Efraim Diveroli was known for his precociousness, a trait that would serve him well — and ultimately betray him — as he tried to scam the American government.
Efraim Diveroli oozed new money from every pore. The cool shirts, the new car, the confident swagger all shouted “easy money.”
He was still a kid and he’d already made a name for himself as a gun runner who crossed the country and amassed a small fortune he loved to flaunt. Soon, his fortune would grow exponentially and his trade would stretch from Miami to China, Eastern Europe, and war-torn Afghanistan. He had all this — and lost it soon after — before he could legally buy a drink.
This is the true story behind 2016’s War Dogs — and it’s even more absurd than Hollywood made it seem.
Diveroli’s Young Guns
In many ways, Efraim Diveroli’s future path was not a surprise. As a child, he delighted in pushing boundaries and breaking rules — endless pranks, alcohol, marijuana.
“I loved it and went strong on the good herb for the next ten-plus years,” he remembered. And his streak for pushing for greater and greater highs extended from one green into another: money.
And what brought him money was guns. Since he was a teenager, Diveroli had been exposed to arms and munitions while working for his uncle in Los Angeles at Botach Tactical. The younger Diveroli and his father, Michael Diveroli, ultimately decided to take aim at arms dealing on their own when they realized there were lucrative government contracts to be scooped up. The elder Diveroli incorporated AEY (taken from the initials of the Diveroli children) in 1999. Efraim Diveroli subsequently became an officer at 18 and then president by 19.
Diveroli’s AEY started small by nabbing federal contracts that bigger companies weren’t interested in. He drafted an old friend from synagogue, David Packouz, to help with the complicated contracts, and another childhood pal, Alex Podrizki, took on the on-the-ground operations abroad. The company operated mostly out of a Miami apartment, meaning the overhead was minimal, which made their bids smaller, and this was precisely what the American government wanted.
The Real War Dogs
The Bush administration began to prioritize smaller contractors to supply arms and ammunition. Diveroli’s company was thus the perfect supplier.
Diveroli’s charm and persuasion made him ideal for these situations, as did his relentless drive and competition. Those same traits made him apt to lose focus on the bigger picture, however.
“When he was trying to get a deal, he was totally convincing. But if he was about to lose a deal, his voice would start shaking. He would say that he was running a very small business, even though he had millions in the bank. He said that if the deal fell through he was going to be ruined. He was going to lose his house. His wife and kids were going to go hungry. He would literally cry. I didn’t know if it was psychosis or acting, but he absolutely believed what he was saying.”
Diveroli was driven by a winner-takes-all mentality: If he didn’t walk away with everything, there was no point. Packouz painted the picture of a man for whom winning wasn’t enough, he also wanted someone to lose.
“If the other guy is happy, there’s still money on the table,” Packouz recalled. “That’s the type of guy he is.”
It was May 2007 and the war in Afghanistan was by all accounts going poorly when Diveroli seized his greatest chance to win. AEY underbid the nearest competition by around $50 million and managed to sign a $300 million arms contract with the Pentagon. The gun runners toasted their good fortune with a fair amount of bubbly, which Diveroli was just barely able to drink legally, and cocaine. Then they got down to business to source the precious AK47s.
The high of this contract didn’t last long, though. The young men had trouble finding the promised goods and eventually turned to contraband Chinese supplies.
Diveroli’s propensity for fudging the rules came through. They repackaged the arms into plainer containers, removed any taint of Chinese characters that would belie their origins. AEY eventually delivered these illegal products to the government.
Efraim Diveroli’s Downfall
The 2016 film War Dogs captured the drama of this insane venture, but took liberties with a few facts. Packouz and Podrizki were folded into the same character. Similarly, Ralph Merill, their financial backer of Mormon origins who had also worked in arms manufacturing, was rewritten as a Jewish dry cleaner. The reckless trek that the film version of Diveroli and Packouz embarked on from Jordan to Iraq never happened — though the two were certainly daring, they were not suicidal.
But, for the most part, the true story behind War Dogs was there, especially in Diveroli’s single-minded ambition, as played by Jonah Hill.
According to Packouz, Diveroli became gradually more difficult to work with and even accused the AEY president of withholding money from him. Packouz flipped on his former partner to the Feds, but Diveroli played down Packouz’s part in the company and claimed that he was merely “a part-time employee… who only closed one very small deal, with my help, and dropped the ball on a dozen others.”
Nonetheless, the lifetime of breaking rules caught up to Diveroli. In 2008, he pleaded guilty to fraud and conspiracy to defraud the US government. He was 23 years old.
“I have had many experiences in my short life,” Diveroli said before Judge Joan Lenard in court, “I have done more than most people can dream of. But I would have done it differently. All the notoriety in my industry and all the good times — and there were some — cannot make up for the damage.”
Before he could even be sentenced, Diveroli couldn’t help himself but handle a few firearms in the meantime. Upon his sentencing, for which he was already bound to receive four years in prison, he got a further two years of supervised release.
His partners received lesser punishments for cooperating with the investigation. True to his personal brand, Diveroli continued to wheel and deal while in jail and looked for shorter prison time and more power. As he explained to his father:
“The only way for one chicken to leave the farm is for another chicken to come in… If [this guy] has to go to prison for life so that I can get one year off my sentence… that is what is going to happen!”
Since then, Diveroli hasn’t stayed clear of the law. He sued Warner Bros. for defamation in War Dogs but the lawsuit was thrown out. Then he became entangled in a court battle with the man who co-authored his memoir, Once a Gun Runner. Diveroli also started a media company named Incarcerated Entertainment.
In all, he seems to be doing well for himself as of late. According to former AEY investor, Ralph Merrill, Diveroli “lives in a condo with a locked gate,” and drives a BMW.