22-year-old arms dealer suspended

**HorseArcher** · March 28, 2008, 08:06 AM

WASHINGTON (CNN) -- U.S. investigators are looking into accusations that a company hired by the U.S. military supplied corroded and decades-old Chinese ammunition to the Afghan Army and police.

Ammunition was improperly packaged and corroding, according to Army documents.

The U.S. government has suspended AEY Inc. of Miami, Florida for violating its contract, according to U.S. Army documents obtained by CNN.

The Army and House Oversight Committee identified the president of AEY Inc. as Efraim E. Diveroli. He is a 22-year-old whose father started the company as a small printing company, according to WFOR-TV, a CNN affiliate in Miami.

The government is conducting a criminal investigation into allegations that AEY Inc. knowingly misrepresented what the company would provide the Afghan security forces.

Under the contract, AEY said it would supply ammunition manufactured in Hungary. But an investigation by the Army found most of the bullets were made in China, a violation of the contract, according to the Army documents.

U.S. regulations bar companies from purchasing weapons or ammunition from a Chinese military company directly or indirectly, according to U.S. military officials.

U.S. government investigators took numerous photographs of the ammunition showing that it was improperly packaged and corroding, according to the Army documents.

The Department of the Army, the contracting authority for the government, sent a letter to Diveroli on Wednesday informing him that he and his company were suspended from contracting with the U.S. government until the investigation is complete.

The Army documents show that since 2004 the company entered agreements with the U.S. government that totaled about $10 million.

The papers also reveal the company struck it big in 2007 with contracts totaling more than $200 million to supply ammunition, assault rifles and other weapons to the Afghan National Army and Police.

When that ammunition arrived in Afghanistan, U.S. officials were contacted because of its unsatisfactory condition.

Army criminal investigators were sent to look at the packages in January. They took hundreds of pictures showing ammunition dumped in deteriorated and broken cardboard boxes and wrapped in plastic, according to the Army documents.

The documents also reveal ammunition was corroded and made in China from 1962 through 1974.

According to U.S. government regulations, the alleged misrepresentation by AEY could bring a fine, five years imprisonment or both. Additionally, if AEY is found in violation of the contract the company will be permanently barred from doing business with the U.S. government.

The House Oversight Committee plans to hold a hearing into the matter on April 17.
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"The hearing will examine the company's financial history, past performance and compliance with U.S. law and government contracting regulations," the committee said in a statement late Thursday.

The hearing also will examine "the federal government's efforts to investigate allegations that AEY may have violated U.S. law and government contracting regulations," the committee said.

http://www.cnn.com/2008/US/03/27/mil...ion/index.html

Well the original article was from the NYTimes, where the newspaper reported of the fraud is Hungarian based. Hungary completely denied all the charges of the fraud.

I'll tell you what, (read in the hungarian newspapers) the ammunition was made in China and was stored in Albania.

Remember the giant explosion earlier?
Poorly stored/damaged and mishandled ammunition caused it, of course, you won't hear about that in the USA - based news.

Albania has some 100,000 tons of excess ammunition stored in former army depots across the country, according to Defense Minister Fatmir Mediu. He has said the country needs at least $77.8 million to destroy them.

"The problem of ammunition in Albania is one of the gravest, and a continuous threat," Berisha said. "There is a colossal, a crazy amount of them since 1945 until now."

US gave $300m arms contract to 22-year-old with criminal record

The Pentagon entrusted a 22-year-old previously arrested for domestic violence and having a forged driving licence to be the main supplier of ammunition to Afghan forces at the height of the battle against the Taliban, it was reported yesterday.

AEY, essentially a one-man operation based in an unmarked office in Miami Beach, Florida, was awarded a contract worth $300m (£150m) to supply the Afghan army and police in January last year. But as the New York Times reported in a lengthy investigation, AEY's president, Efraim Diversoli, 22, supplied stock that was 40 years old and rotting packing material.

"Much of the ammunition comes from the ageing stockpiles of the old communist bloc, including stockpiles that the state department and Nato have determined to be unreliable and obsolete, and have spent millions of dollars to have destroyed," the paper said.

http://www.guardian.co.uk/world/2008...fghanistan.usa

**Captain Arrrgh!** · March 28, 2008, 08:11 AM

Disgusting news. Bloody dirty dealers and Chi Coms.
Anyone remember when we nearly bought our berets from the Chi Coms? Arrrrghhhhh!!!

**Carach** · March 28, 2008, 08:24 AM

theyre from Miami.. what do u expect.

**Serious Spamurai** · March 28, 2008, 08:26 AM

I doubt he ever saw the ammunition, I'd imagine that, as far as he knew, it was good condition. They should buy it new from Russia, I think the Tula factory is still the main manufacturer of soviet 7.62.

**Rapax** · March 28, 2008, 08:28 AM

Originally Posted by Serious Spamurai

I doubt he ever saw the ammunition, I'd imagine that, as far as he knew, it was good condition.

You're saying that like he's some kind of honest businessman just trying to make a living.

**Serious Spamurai** · March 28, 2008, 08:50 AM

3rd party arms dealers don't see the weapons they ship, they buy them from one place and have them forwarded to another, he probably isn't stupid enough to try and fool the US government, but the people he bought the ammunition probably thought he was stupid enough to fool. It's probably a case of his shippers not checking the cargo against the manifest, which does happen sometimes, they think they'll lose the deal if they open the cargo, so, unless they've had special instruction, they don't.

**Rapax** · March 28, 2008, 09:16 AM

But you do actually believe that this man

The Pentagon entrusted a 22-year-old previously arrested for domestic violence and having a forged driving licence to be the main supplier of ammunition to Afghan forces at the height of the battle against the Taliban, it was reported yesterday.

is someone that the Pentagon should have chosen to supply Afghanistan with ammunition, yes? It's like the guy watched "Lord of War" and thought "hey, I can do that too".

**Serious Spamurai** · March 28, 2008, 09:20 AM

It's not like he was done for fraud or something. They shouldn't have chosen him because it seems he made the amateurish mistake of not having his cargo checked. I'm just saying it's probably not intentional negligence on his part.

**NaptownKnight** · March 28, 2008, 12:07 PM

I've heard Albania is quite the fortress country.

Anyways, we have such a huge deficit because our government trusts $300m to 22 year olds with priors. All he is thinking about is living the life in South Beach, he is going to try and find the cheapest weapons he can get.

**Captain Arrrgh!** · March 28, 2008, 12:09 PM

Well, it IS only going to the Afghan police, after all.....

**Heinz Guderian** · March 28, 2008, 12:42 PM

All emotions aside, does anyone else think this kid is a resourceful guy with can-do spirit? (apart from the domestic violence)

Does anyhone know how much money he's made in profit?