The judicial curtain has closed on one of the most bizarre sagas in arms dealing. In late August, Miami Beach's Efraim Diveroli pled guilty to one charge of conspiracy for breaking an embargo against Chinese arms; over 80 other federal charges were thrown out in the plea bargain. The 23-year-old gun-runner and president of Miami Beach arms firm AEY, Inc. faces up to five years in prison and a $250,000 fine.
In 2005, at age 19, Diveroli inherited AEY from his father. Its new teenaged president quickly turned the company, based out of a single office suite, into a major geopolitical player. In early 2007, it got a $300 million contract through the Pentagon to supply the Afghan government with ammo for tanks, bazookas, and other weapons. AEY plumbed Albania's decrepit arms stockpiles, which had been bequeathed to the country decades earlier by Chairman Mao (and had been marked for destruction by NATO).
The Pentagon has an embargo against Chinese-made arms; so AEY removed
the ammo from canisters marked 'Made in China' and shipped the stuff
anyway -- at an extreme mark-up price. But in March, 2008, an arms depot
where repackaging was going on exploded with the force of a small nuke.
A few weeks later, The New York Times exposed AEY's rip-off scheme and
released a peculiar tape on which Diveroli alleged corruption in
Albania "went up to the prime minister and his son."
Things only got stranger from there. The businessman who recorded the
tape was found dead in Albania. Diveroli and three associates were indicted. One man, then-26-year-old David Packouz, had been a
massage therapist while at the same time serving as AEY's
vice-president. After his arrest, he went into the record business and
cut an acid-rock album about peace and love. (Like Diveroli, he pled
guilty on one count.)
After his own indictment, Diveroli essentially
changed the name of AEY to Ammoworks and continued selling massive
quantities of heavy caliber ammo in Miami Beach. Ammoworks even bragged
about supplying the government. Many months after he was arrested
and banned from defense work, the U.S. government paid Diveroli $10
million on two contracts.
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can look forward to prison time, his freshly obtained millions
-- Penn Bullock