House to probe shady Pentagon contract given to 22-year-old
A lengthy investigation published Thursday reveals that the Pentagon gave an inexperienced 22-year-old a $300 million contract to provide ammunition to Afghanistan. The shady deal resulted in decades old, substandard munitions being delivered to US and Afghan troops fighting on the front lines of the war on terror.
Following publication of a lengthy New York Times article, the House Oversight Committee announced it would investigate AEY Inc., a fledgling company that thrived after 2003 as the US government began handing out billions of dollars to private defense contractors. Chairman Henry Waxman invited company officials as well as representatives of the State and Defense departments to testify at a hearing next month, according to a news release.
Efraim E. Diveroli, 22, could face federal fraud charges after he tried to pass off the Chinese ammo as manufactured in Hungary. His company, AEY Inc., was banned from doing future business with the Defense Department after the New York Times revealed the shady circumstances surrounding a $298 million contract he received in January 2007.
In addition to the Miami-based AEY, Diveroli started a separate company, AmmoWorks, which advertised products such as Lithuanian GGG .308 Ammunition, MP-5 Magazines and an RPK40 magazine. A toll-free phone number listed on AmmoWorks Web site rings directly to AEY's Miami headquarters.
AEY apparently did the bulk of its business supplying weapons and ammunition to Afghan security forces, and it received government contracts for other agencies dating back at least 2004. The company is now suspected of fraud for misidentifying where it purchased munitions abroad, the Times reported Friday.
One of the biggest mysteries surrounding AEY remains how the company run by a few inexperienced 20-somethings managed to procure hundreds of millions of dollars worth of government contracts; the House Oversight Committee is planning an investigation. AEY's vice president was 25-year-old David Packouz, who is a licensed masseur. Another 25-year-old, Levi Meyer, briefly served as a general manager. Myer told the Times, "I'm not involved in that mess anymore."
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