as well. Yes he was addicted to drugs and
gambling... [T]he real question to me comes down to, who is the real
Efraim Diveroli?” He talked about my remorse and said, “The more serious
the offense, the greater the need to deter others from committing similar
conduct...” The Judge looked straight in my eyes. “I think he’s smart
enough not to re-offend... smart enough to know better...” he took a deep
breath and ordered, “[I]t’s the judgment of the Court that the defendant,
Efraim Diveroli, is committed to the custody of the Bureau of Prisons to be
imprisoned for a term of 48 months, 24 months of which are concurrent to
the sentence imposed in Miami and 24 months to run consecutive to the
sentence.” That’s at total of 72 months, or six years, in prison. When the
Marshals walked me out of the courtroom I remember looking back and
seeing my mother crying in the front row. My entire family was crying.
A FEW WEEKS LATER I was shackled, handcuffed, chained up,
placed on a bus, and transported to the Federal Correctional Complex in
Coleman, Florida. When we arrived at the prison, you would have thought
the Marshals were transporting terrorists and serial killers. Six Marshals
stood around the perimeter of the bus holding shotguns as we - me and
seven other inmates - were walked into the Low security prison.
Having never been to a prison before, I had visions of being locked up
with mobsters, bank robbers, terrorists, drug cartel members, and political
prisoners. I couldn’t have been more wrong; the Low is populated with
roughly 2,000 low-level drug dealers, pedophiles, and an assortment of
white-collar criminals. There are few stabbings or riots at the Low, but there
is violence here - fights and beatings are common.
THE FEDERAL BUREAU OF PRISONS comprises roughly 230,000
inmates, with a staff of nearly 42,000 employees - almost 20,000 of them
are COs (Correctional Officers). Not all, but the majority of COs ended up
working as prison guards because they couldn’t handle the discipline of the
military or pass the county, state, or federal law enforcement civil servants’
exams. Essentially, if there weren’t prisons, these people wouldn’t have
jobs.
The Federal prison system is currently at 130 percent capacity. They
have us crammed in here like Kalashnikov rounds in a hermetically sealed
spam can - roughly 180 inmates occupy units with a maximum capacity of
129, sleeping in three-man rooms designed for two. I spend most of my
time waiting in lines - not being rehabilitated… but waiting in lines. Lines
to be fed, lines to pickup and drop-off laundry, lines to use the restroom or
the legal library... you name it, there’s a line for it.
THE FIRST NIGHT WAS THE WORST; once the incessant mindless
chatter of my fellow inmates stopped, I lay on my filthy cot and took a long
hard look at my situation. I’m in prison for making a “false statement,” or
lying - which I didn’t do - regarding the Chinese ammunitions’ point of
“origin” or departure point - Albania, which is precisely the answer every
defense contractor in the industry would have given.
 I was a high school dropout-turned-international arms dealer, and
became a self-made multimillionaire by age 18. By 21-years-old I had
landed nearly $400 million in weapons and munitions contracts for the U.S.
Government. I may have been a rebellious kid, but I overcame my
obstacles, worked hard, built my business, and enjoyed my
accomplishments: an American success story. Life was good, until some
self-righteous New York Times reporters manipulated the facts to embarrass
the U.S. Army and the Bush Administration by stating “the American
military has relied since early last year on a fledgling company led by a 22-
year-old man whose vice president was a licensed masseur” and that AEY,
Inc. was providing “[unreliable] decaying ammunition” procured from
“scrap heaps of abandoned Soviet arms.” Not one fucking round didn’t fire!
Not one!
The U.S. Army Memorandum read, “The ammunition (from AEY and
others) received by the ANA [Afghan National Army] and ANP [Afghan
National Police] has been of good quality... Afghanistan region reported
they have not received any complaints from ANA or ANP concerning the
quality of ammunition received.” Yet the Defense Criminal Investigation
Services agents and the Southern District of Florida’s U.S. Attorney
decided to pursue the case, even after learning the allegations were false,
and the pre-embargo Chinese ammunition was legal to sell.
Shapiro once told me, “The government doesn’t like to be
embarrassed” and “If they investigate you they’re going to find a crime...
even if they have to manufacture it.”
At worst, I’m guilty of a civil violation of my Department of Defense
contract - that’s not a criminal offense. There are numerous defense
contractors who have committed much more egregious violations and
received no more than a fine. Had the New York Times and the U.S.
Government not twisted the facts, I simply wouldn’t be here. So instead,
I’m held captive by the Federal Bureau of Prisons, for what should have
merely amounted to a lawsuit - at best.
And possession of a firearm by a convicted felon? The ATF agents
brought the weapons to the scene of “the crime” - come on, it was
entrapment! I’m not suggesting my hands are clean, but I did not commit
fraud against the U.S. Government. When “Big Brother” twists the facts to
prosecute citizens that haven’t committed crimes just to save face, this isn’t
the country I thought it was, and I doubt it’s the country you think it is
either.
At one time, I was the U.S. Government’s go-to-guy for weapons and
munitions for the Iraq and Afghanistan Security Forces - one of the largest
suppliers of munitions in the war on terror - until the Pentagon turned on
me and made me the fall guy. I love my country and I’m a proud American,
but the government fucked me. They’ve stripped me of everything: my
livelihood, money, youth, liberty, and my freedom. I found out the hard way
that there’s a thin line between the American dream and the American
nightmare. Land of the free, home of the brave? Not from where I’m sitting.
Sometimes, late at night, I wish I’d had a clear head, the right advice, and
the guts to go to trial.
Maybe in some odd way I deserve what’s happened. Maybe it’s my
penance for not treating my family better or being respectful of my mother
and father, for not being a better Jew and showing the proper humility to
God. Maybe I’ll never know why; between the time I spent on bond and my
six years of incarceration, this saga will have taken up the majority of my
20s. With time off for good behavior, I could be released in November of
2015 - I’ll be 29-years-old, older and wiser from the experience, but still
young enough to make a comeback. I don’t know what the next adventure
will be, but I’m keeping an open mind.
You know what they say, once a gun runner...
EPILOGUE
 I was released to a federal halfway house in August 2014. It’s good to
be back.
Ralph Merrill was a true soldier; he refused to take a deal and ended
up going to trial on September 14th of 2010. On October 15th of 2010, a
mistrial was declared after the jury was unable to reach a verdict.
Unfortunately, on November 22nd of 2010, the government retried Ralph,
but this time the jury convicted him on 33 counts of Major Fraud Against
the United States - a damn shame. On March 22nd of 2011, Ralph was
sentenced to 48 months of imprisonment.
David Packouz and Alexander Podrizki - both of whom pleaded guilty
in May of 2009 - were sentenced on January 13th of 2011. For their
cooperation in helping to convict me and Ralph, Packouz was sentenced to
14 months’ probation, and Alex was sentenced to 10 months’ probation.
It’s my understanding that Packouz is still struggling to make a living
as a masseuse amongst other things; in November of 2012, he was arrested
for prostitution after offering to have sex with an undercover Collier
County, Florida deputy for $400 - a male undercover deputy. Now if
Packouz is working as a part-time prostitute, God only knows what Alex is
doing to make ends meet.
As for Milton Blane, owner of Blane International Group - the man
who falsely accused me of buying Chinese AK-47 assault rifles, which
sparked the DCIS and ICE investigation into AEY, Inc. - he recently sued
Boeing for branding Blane as an illegal arms dealer, costing him millions of
dollars in lost business - Blane was awarded $3.5 million in punitive
damages. Unfuckingbelievable!
Reed Knight, the owner of Knight’s Armaments - the guy who helped
the ATF set me up on the bullshit gun possession charge - was recently
placed under investigation by DCIS and the FBI, believe it or not, for
fraudulent business practices and allegations of bid rigging. Let’s hope the
justice system is as fair to Knight as it’s been to me.
And Heinrich Thomet, using shell companies and proxies, is still
working in the international defense industry, brokering weapons and
munitions between the United States, Iraq, Zimbabwe, the Philippines,
Serbia... the list goes on and on.
 Heinrich is the arms business’s equivalent of “Typhoid Mary”:
everyone around him manages to catch an indictment, yet Heinrich remains
immune to prosecution. In 2013, Colonel Shmuel Avivi, the former Israeli
Defense Minister, was convicted of Breach of Trust for accepting bribes
from Heinrich in exchange for lucrative weapons exports and arranging
favorable contracts.
Boro Vucinic, Montenegro’s Minister of Defense, is currently
answering questions regarding “a gift of gratitude” for peddling NATO-
standard assault rifles sold by one of Heinrich’s companies.
Hell, Heinrich’s old buddy, Victor Bout, “The Merchant of Death,”
was arrested by the DEA - of all agencies - for conspiring to provide the
Colombian terrorist organization FARC with 700 surface-to-air missiles,
5,000 AK-47 assault rifles, anti-personnel land mines and C-4 explosives,
night-vision equipment, and several ultra-light airplanes and unmanned
aerial vehicles. Bout was convicted in a Manhattan federal court for
Conspiring to Kill U.S. Citizens and Officials, Delivering Anti-Aircraft
Missiles, and Providing Aid to a Terrorist Organization. Yeah, Bout is doing
a 25-year sentence in the Federal Bureau of Prisons for that one.
Heinrich, however, is still walking around creating potential future
indictments for his conspirators, despite being on the State Department’s
watch list for six years, and weathering investigations by the CIA (Central
Intelligence Agency) and the DDIA (Defense Department Intelligence
Agency). Nothing seems to stick to him - either the CIA and DDIA are
incompetent, or Heinrich’s $7,000 custom tailored suits are made of
Teflon... only time will tell.
I’ve heard that my uncle Bar Kochba Botach has grown Botach
Tactical and that the business has become more organized, and a lot more
successful. Looking back, even though he and I didn’t see eye to eye, my
time in LA was instrumental in preparing me for successfully operating my
own company... and after all - family is family.
As for me, on average, someone from my family comes to see me once
a week; sometimes it’s my father or my brothers, but mostly it’s my sister
and - of course - my mother. They wake up at four o’clock in the morning,
drive for nearly five hours to this podunk town of Coleman, Florida, and go
through the humiliation of being poked and prodded through security by the
thuggish, inbred correctional officers that run this facility for the
opportunity to see me.
 My family has had numerous problems trying to visit me; once the
COs accused my brother of being on drugs - which he wasn’t - after he fell
asleep in the waiting area. He answered the rude COs questions - explained
he was exhausted from the drive - but eventually my brother got frustrated
and made sarcastic comments about anti-Semitism, so they suspended his
visitation for six months. On several occasions my sister has been asked to
change her clothes - once because she had on blue, once because she had on
khakis, once she wore a skirt, which fell one inch below her knees - one of
the COs said it was too short. She was forced to drive to Wal-Mart and buy
a cheap dress, which fell three inches below her knees, in order to get into
the prison visitation room to see me. The COs all find humiliating the
inmates’ families funny. So, because my family still loves and supports me,
the BOP subjects them to ridicule and abuse.
My sister Avigail and brother Aaron are heroes. I never had a
connection with them growing up because they were young when I started
getting into business (and trouble), but they - along with my mother -
stepped up and visited their older brother in prison on a regular basis. It
couldn’t have been easy.
It’s strange: the people I treated the best, my good buddies, girlfriends,
and associates all evaporated the moment I was incarcerated, but my family
- the people I treated the worst - are still around. God knows why, but for
some reason they just won’t give up on me. I’m not complaining, I’m just
sayin’.
EFRAIM DIVEROLI
Efraim Diveroli is an American businessman, entrepreneur, author, and former international arms
dealer. As president and sole shareholder of AEY, Inc. he was a major weapons contractor for the
Pentagon. Between 2003 and 2008 his company was awarded and executed on over 150 contracts
with various branches of the United States Government.

For more information on Efraim Diveroli, including pictures, documents, and updates visit:
www.efraimdiveroli.com
www.onceagunrunner.com
 ©2012-2016 EFRAIM DIVEROLI

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 Table of Contents
PROLOGUE
CHAPTER ONE
CHAPTER TWO
CHAPTER THREE
CHAPTER FOUR
CHAPTER FIVE
CHAPTER SIX
CHAPTER SEVEN
CHAPTER EIGHT
CHAPTER NINE
CHAPTER TEN
CHAPTER ELEVEN
CHAPTER TWELVE
CHAPTER THIRTEEN
CHAPTER FOURTEEN
CHAPTER FIFTEEN
CHAPTER SIXTEEN
CHAPTER SEVENTEEN
CHAPTER EIGHTEEN
PICTURES
CHAPTER NINETEEN
CHAPTER TWENTY
CHAPTER TWENTY-ONE
CHAPTER TWENTY-TWO
CHAPTER TWENTY-THREE
CHAPTER TWENTY-FOUR
CHAPTER TWENTY-FIVE
CHAPTER TWENTY-SIX
CHAPTER TWENTY-SEVEN
CHAPTER TWENTY-EIGHT
CHAPTER TWENTY-NINE
CHAPTER THIRTY
EPILOGUE
EFRAIM DIVEROLI