Three men were arrested for mass murder in what local media dubbed "Albania's Hiroshima." Two of them were alleged accomplices to a 23-year-old Miami Beach-based arms dealer named Efraim Diveroli, who faces trial later this year on 83 counts of fraud and conspiracy for procuring Chinese-made ammo in Albania and selling it to the Pentagon.
The charges may be hard to prove, though. A potential lead witness in the case, Kosta Trebicka, died mysteriously in September. His body was found bloodied and sprawled across a dirt road in eastern Albania, some 50 yards from his slightly dented SUV. Trebicka had recorded a tape (played in the YouTube clip below) in which Diveroli said corruption in that country "went up... to the prime minister and his son."
The phone call between Efraim Diveroli and Kosta Trebicka:
Indeed, last week, federal prosecutors retreated, allowing the return of $4.3 million of Diveroli's property — including a new Mercedes 550 — that had been confiscated. Perhaps even more significant, Diveroli is out on bail and a company he owns called Ammoworks may even now be selling ammunition to the American government. This fact has been largely overlooked by prosecutors and Congress.
Diveroli comes from a family that includes arms dealers and a celebrity holyman. His uncle, Shmuley Boteach, was recently named by Newsweek as one of America's top 50 rabbis. He's also a former reality-TV host on TLC, a friend of Oprah's, and the bestselling author of Kosher Sex and Dating Secrets of the Ten Commandments. Boteach was accused of misusing charity money in 1999 and paid some back. In 2001, he collaborated with Diveroli's mother and Michael Jackson on the ominously named "Time for Kids" charity, which later went bankrupt.
Diveroli grew up in Miami Beach and went to work at age 16 for another uncle, Bar-Kochba Boteach, who ran an arms dealership in South Central Los Angeles. Two years later, in 2004, Diveroli filed papers in Nevada to form Ammoworks, which would soon resurface at a gated community in Hollywood, Florida.
Diveroli then moved to Miami and took a job with his dad's arms company, AEY Inc. Within a year, at age 19, he took over as president. Along with a childhood buddy and two-time college dropout named David Packouz, he accrued a bevy of government contracts. In 2006, for instance, AEY shipped several million dollars of clothing, weapons, and firefighting equipment to government agencies, according to a website called Fedspending.org.
Soon, AEY was placed on a State Department blacklist. The firm was being investigated for "numerous violations of the Arms Export Control Act and contract fraud," according to a congressional report issued last year. In addition, it was accused of performing substandard work on at least 11 government contracts, which were ultimately withdrawn or terminated. According to the congressional report obtained by New Times: "Government contracting officials repeatedly warned of 'poor quality,' 'damaged goods,' 'junk' weapons, and other equipment in 'the reject category,' and they complained on several occasions that AEY was 'hurting the mission' and had 'endangered the performance' of government agencies."
Still, in January 2007, the firm won a $300 million contract with the U.S. Army to supply ammunition to Afghanistan for that nation's antiterrorism effort. AEY was to provide the police and national army with the bulk of their bullets.
Diveroli found much of the ammo in Albanian arms dumps. Some of it dated back decades and came from China. Unfortunately, selling Chinese-made war material to the Pentagon is illegal because of a 1989 arms embargo. Diveroli emailed the State Department in 2007 to ask if he could ship Chinese ammo. When the reply was no, federal prosecutors claim Diveroli removed the Chinese packaging and passed off the ammo as Hungarian.
Diveroli allegedly hired two of the men accused of mass murder at Gerdec to run the repackaging process at Tirana's Mother Teresa International Airport. The ammo was removed from sealed canisters and packaging marked "Made in China." It was then dumped into cardboard boxes and shipped to Afghanistan. Sometimes bullets spilled in transport.
In the tapes, Diveroli tells Trebicka to bribe one of the ammo repackagers. "Send one of your girls to fuck him," Diveroli says in the recording posted on YouTube and quoted by the New York Times. "If he gets $20,000 from you, I can live with this." Trebicka warns of the dangers of involving the alleged repackager and his "Mafia guys" in the deal. But he assures Diveroli about their plan going forward — and he alludes, mysteriously, to the CIA. "Probably I will be invited in Washington, D.C., by the CIA guys and my friends over there," Trebicka says. "Two weeks from now, I will come to Florida to shake hands with you and discuss future deals." It wasn't long after the tape's recording that Trebicka's body turned up outside the city of Korce. The Albanian government ruled he died accidentally when his car overturned, but some question that finding.
March 2008 was disastrous for Diveroli. On the 27th, the Times, acting partly on Trebicka's leads, accused the company of supplying Chinese ammo to the Pentagon in violation of federal law. The next day, the U.S. government suspended AEY from further contracting work. In a letter announcing the suspension, Pentagon officials warned that Diveroli might strike again: "It is reasonable to believe that both Mr. Diveroli and AEY will seek to obtain similar work in the future, either directly or as a representative of another contractor."
This turned out to be prescient. On March 6, 2008 — three weeks before the Times story broke — Efraim Diveroli had registered Ammoworks in Florida. It was headquartered in a Hayes Street apartment in Hollywood. In April, an industry insider spotted him at an arms fair in Malaysia.
But in June, a federal grand jury in Miami indicted Diveroli, as well as David Packouz and two other AEY associates, for fraud and conspiracy. Diveroli retained at least two government contracts for months after the indictment. "The contracts were for AK-47s and weapons repair parts," says Glenn Furbish, a senior audit manager for the Special Inspector General of Iraq Reconstruction (SIGIR).
SIGIR confirmed that Diveroli was paid $10 million for the two contracts. It seems that while he was under federal indictment, the federal government made him a multimillionaire.
This past September, Ammoworks moved to an office building on Michigan Avenue just north of Lincoln Road in Miami Beach. The firm wasn't listed in the registry downstairs, but its ninth-floor suite was spacious and sunlit, with a fitness ball for a chair. Though a worker there declined to comment, the firm's website, ammoworks.net, which has since been scrubbed of most text, bragged about a fortune in government contracts: "Ammoworks has produced hundreds of millions of dollars worth of firearms, ammo, and tactical gear among other things for our special forces in Iraq and Afghanistan."
In fact, Ammoworks may simply be a shell for AEY. Records show that the Ammoworks website was bought and registered by AEY, and AEY's latest state filing lists Ammoworks' address on Michigan Avenue. In a brief interview with New Times, Efraim Diveroli acknowledged that both companies are his. "Yes, I own Ammoworks, and I also own AEY," he said. He declined to comment further.
A salesman for Ammoworks, Boz Kramer, told New Times in a phone interview that the firm is out of stock and back-ordered in heavy-caliber Lithuanian .308 ammo. But he said it can be obtained with a hefty minimum order of 28,000 rounds — or 140 "Sealed Military Battle Packs." According to its website, Ammoworks also sells AK-47 ammo "made in South Korea for a U.S. government contract."
Although Diveroli is awaiting trial and Ammoworks was placed on a U.S. blacklist, Kramer confirmed this past October that the company was trying to sell indirectly. "We provide quotes to companies that are selling to the government," he said.
A government official who spoke on the condition of anonymity said, "It's often the case that a company will get suspended or debarred, and then the owners will form another company and start getting contracts through the new company."
Maybe Efraim Diveroli — the indicted 20-something, whom another unnamed official called a "ballsy little shit" — will use that well-worn stratagem to again sell arms for America's wars.