Diveroli arrested and charged in weapons contracting case

MIAMI, June 22 – Efraim Diveroli, the 22-year-old from Miami Beach, whose AEY Inc. company had a contract to supply the U.S. military with ammunition for forces in Afghanistan, has been charged, along with three others, with providing prohibited Chinese-made ammunition and claiming it came from Albania.
AEY Inc. was paid more than $10 million for 35 shipments of ammunition that prosecutors say was, in fact, manufactured in China.
Prosecutors contend AEY Inc. removed markings from containers to hide the fact they were manufactured in China. In each instance, Diveroli certified that the ammunition was manufactured in Albania and submitted an invoice for it, they said.
Diveroli’s company was given a $298 million contract by the U.S. Army in 2007 to provide several types of ammunition. It was not clear how much of that contract had been paid, but the first shipment of ammunition listed in court documents was from June 2007.
In March, his company was suspended from government contract work pending the outcome of a criminal investigation following the March 15 blast in Gerdec, near Tirana, where 26 were killed and more than 300 injured. U.S. Attorney R. Alexander Acosta said that quality control is one reason the government wants to know the manufacturer and origins of ammunition.
Diveroli’s company “intentionally cut corners” and was “risking the lives of our troops and allies.” He also said that the ammunition was “old” but did not say when it was manufactured. Acosta said the defendants could face more than ten years in prison if convicted.
Diveroli’s attorney, Howard Srebnick, said that the government has “misconstrued” the law his client is accused of breaking. He said the government knew Diveroli bought the ammunition from the Albanian government and that it was made in China before a munitions embargo.
Together with Diveroli, the others charged were David Packouz, director and vice president of AEY Inc., Alexander Podrizki, an associate who was stationed in Tirana, and Ralph G. Merrill, of Bountiful, Utah, who provided financial and managerial assistance to the company.
Albanian leaders are suspected of profiting from the murky arms deal with AYE, whose contract with the U.S. Army has been suspended. Former Defense Minister Fatmir Mediu is charged with abuse of post for his involvement in the Gerdec blast, not the ammunition sale.
In March, the New York Times published an article accusing Albanian officials of murky deals with Diveroli using a third company, Cyprus-based Evdin Ltd., a company subcontracted by Albania’s trading giant, MEICO, to coordinate the deal between the Albanian military and AEY.
Albanian officials have denied the charges.