19 year old ran $223 million arms export company?

adeptitus

Captain
VIP Professional
This news ranks in the realm of the absurd, but thought you guys might like to read it:

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U.S. Army Suspends Suspect Afghan Munitions Deal
By JIM MANNION, agence france-presse
Published: 27 Mar 16:03 EDT (12:03 GMT)
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WASHINGTON - A defense contractor reportedly led by a 22-year-old has been suspended from doing business with the U.S. government for allegedly supplying Afghan security forces with old Chinese-made munitions, officials said March 27.

Until an investigation has been completed, AEY Inc. and its president Efraim Diveroli, were suspended from future contracting with any U.S. government agency, according to officials and an army memorandum obtained by AFP.

Diveroli was notified March 25 that he had been suspended because he provided certificates declaring the ammunition was made in Hungary, "when in fact the majority of the ammunition was manufactured in the People's Republic of China between 1962 and 1974," according to the document.

Using Chinese-made ammunition violated the terms of the contract, the notice of suspension said.

In January, investigators inspected munitions stored at a bunker in Afghanistan and found that 14 of 15 containers of 7.62-caliber ammunition supplied by AEY Inc. were manufactured in China, the army memo said.

The Army's Criminal Investigation Command is conducting an investigation into procurement fraud, an Army official said.

The Army memorandum said making false or misleading statements was punishable by fines or up to five years in prison.

The New York Times, which first disclosed the problems with the contract, said AEY Inc operates out of an unmarked office in Miami Beach, Fla.

Diveroli, it said, was 19 years old when he became president of AEY Inc in 2005 and began bidding on an array U.S. government munition contracts.

The Army placed orders for more than $223 million of munitions with AEY between March and December of 2007.

The Times said that since winning the contract in January 2007, the company has provided ammunition that is more than 40 years old and in decomposing packaging.

Pentagon spokesman Bryan Whitman said the Army was looking into the origin of the munitions and complaints about substandard packaging of the munitions delivered to Afghanistan.

U.S. military officials in Afghanistan stated "no safety incidents were reported and (there were) no reports of any ammunition that has malfunctioned associated with this particular contract," he said.

"That said, there is some concern with the packaging of the ammunition that's not in accord with the type of standards that we would like to see and would expect in the performance of this contract," he said.

Most of it came from stockpiles of former Communist bloc states, including stockpiles that the State Department and NATO had determined to be unreliable and obsolete, the Times said.

It said the contractor had worked with middlemen and a shell company on a U.S. list of entities suspected of engaging in illegal arms trafficking.

Tens of millions of rifle and machine-gun cartridges were made in China, making their procurement a possible violation of U.S. law, the Times said.

The Times story also raised questions about how the Army vetted AEY, a previously unknown defense contractor whose president, Efraim Diveroli, had little experience in Army procurement.

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panzerkom

Junior Member
wow, this is just precious. getting dirt cheap expired goods and selling them to uncle sam as good stuff. -- way to make some serious money.
 

Pointblank

Senior Member
Well, as long as the ammo is stored correctly, 1966 is not an issue. The way the Eastern bloc stores ammo is unique; well built wooden crates, inside two sealed giant metal cans. Open it, and even after 40 yrs, its like the day it was made.

In fact, here's an example. Czech surplus 7.62x39 ammo, made in 1972. Still shootable.

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However, two problems are present here:
1. The US forbids the purchase of Chinese ammo in their contracts, so this company violated the terms of the contract.
2. To save on shipping, the brilliant minds broke open all the cases and dumped the wooden crates and metal cans, and stuffed the ammo into regular cardboard boxes. Not such a great idea as you have broken the seal on what was sealed ammo...
 

Butthead3977

Just Hatched
Registered Member
I for one dont see anything wrong with this kid running a multi million dollar business, even if it has to do with guns
 

Sargon

New Member
Wow...

How did this kid become the president of a munitions supplying company that has US defense contracts?!

If I were him I'd take the money and run :D
 

Pointblank

Senior Member
Wow...

How did this kid become the president of a munitions supplying company that has US defense contracts?!

If I were him I'd take the money and run :D

It is remarkably easy for anyone to become a defence contractor if you have the skills or something the military wants. Anyone who can meet the criteria can bid on a military contract, and each bid will be judged on their merits. Most Western governments place their bid tenders on a centralized online database, from which anyone can go and read and see what contracts are being offered. For example, the Canadian government uses
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, which is a government online tendering system to list potential contracts.
 
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