.Young Miami Beach arms dealer sentenced to four years in prison
Efraim Diveroli, an arms-dealing wunderkind from Miami Beach who had scored a $300 million munitions contract with the Pentagon, was sentenced Monday to four years in prison by a federal judge who scolded him for a life of deception, gambling and substance abuse.
Diveroli, now 25, captured the attention of Congress when he was arrested in 2008 on charges of selling banned Chinese ammunition to the U.S. Army to supply Afghan forces fighting insurgents. He pleaded guilty the next year to one count of conspiring to defraud the Department of Defense.
``It is a sad day when anyone values their self-worth by a dollar sign,'' U.S. District Judge Joan Lenard told Diveroli, whose emotional sentencing was attended by about 50 family members and supporters.
``If it wasn't so amazing, you would laugh that such a young man could attain such responsibilities,'' she said, noting he won the massive military contract when he was only 21 years old.
``But to participate in such a fraud when people are putting their lives on the line, it makes it so much sadder,'' she said. ``It makes the heart ache. And all for money.''
Diveroli, who had faced up to five years in prison, got one break from the judge. Lenard gave him a lesser sentence because he accepted responsibility for his crime -- even though Diveroli was arrested in Central Florida in August while on bail on a separate charge of possessing firearms and ammunition.
Ever since, Diveroli has been in federal custody. He pleaded guilty to the firearms charge in November and awaits sentencing later this month.
His mother, two rabbis and his defense lawyers -- along with the judge -- said his five months in prison have taught him a sober lesson, transforming him from a reckless egotist to a humbled inmate.
``It is clear to me in prison you're a nobody,'' Diveroli told the judge. ``I'm an embarrassment to my family and my community.''
In addition to giving him four years in prison, the judge also fined Diveroli $250,000 and ordered him to repay the Defense Department more than $149,000.
In the plea deal, Diveroli admitted he conspired with employees of his Miami Beach company, AEY Inc., to sell the U.S. Army $10.3 million of prohibited Chinese munitions that they tried to disguise as being made in Albania. The Pentagon bought the machine-gun rounds from AEY in 2007 to supply allied forces in Afghanistan.
In return for pleading to one conspiracy count, the U.S. Attorney's Office in Miami agreed to drop 84 other procurement charges. AEY also pleaded guilty to the same count, and was ordered to pay a $500,000 fine.
Diveroli's contract with the Pentagon was only a fraction of his government business. His company agreed to sell about $300 million in weapons and munitions to the Army one year before he and three other men were indicted on conspiracy and procurement offenses in March 2008. The indictment triggered congressional hearings.
Two other employees, David Packouz, AEY's vice president, and Alexander Podrizki, an AEY agent, pleaded guilty in 2009 and await sentencing later this month.
An AEY agent and investor, Ralph Merrill of Utah, opted for trial and was convicted in December on a variety of charges. His sentencing is scheduled for March.
The case centered on the embargo of Chinese-made weapons passed by Congress in 1989 in response to the massacre of dissidents in Beijing's Tiananmen Square. Despite normalized trade relations with China, the arms embargo has remained in effect.
Diveroli's lawyers, Howard Srebnick and Hy Shapiro, tried to have the indictment dismissed, saying he did not violate the embargo because the Albanians acquired the Chinese munitions during the Cold War -- 15 to 30 years before the embargo took effect. Diveroli did not buy them from Albania until late 2007.
The dispute arose in 2007, when the State Department e-mailed the young Miami Beach munitions dealer to tell him he could not sell Chinese weaponry to the U.S. government to help supply allied forces in Afghanistan, according to a factual statement filed with Diveroli's plea agreement.
Diveroli, president of AEY, and three of his employees had the machine-gun rounds removed from the wooden crates and metal tins that bore the Chinese markings, and repackaged the ammunition in cardboard boxes, the statement said.
Miami Herald
Diveroli, now 25, captured the attention of Congress when he was arrested in 2008 on charges of selling banned Chinese ammunition to the U.S. Army to supply Afghan forces fighting insurgents. He pleaded guilty the next year to one count of conspiring to defraud the Department of Defense.
``It is a sad day when anyone values their self-worth by a dollar sign,'' U.S. District Judge Joan Lenard told Diveroli, whose emotional sentencing was attended by about 50 family members and supporters.
``If it wasn't so amazing, you would laugh that such a young man could attain such responsibilities,'' she said, noting he won the massive military contract when he was only 21 years old.
``But to participate in such a fraud when people are putting their lives on the line, it makes it so much sadder,'' she said. ``It makes the heart ache. And all for money.''
Diveroli, who had faced up to five years in prison, got one break from the judge. Lenard gave him a lesser sentence because he accepted responsibility for his crime -- even though Diveroli was arrested in Central Florida in August while on bail on a separate charge of possessing firearms and ammunition.
Ever since, Diveroli has been in federal custody. He pleaded guilty to the firearms charge in November and awaits sentencing later this month.
His mother, two rabbis and his defense lawyers -- along with the judge -- said his five months in prison have taught him a sober lesson, transforming him from a reckless egotist to a humbled inmate.
``It is clear to me in prison you're a nobody,'' Diveroli told the judge. ``I'm an embarrassment to my family and my community.''
In addition to giving him four years in prison, the judge also fined Diveroli $250,000 and ordered him to repay the Defense Department more than $149,000.
In the plea deal, Diveroli admitted he conspired with employees of his Miami Beach company, AEY Inc., to sell the U.S. Army $10.3 million of prohibited Chinese munitions that they tried to disguise as being made in Albania. The Pentagon bought the machine-gun rounds from AEY in 2007 to supply allied forces in Afghanistan.
In return for pleading to one conspiracy count, the U.S. Attorney's Office in Miami agreed to drop 84 other procurement charges. AEY also pleaded guilty to the same count, and was ordered to pay a $500,000 fine.
Diveroli's contract with the Pentagon was only a fraction of his government business. His company agreed to sell about $300 million in weapons and munitions to the Army one year before he and three other men were indicted on conspiracy and procurement offenses in March 2008. The indictment triggered congressional hearings.
Two other employees, David Packouz, AEY's vice president, and Alexander Podrizki, an AEY agent, pleaded guilty in 2009 and await sentencing later this month.
An AEY agent and investor, Ralph Merrill of Utah, opted for trial and was convicted in December on a variety of charges. His sentencing is scheduled for March.
The case centered on the embargo of Chinese-made weapons passed by Congress in 1989 in response to the massacre of dissidents in Beijing's Tiananmen Square. Despite normalized trade relations with China, the arms embargo has remained in effect.
Diveroli's lawyers, Howard Srebnick and Hy Shapiro, tried to have the indictment dismissed, saying he did not violate the embargo because the Albanians acquired the Chinese munitions during the Cold War -- 15 to 30 years before the embargo took effect. Diveroli did not buy them from Albania until late 2007.
The dispute arose in 2007, when the State Department e-mailed the young Miami Beach munitions dealer to tell him he could not sell Chinese weaponry to the U.S. government to help supply allied forces in Afghanistan, according to a factual statement filed with Diveroli's plea agreement.
Diveroli, president of AEY, and three of his employees had the machine-gun rounds removed from the wooden crates and metal tins that bore the Chinese markings, and repackaged the ammunition in cardboard boxes, the statement said.
Miami Herald
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