Danny Jones Podcast - #155 - Real "War Dogs" Gunrunner Explains How to Get Rich Off War | David Packouz

Episode Date: September 27, 2022

David Packouz was an arms dealer during the War in Afghanistan and partner of AEY Inc., a major weapons contractor for the U.S. Department of Defense. In early 2007, when he was just 24 years old, David & his friend Efraim Diveroli secured a $300 million U.S. government contract to supply the Afghan Army with ammunition and weapons. David’s arm dealing story was produced into the 2016 film War Dogs by Todd Phillips. Today David is an entrepreneur, inventor, and musician.  David's Links: https://www.singularsound.com https://instafloss.com https://instagram.com/davidpackouz JOIN OUR KULT: https://bit.ly/koncretepatreon Danny  https://www.instagram.com/jonesdanny  https://twitter.com/jonesdanny Learn more about your ad choices. Visit podcastchoices.com/adchoices

What is it like being one of the most infamous warlords in the world? I have to start it with that question. I'm sorry. Well, I will be the first to say that I am not a warlord. And the movie that was made was called War Dogs. But I think most people, when they say the warlord is like, you know, someone who runs a militia and generally... Warlord just sounds so good, though. Yeah, I'm not to me.

I don't want to be a warlord. But, yeah, no, I've never led men in battle. Right. You know, never suppressed population's rights or anything like that. Right. I did supply weapons and ammunition for a brief period of my life a long time ago. But you guys, you guys did have posters of Nick Cage all over your office, right? We were fans of Lord of War at the time, yes.

That's true. Yeah. Yeah. How did this whole thing start? Like, can you walk me through your childhood meeting Ephraim for the first time? What were you guys childhood like? Were you guys really, like, smoking weed all day, every day? At a certain point in our lives, yeah, yeah.

But not when we first met. We were young teenagers. I'm actually four years older than him. And, you know, in the movie, they say we're the same age, but we're not. So I was four years older than him. I think I was, like, 15 or 16 when I met him. So he was like 11 or 12. And we both went, the way we met was, both of our families are Orthodox Jews.

And so we both went to the same synagogue. We didn't go to the same school, so we didn't know each other from there. We both went to private Jewish schools, but we didn't go to the same school. But we both went to the same synagogue, and either of us liked to pray. So we would sneak out during prayers and go hang out on the basketball courts. and that's kind of, you know, I had friends who were like two years younger than me and they thought he was entertaining and so, you know, they befriended him and that's kind of how he was like brought into my circle of friends and that's how we met. Yeah. And so what were you doing? What was your

primary source of income back then? And how much influence did your religion have in your early life? Like were your parents really pushing it hard? So my dad was a, or, Orthodox rabbi. So, you know, he, a member of the clergy. So, yeah, he was pushing it hard. But I think even amongst people who know who, you know, what Orthodox Jews are like, know that you don't need to be a member of the clergy in order to, you know, apply large amounts of pressure to your children to be religious. It's a major part of the culture and, you know, the community. So yeah, it was a very intense, you know, by relative terms to American society, a way of growing up. I never really liked it.

I never liked being, you know, leading the religious life. So as I got older, I eventually dropped it completely. How many discounts does USA auto insurance offer? Too many to say here. Multi-vehicle discount. Safe driver discount. New vehicle discount. Storage discount. How many discounts will you stack up?

Tap the banner. or visit usaaa.com slash auto discounts. Restrictions apply. Now, didn't at one point, didn't your parents send you to Israel to study? Yes. So got in a bit of trouble in high school. And, you know, they did this random drug test. And, you know, I came positive for weed.

And, of course, they all thought it was the same as, like, doing heroin. So they sent me to, like, outpatient rehab. And, you know, the school was going to kick me out. But they were like, you know, if you go to Israel and study for, year will still give you your diploma. And so, you know, I wanted to go to Israel anyway, because a lot of my friends were going. It's a thing that a lot of Orthodox kids do after graduating high school. They go to a year in Israel and study. And depending on the kind of person you are, more party than study, you know, I was planning to do more of the partying than the studying. But so I wanted to go to

Israel anyway. So I agreed and went to Israel, ended up staying for two years. First year I just partied the second year I actually studied and eventually I became a bit religious in my own way, not in the same way as my parents, but more of like a kind of like a hippie, you know, spiritual, meditative type of, you know, flavor of the religion rather than the traditional way, which is much more based on lots of rituals and, you know, like habitual stuff. That's kind of how most orthodox culture is based around. like a lot of very rigid rituals. So I didn't like that.

But I did become a bit more religious until I left Israel, went to University of Florida, took an anthropology course, and realized that everything I'd learned was garbage. Really? Yeah. So, I mean, I realized that at least science contradicted the vast majority of the claims, you know, that of what I was studying in Israel. And so there was no objective proof to at least, you know, the claims that that the community I grew up and were making as far as, you know,

as far as that goes. So I realized that I didn't have to be, you know, lead a religious life if I didn't want it. And, you know, that, you know, opened up my, the possibilities of, you know, finding my own spirituality. And people have this idea of that if you're not religious, you're not spiritual. I think that's completely untrue. Religion is more of a way that it's, It's a way to create social structure, right? So there's rules and there's hierarchies and, you know, there's an official philosophy of, like, how the world works, et cetera, right? Spirituality is your own personal experience, you know, like I find a lot of spirituality in music.

You know, I'm a musician. So, you know, when I listen to music or I create music, I feel myself, you know, become on like a different level of consciousness. And I find it very spiritual and very fulfilling and I connect with myself and with the universe. and, you know, a lot of things that the way people describe, you know, meditating or for religious people who go into like very deep prayer. So there's a lot of, you know, connections between spirituality and religion, but they are not the same thing. And I realized that once I didn't, wasn't shackled by the traditions of this, of the religion that I grew up with, I could find

my own spirituality and, you know, and that was much more effective for me. Did the role of psychedelics help you develop this point of view, this unique point of view that you had coming from a religious background? Yeah, so I did experiment with psychedelics and, you know, various other things, as many teenagers do. And psychedelics in particular are a very spiritual drug, you know, compared to most of the others. and I, you know, had some pretty deep insights into myself and into, you know, the culture that I grew up in while doing psychedelics. One of the most intense experiences I've ever had was doing LSD by the shore of the Dead Sea in Israel. And, like, I felt like time stopped and as if I was, like, existing in one eternal moment that, like, never ended. And because there was no time, there was no space.

And, like, I was the universe and the universe was me. and like I felt it and I was it. And I think people who've done had these kind of, it's a common experience. Actually, I didn't know that at the time for people on psychedelics to have these types of experiences. And it affected me for years after that, you know, just knowing that that type of experience is possible is a very profound, you know, effect. Is that experience, was it exclusive to LSD or was it the same, like,

mushrooms or other psychedelics? So for me, mushrooms were a bit different. You know, it was more, I think every, every drug affects every person differently, depending on, you know, their psychological state and the environment they're in, the people they're in, their expectations, the dose they take, you know, it's a big difference. So, but for me, mushrooms have always been, well, once you get past the nausea part, which is not fun. It's, been more of like a fun thing and and, you know, like you laugh and you see cool things. But with LSD, it's always been a lot more philosophical and introspective for me. So I don't know why, you know, one is the other, but that's how my brain chemistry works.

Right. Yeah, that's fascinating. I know that because I know there's a deep connection with psychedelics and ancient religions. Yeah. I've learned more about that recently. I don't know a ton of the nuances about it, but I know there's been studies that have shown, like the ancient Greeks and the Romans, have took a certain type of plant that was responsible for some psychedelic experiences that can explain some of the texts. That would make a lot of sense. I mean, you know, when it says that Moses saw the bush burning but wasn't being consumed.

Right, the burning, yes. You know, I mean, that's, I could easily see that while I'm on mushroom. You know, we're mescaline or whatever, you know? That's fascinating. You're doing this. And had you already become a masseuse at this point where you had you started making money with massage therapy? So when I went to University of Florida after Israel, I was 20 years old because I'd spent,

you know, 18 to 20 in Israel. And I realized that I'd have to pay for my own college. And I didn't want to get a minimum wage job, you know, because all my friends were flipping burgers and whatever making five six bucks an hour and I was like that you know that really sucks and I had been in a car crash when I was 17 and got whiplash and so I always had like neck issues and I was always trying to fix them and then while I was in Israel I was at a music festival and the local massage school there had a had a free massages you know like a booth where they were given out free massages and I got my first massage professional massage there and it like fixed a lot of my

issues and I was like blown away. And so I realized that I could learn to be a massage therapist and make like 75 to 100 bucks an hour instead of five, six bucks an hour. And so I could, you know, do one hour of work in a day and make more than my friends were making in the in eight hours in a day. And I could learn how to, you know, fix my own issues and, you know, and it doesn't, you know, hurt with the ladies, you know, that you're a professional massage therapist, you know. They tend to like that too. So it was like a win, win, win. So. massage school, I did an accelerated program. I did it in six months, got certified. And when I was 20 years old, I got my massage therapy license and started practicing part-time while I was in college. And at what point were you sourcing bed sheets? So, um, selling them to, selling them to what to, who were you telling them to?

Nursing homes. Nursing homes. Okay. Yeah, nursing homes and some hospitals. That's fascinating. Yeah. So is that something that you concocted? Or is that something that you kind of like got the idea from somebody else? So what had that happened? Because one of my friends, one of my friends who I had met in Israel, his dad owned a few nursing homes. And his dad put him into business after he came out of, he came back from Israel in the nursing home supply business. So he was, you know, buying from wholesalers, you know, bed sheets, towels, various medical

equipment. and selling it to his dad's nursing homes, but also to the other nursing homes in the business. But he would only buy from like distributors in the United States. And he told me, look, you know, I know that because at the time I had gotten into selling SD cards, you know, I was like importing them from China. I found like bulk SD cards in China and I was selling them on eBay. I was making decent money because they're tiny.

They're easy to ship and easy to store. So it was perfect. And so. You know, we were talking and schmoozing, as us Jews say. You're schmoozing. You're schmoozing. You schmoozing with the Jews. So we were talking and I told him about the SD card thing.

And he's like, oh, you know, so you're like doing some importing, you know how to find sources. You know, if you find sources for what I'm selling and you give it to me cheaper than what I'm buying it from those guys, I'd be happy to buy from you. So he gave me the stuff that he, you know, would sell. And I started Googling and looking online for sources and started asking for prices. And after, you know, a few weeks, I got, you know, pretty good prices, much better than his distributors were given him. And so I started importing bedsheets and towels and bibs and things of that nature. It wasn't just bedsheets. But a lot of the consumables, the textiles in particular.

And I was mostly sourcing them in Pakistan because Pakistan apparently is very competitive on towels and bedsheets. sheets. And so I started selling to him. I started selling to other people. And that's, you know, that's how I got into that. But unlike the movie, I never was going like from nursing home to nursing home with a bunch of bed sheets. I was just doing everything in bulk. So like, I wouldn't even take possession of the goods, you know. So my apartment was not filled up with bed sheets as they portrayed in the film. Yeah, I wouldn't even take possession. I was just being a broker. Yeah. It's interesting to me. me how you had this unique perspective at such a young age to get into arbitrage like that,

to get into sourcing things for a certain price and selling them for a higher price. That seems like it's a very rare trait for somebody in their early 20s. I don't think I knew anybody when I was that age that was doing that kind of thing. Well, my first business, I started when I was six. So it's a cute story. My, I was living in Israel at the time. So I was born in St. Louis, but, but my parents moved to Israel for my dad's work because he was a rabbi when I was a baby. And I grew up there until I was eight years old and came to Miami.

And while we were living in Israel, I was six years old. And there was this, we lived in an apartment building that didn't have an elevator or a garbage shoot. So you'd need to like take the trash down the stairs to the low, into the corner, to the dumpster and haul it over into the, the dumpster. And our mom, you know, would ask, you know, the kids to take out the trash, you know, occasionally. I'm one of nine children, by the way. Oh, wow. Yeah, I'm number three from the top. But because I'm one of the older ones, you know, I got a lot of the work initially before the younger ones grew up. So our mom asked my older sister and I to take out the trash and, you know, we were complaining, ah, it's so hard to take out the trash. We don't want to do it. It's, you know, it's, you have to

walk so far, you have to go down the stairs. And my dad says to us, you know, you guys are looking at this all wrong, right? Instead of complaining that it's such a shore, you can look at this as an opportunity. Think about all of our neighbors who don't like to take out the trash too, right? What if you go to them and you say, hey, every other day I'll come and pick up your trash and take it to the dumpster, right? Because people don't empty the trash every day. Every other day is fine. And you give me like, you know, a quarter a week, right? And so we're like, oh, money. I like that. So we were like, that's a good idea.

So we went to all our neighbors and we made them the software and we signed up, I think, seven or eight neighbors. And we got like our mom's big like shopping cart. It was this wire thing on like wheels. And we'd fill up the cart with like trash bags and, you know, kachung, kachunk, down the stairs, you know, to the corner to the dumpster and empty it. And after about a week, you know, my stuff. sister and I were like, this is so much work, you know, because it's physical labor and we were

small. And so my dad goes and we're told our dad, oh, we're going to quit. This is too much work. And my dad says, well, what if they paid, you made twice as much money, would you quit then? And we're like, well, twice as much money. Maybe we would, maybe that's worth it. And he's like, so then tell them that you're going to raise the price. And we're like, but we can't just tell them that we're going to raise the price because we just told them what the price was a week ago. And he's like, but if you don't raise the price, you're going to quit. So they either want it or they don't, right? And we're like, that's true.

So we went to all the neighbors and we're like, we're raising, we're doubling the price to 50 cents a week. And most of them, like, accepted it. One neighbor complained. They're like, you can't raise the price, you know, double you in the five cents this week, maybe 10 cents next week, you know. But we're like, no, that's the price we stuck to our guns. He's like, fine, fine, you know. He did it. And one neighbor quit on us. And from then on, we always saw their daughter take out the trash, which she'd never done before because I guess they realized, why are we paying the neighbor's

kids to take out the trash when we have a perfectly capable kid of our own to do it. So that was our first, that was the first business. And that lasted. After a few weeks, my sister quit because she just decided she didn't want to do it. And I realized if she quit, I'm getting double the money again. So, you know, so this is totally. worth it. So I kept on going for like a few months and I built up like a big Ziploc bag filled with you know, shekels, you know, about the value of a quarter. And, uh, wait, this was in this is in Israel. Oh, this is in Israel. Yeah, in Israel. Yeah, they're shekels. I say a quarter just so people understand what the value is, but a shekel is worth about a quarter. Um, so I had a big ziplock bag of

quarters and I felt very rich and every time there would be an ice cream truck that would come by every day, you know, with its little ice cream song. And I would be like, I have money. I couldn't go buying myself an ice cream. And so every day I would buy myself an ice cream. And I became a fat little six-year-old. That's fascinating. Yeah. The money thing is very interesting to me how your, your parents or your father instill the value. Even at six years old, you understood the value of money. Right. Well, I knew I wanted ice cream. And I knew you wanted ice cream and it costed money. Exactly. Yeah. And my dad was not going to buy it for me. So really? Yeah. So if the ice cream truck came by prior to this.

Oh, my parents never bought us ice cream. Never would buy you. What would they say to you? Um, say, if your dad, I want ice cream. Oh, it's not a special occasion. Really? Yeah. Interesting.

I feel like that's a very, uh, rare lesson that gets taught to kids at the age of six in this country, especially nowadays. Yeah. Yeah. Yeah. Yeah. So that is something that got instilled in you in a very young age and stayed with you. Yeah. you kind of, that's kind of what helped you evolve into the business of arbitraging stuff

sourced in different countries, such as bed sheets for old folks homes and retirement centers and stuff like that. Yeah, I've always been looking for opportunities. You know, it's just something that. So it's something that you, it's something that you and Ephraim had in common. Yes. He was just a little bit different in his tactics. He, yeah, he definitely was a bit different.

So at what point did you, at what point did you in Ephraim, reunite? So we reunited when I was about 23. I had been in college for a few years. You know, the bedsheets thing was going. The electronics from China thing was going pretty well. And he came back. He came back. He was 19 years old. And he came back from L.A. He had been sent to L.A. I think when he was about 16 or so because he got he got kicked out of school for smoking weed as well. But his parents, the way they dealt with it was they decided to send him over to work for his uncle. His uncle, you know, I guess the idea was, oh, if you're not going to take school seriously, you're going to work in the real world, you know. And so they sent him over to his uncle who owns a big pawn shop

in South Central L.A. And he had him working in the warehouse, you know, moving boxes. And but But Ephraim became obsessed with guns. I mean, I think from very early age, he was very obsessed with guns. You know, some guys like cars, some guys like guitars, some guys like guns. He was one of those gun guys. And, you know, his uncle sold guns, you know, most pawn shops do. And so he just became obsessed with it and learned about every type of gun and like where it was made and like what the market was like and, you know, how you could, you know, buy from here and sell to there. He started frequenting the gun forums, the gun boards, I think they call him.

And, you know, started buying, you know, used guns from people, you know, under his uncle's name and selling them and started making like some profit like that. And then his uncle was selling to the local police, the local state, a city and state police. And, you know, the way you sell to the government is you have to put a bid in online. And then the government decides who's, you know, the best, you know, price, delivery, date, reliability, et cetera. And so his uncle was doing that. And so he learned how to, you know, bid on these contracts, on these government contracts from his uncle, worked with his uncle for two to three years, made a bunch of money, and then claims that his uncle screwed him out of a bunch of money.

His uncle claims that he screwed him out of a bunch of money. I believe him both, you know? So it's just, you know, that kind of family. But they've had issues, you know, there. But, and so he quit and work, came back. to Miami and decided to start his own company. And this was in 2004. So he started bidding on federal contracts.

This was right after the invasion of Iraq. And so there was this huge amount of contracts going to rebuild Iraq, you know, because the United States bombed it and took it over. And I was trying to build a democratic new government. And part of that is arming the, you know, their local police and army. And so they needed a lot of equipment to do that. And so they started putting out these contracts. And he started bidding on these contracts.

And because he was so knowledgeable about the gun industry, he was very competitive. And he started whitting a lot of these contracts and, you know, multimillion dollar contracts. How old was he? He was, I think he was 18 when he came back to Miami. And then he was 19 when we started working together. So he was working by himself in Miami for about a year. before we bumped into each other. He came over a mutual friend's house to smoke weed.

We were smoking weed together. He asked me, you know, what I was doing these days. And I told him about the bed sheets, about the, you know, the electronics, the SD cards. And he's like, oh, that's cool. That's cool, you know, you're doing, you know, you're finding sources. You're doing licensing. You're doing essentially the same thing. Exactly.

He's like, you're pretty much doing what I do. But I'm doing it on a much bigger scale. So, you know, maybe you can come work with me, you know. well, I think you'll make a lot more money. And I was like curious. I was like, how much money have you made? You know, because he was like 19, you know? And he's like, and he goes to me, he's like, you know, I'm going to tell you, but not to brag. I'm just going to, I want to inspire you. And I'm like, he's like, you know, it's complicated because, you know, how much money I have like money coming in from deals. I, you know, owe much some people money. I'm like, how much money do you have right now in the bank? And he pops open his computer and, and he logs into his bank. account and he shows me and he had 1.8 million in cash in his bank account and he was 19 years old. And like that blew my mind. I was like, whoa. I don't know anyone. And I knew he made it himself, like his parents, you know, didn't give him that money or anything like that. So I was like,

this guy knows a business very, very well. And, you know, I can learn a lot from him. And so I was very inspired because I didn't have nearly that much, you know, with all my, you know, wheeling and deal in my businesses. I was like, he's obviously doing way better than me. Not that I was doing badly. I was more than comfortable and making a lot more money than other kids my age, you know, but he was on a whole other level. So I was like, I want to, you know, I could learn a lot from him. So I was like, okay, I'm in. You know, let's do this. And that's when he started teaching me, you know, like how the government, the procurement system works. And that was when I first started learning about weapons and ammunition and all various military equipment. I had no idea about any of this.

I was just a musician, you know, science nerd, massage therapist, you know, but like I never owned a gun in my life. You know, I didn't really care about guns. But, you know, that was like his expertise. So he started teaching me all that and I started learning all that. How did he learn about the website where you can bid on these federal contracts, Fed BizOps? Fed BizOps. Yeah. How did he find out of was that from his uncle? I believe so. Yeah. Yeah, yeah. So essentially you guys would log into this this website that list that had a list of contracts that federal government wanted to hire small businesses for the fulfilled. Well, it's, it's, well, it's still there. Anyone can go check it out. I checked it out today. Yeah, yeah. Yeah, you can find a lot of interesting stuff. They're looking to buy. They're looking to buy everything. So it's not just small businesses. They list everything that, that they want to buy over there. I think they're required to by law.

other than I think the CIA has like, you know, probably like, I don't know, like a $10 billion dark money budget that they don't have to tell people what they spend it on. But for the vast majority of, you know, the federal governments, I don't even know at this point. So was it like $2 trillion budget, something like that? They have to list. Because by law, they have to buy things competitively because otherwise they're wasting taxpayers' money. They have to get the best deal for the taxpayer. So to do that, they have a website and they list everything that they want to buy and they open it out for bid. Now, different things, depending on what it is, there are different rules, right?

So like if they want to buy an F-35 fighter jet, there's only Lockheed Martin makes it, right? So that's what they call a sole source contract. They still need a list it on the site, you know, in order to inform the public. Really? Yeah, yeah, we're going to be spending this money on this. But it's not an open bid. It's not, you know, you can't bid on the site. F-35 because you don't make it.

You know, only Lockheed Martin makes. And usually they do something like for like the sole source contracts. They usually do something called a cost plus contract where they'll pay the company what it cost them to build the item plus an agreed upon profit margin. Now, NASA has run into a lot of issues with this, which is why a lot of government projects have a lot of cost overruns because the companies have a big incentive to inflate the costs. After they get the bid.

after they get the bid because the more it costs them to build, the more dollars they make because it's a percentage of what they spend. So let's say they have a 2% profit margin. If the thing cost them, you know, $10 million instead of $1 million, you know, they're making 10 times more money, even though their margin is the same. So, you know, that's why all these government projects are so overrun, you know, why their cost overruns are so common. But for, so that's for like sole source contracts. But for. For most competitive contracts, the way it works is it's kind of like eBay, right? You know, they say we want to buy, you know, 10,000 guns or, you know, 100,000 meals ready

to eat on MREs or, you know, boots or whatever, fuel at anything. And they'll say we want these items. It has to have these characteristics. You know, we have to have it delivered to this place by this time. Give us your best offer. And then all the companies who are qualified to bid on that can give them their best offer. And the government looks at all the offers and decides which one has the best value to the government, which is a combination of factors. Usually it's a combination of price, delivery date, reliability of the supplier.

And then the government decides what's the best deal for them. And then they pick and sign the contract to that person and that person delivers. And then they collect their check and make their profit margin. So essentially for a couple of 20-year-olds starting out, you can start a business, you can start bidding on some of the low-level contracts, a couple hundred thousand, maybe a couple million dollars, and get your feet wet and slowly build a reputation for yourself. Exactly. So actually the way they work is usually for contracts that are under $100,000 in value. They don't require what they call past performance, which is proof that you've done. business with these kind of items before, right? So because they feel they feel like it's a small

enough amount that they can roll the dice on people with no experience. And, you know, if those guys have a better price, hey, maybe they can do it. And if they fail, then, you know, the government doesn't, it's not such a big deal to the government for a hundred thousand dollar contract. But once you do a few of those, now you have past performance. You can prove that you've successfully delivered these items to the government. And now you could bid on bigger contracts like million dollar plus contracts that require that level of documentation and proof that you have the experience to do that. Do other countries and other governments have the same system set up?

So most governments have a similar system. Now, depending on the corruption level of the government, you know, some of them are more or less transparent. But most governments, definitely most democracies have a. more or less open a bidding system. Yeah, because it makes sense, you know, they want to get the most bang for the buck. You know, they want to, you know, because they have a limited budget, right? So they don't want to get ripped off, right? The places you find the government getting ripped off usually are places where there's kickbacks being given. So Russia is famous for this. You know,

that, and there's a lot of stories out of Ukraine, you know, like where all the jeeps had like the cheap Chinese tires and they were like failing on the road early in the war. Is this recent? Oh yeah, this is just recent early in the war. That's that was one of the things in the news that they had, they didn't have the proper tires because someone in the Russian military went cheap on that contract and probably pocketed the difference and then they all, all their tires failed in the convoy, you know, on the way to Kiev. You know, that was like one of the issues that they were facing. So that's the downside of having a corrupt system is that the money isn't spent as a, efficiently and and you know the people that you're trying to supply kind of get screwed.

How much attention do you pay to conflicts that are going on now? Like for example, what's going on in Ukraine? With your background, is it you automatically drawn to these kind of things and looking at looking at the deep nuances of it? So I'm just a very curious person in general. And even though my current business has nothing to do with, you know, any international military conflicts. I'm just a very curious person, so I do stay up to date. I read The Economist, you know, that has, you know, I would say medium level depth coverage on most things. So I am, you know, very interested in those things, but just from a personal perspective, not a financial perspective. Not a financial. I mean, I do deal internationally with my current

business, but, you know, so I mean, you know, I sell music equipment. to musicians now. And, you know, we've sold to Russia. We don't anymore, you know, but they weren't a very big market anyway. So it wasn't a big deal for me, you know, but I still pay attention to what's going on in the world. So when you see stories in the headlines of the Biden administration dropping $13 billion in Ukraine, how is that working? That's obviously a broad headline. Right. So how specifically, is that all? All of the $13 billion, is that broken down on websites like Fed BizOps and being bid on? Or is all of this going to big companies like Lockheed Martin and Raytheon?

How does that work? So the way they do it, at least with Ukraine, I know early in the war, I don't know what they're doing. I'm sure now they've got lots of contracts open for bid. But early in the war, they had to get Ukraine. everything was an emergency, right? So they had to get Ukraine lots of equipment as quickly as possible. And the way they did that, I mean, if they went through the contracting system, it would literally take months, you know, because they have to have a certain amount of time to to post the thing, you know, with, you know, like a few weeks for people to notice it and to gather their their offers.

And then the government needs to analyze it. And then they need to award the contract. And then they need to deliver on the contract. And that takes minimum two months, I would say, you know, for the stuff that you need like military, you know, like licensing for military equipment to move goods, military goods across borders. It could be longer because you need overflight permits. You know, if you're shipping guns or ammunition, you need to get specific permission from every country you fly over. So that takes time. So the way the military did it early in the war was they just gave Ukraine from their own stockpiles. So they didn't have to buy it. Okay. You know, so like, for example, like the high Mars that is in the news, you know, the rocket launching system that is currently,

you know, has greater range than the Russian artillery, which is why Ukraine is doing so well, because they could shoot them, you know, out of their range and blow up their ammo depots. That was stuff that the U.S. military already had in stock for their own use. And then they just gave all that to Ukraine, on military aircraft so they didn't you know it was much easier for them to get over flight permits the u.s military you know as already all that worked out and they have amazing logistics u.s military and um and now what they're doing is they're trying to replenish their own stockpiles by going you know to lackey martin northrop grum and on all the other rathia on all the companies that make all this equipment that they've given to ukraine and they're trying to

replenish their own stockpiles. So that's kind of how they, they got the equipment to Ukraine much faster than they would if they did the traditional contracting round. I just had a former CIA agent in here two days ago. And he was, he was working on the counterproliferation efforts in Iran. And he didn't say it, but I got from what he was saying that he did a lot of dealing in Russia too. And what he was explaining about the Ukraine, Russia thing, similar to what you said, he said that Russia's artillery,

like if we're going, if we're talking about nukes, their nuclear capabilities are similar to ours. Yeah. Probably not as good. But when it comes to like ground artillery, that we are way more advanced than they are. Yeah.

So they have quantity. We have quality. You know, they, they have massive, massive stockpiles, or at least they did, right?

And they've been using a lot of those up now. But they have massive, massive, stockpiles, but their technical capabilities are not as good as the West's in almost all respects. They've got ICBMs, so yeah, I mean, they can wipe everybody off the map if they wish, and that's a big difference. But, you know, like their airplanes aren't as advanced as hours. you know, their, um, there are, you know, their general, their communication systems aren't as advanced as ours, you know, the West is a more technologically advanced organization, you know,

than the, then the Russians are, I mean, we have a lot more people. We've been industrialized for a lot longer. So there's good reasons for that. And of course, they've dealt with a horrible history, um, uh, you know, which has held them back and they've got endemic corruption, which, and all these things are very bad for, you know, development of society at large and technology, you know, by extension. So, yeah, it's true. The West is way more advanced. And I would say that, you know, I mean, Putin knows that, you know. He knows that the West is much more powerful. And if it came to a conventional war, the West would wipe them off the map easily, you know, you know it's only the nukes that that keep you know everybody from fighting each other outright right

yeah um did you guys this might be a stupid question but i feel like i have to ask it did you guys ever do any deals involving nuclear weapons no no no that's that would be rathion that they make the nukes oh they do they make the nukes sole source contract yeah wow wow that's crazy yeah um one of the coolest things about your story is that from my own's perspective, I didn't know, if we're just going back a year ago, I didn't know shit about the geopolitical landscape of the world. I've learned it by having people like you on here. But there has, listening to your story and reading that book has been the most entertaining form of learning about the geopolitical world and landscape and militaries than anything.

Yeah. Like, so when you started this in this business with Ephraim, how much did you know about the relationships between countries and the different games going on? Almost nothing. I was like, you know, I was just like, you know, a college student. I mean, I've always read the news, you know. I've always been, you know, curious about the world in general. You know, I'm, I was studying chemistry in college at the time.

So, you know, I'm a bit more of a scientific bent. You know, and part of that is just, you know, I love knowledge in general. You know, it's just something I enjoy learning about things. But obviously there's infinite realms of knowledge and the best, and all of us are ignorant and almost all of them, except our, you know, own little specialty, right? So, you know, I like being a generalist, you know, that's, you know, knowing a little bit about everything.

But I definitely wasn't focusing on geopolitics before, you know, working in that field. I had a very, one of my best friends actually, who ended up being involved in the War Dog story later. He was a political science major. So he was, you know, one of these people who was constantly ranting and raving about, you know, various, you know, conflicts and who's right and who's wrong and, you know, who's going to do what, you know, and what their response is going to be. So I kind of, you know, that kind of gleaned a lot of information, you know, just by listening to him. He's very, very knowledgeable about that stuff because he was studying it. But I definitely learned a lot more, you know, during the course of doing business because I had to.

I was, I was, I was, we were doing business with all these countries. And, you know, being, even countries we weren't doing business with, like Russia, we were being affected by because they were trying to block our overflight permits and things like that. So we had to pay attention, you know, like, you know, who, you know, what did the government say recently, you know, like, you know, like, Are they going to, you know, are they moving into, you know, like various regions, you know, like just an example. We had a 747 aircraft of cargo aircraft filled with ammo. This is in the book that was stopped on the tarmac in Kyrgyzstan, right? And they claimed we didn't have the licensing, even though we did. I mean, the plane wouldn't have taken off with it if it didn't have the license.

thing. They always check everything before they take off. But they claimed that we didn't. And we had no idea why they were doing this. And then it turned out that Russia was trying to get the U.S. out of the Central Asian sphere of influence. And so they were leaning on the politicians in Kyrgyzstan to stop renting their air base to the United States in Kyrgyzstan. Kyrgyzstan is right outside of Afghanistan. And their air base was being used as a staging place to fly goods into Afghanistan. So Russia was pressuring them to stop letting the U.S. use their airbase. And eventually they came, the U.S. was like, you know, we really need this. And eventually the Kyrgyz, they just doubled the rent. They were renting it. And I think they were renting it for, I forgot the exact numbers, but either for like 30 million a year and they doubled it to 60 million. something like that. And the U.S. was like, yeah, we'll pay you. Whatever. Even, even though you just

doubled it and that's like a total mafia move. And they were holding our plane hostage during negotiations. You know, that was like, is this the story when you're at, you're sitting in sushi and you get the call? Yeah, that's right. Yeah, that's how the book opens. Yeah, yeah, exactly. Yeah. That's so wild. All right, I want to reel it back a little bit. Sure. At what point was this before after you started working for Ephraim when you had that big Xbox deal? So that was our first, our first deal that we tried to do together. it ended up failing but um that's kind of how we started working together um i you know because i was buying electronics from china uh um you know i had come across uh this offer to the Xbox had just

been released the original Xbox this is a while ago and uh the Xbox had just been released and um I saw someone like offering I forgot it was like a large amount of them online and they were all sold out in all the stores and I thought it was like super weird you know like how Do these people have a large amount? It was like around 100,000. Yeah, it was an enormous amount. I don't even remember the numbers anymore, but I think you're more up to date on the numbers now because you read the book more recently. I haven't looked at the book in years at this point.

But yeah, and it was so strange, but like I was like, if this is real, this could make us a lot of money, you know, because there was a, like they were being sold at double to triple the retail price on eBay because they were all sold out. And the thing that made us think it was real is, was that, you know, it was, well, we eventually broke through a few, like, middlemen through levels. And Ephraim was very good at this. You know, he could, like, talk on the phone and, like, just talk the guys ear off and then get him to refer him to his source and get him to refer him to his source, which was unbelievable. I mean, he's very, very talented at that. And eventually we got to the source, and it was actually a pretty big like electronics distribution company. Like we got, you know, emails from these people,

you know, at, I forgot the name of the company. But, but they were like, it wasn't, it was like a company that nobody actually know their name, but like it's a B to B company. Because it's a B to B company, they're supplying like electronic parts to like the big, other big companies. But it was like a multi-billion dollar company. So it wasn't like their messet and mafia trying to sell it. Yes, exactly. And they wanted some, like, I think they wanted like 20 million dollars in, you know, Ephraimonia too. So, you know, we tried to line up, you know, a venture fund, you know, it was a hedge fund, actually, a hedge fund to float us the other 18 million. But the hedge fund eventually declined just saying, you know, it just didn't smell right. You know, there was just something weird about the deal.

And they were just like, we don't know what it is. It seems all legit. You know, the payment terms, you know, they were willing to take a letter of credit so they wouldn't get paid until the goods were delivered and all that. So it seemed like it was a relatively safe deal. But the hedge fund was just like it just doesn't smell right. So we'll pass. And so the deal fell through because we just didn't have the, you know, $18 million to buy 100,000 X-boxes.

So if you had 100,000 Xboxes, what was the plan to individually list all of them on eBay? No. So we actually had contacted buyers from Walmart and Target and the major retailers and they were ready to go. Really? Yeah. And they were like willing to, they were willing to pay the retail price for them at the time. And they were willing because they were going to make zero. money on this because they because it was such a hot item they were willing games and other things yeah

well because they call it a lost leader you know they'll be like hey we've got the xboxes come in a lot of people come in the store and then they buy other things like games or chargers or controllers or other stuff that target themselves you know so yeah so we would have we would have made if that deal had gone through we would have made like 20 million in profit you're great at protecting your data but lots of places could still expose you to identity theft I thought it was safe If that happens, LifeLock gives you a U.S.-based restoration agent who will stick by your side from start to finish. Phone calls, filing documentation, preparing insurance claims, your agent handles it all. In fact, we're so confident restoration is guaranteed.

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True TV, and HBO Mac. Yeah. Wow. That's bizarre, man. Yeah. And then so what was the biggest? So every day at the point where you guys start working together, that deal falls through. Are you guys just like showing up together like self like making your own schedule? Like we're going to get up every single day and start just scouring this website to try to find deals. Yeah. Like living in his apartment with him. Yeah. Sleeping there and waking up. Yeah. So after the Xbox deal fell through, he's like. like let's just do the business I know that I know we can make money on. I've been making money on. So, you know, he starts showing me, you know, how FedBizOps works, the website and, you know, starts teaching me about all the, you know, the types of guns and stuff that he specializes. And the idea was that I would actually go after other types, because he already knew the gun market, but we knew that the fuel market was very big. Energy is very big. So I started going for fuel deals. and my first contract that I actually got with the federal government myself was for 50,000 gallons of propane to an air base in Wyoming.

And yeah, it was a very intense, like, because he, you know, one thing I'll give Ephraim is that he, he was, he was obsessed, you know. He had like an obsessive work ethic, you know, like he would think of nothing other than money the entire day. And, like, he was literally obsessed. We'd wake up and the second he wakes up, he's like looking at Fed BizOps, like over breakfast, you know, before he's like, you know, he's like looking at it, you know, like on his laptop on the toilet. You know what I mean? Like that's all he would do. And, you know, while he's eating, you know, while he's talking, he even told me, he bragged to me that he would, that he loved taking calls from federal contractors while he was like having sex with his girlfriend. You know, like he just loved doing it. I don't know why his girlfriend hated it, obviously. You know, but like he would like, you know, while having sex with her, like he'd get a call. He'd be like, maybe, maybe I got to take this. I got to take this. But keep on going.

You know? And he would actually talk to. It's like he really modeled himself after Nick Cage. Yeah, exactly. No, he loved Nick Cage. He loved Nick Cage and Scarface. Yeah. It's so fucking.

Did you ever just think to yourself watching him being so obsessed over money 24-7? Like what? Like, what? Why? Why was he like this? Yeah. Was it nature, nurture? What was it? Right. So I thought about it a lot because, you know, I'm not like that.

Right. I mean, it's rare. Yeah. Yeah. Almost nobody is. Don't get me wrong. I like money as much as most people, right? And, you know, I've always been entrepreneurial and, you know, I am, you know, motivated and I've worked on my own businesses. But the level of obsession that he had was beyond anything I'd ever seen, even to this day, I've never seen anyone like that. know, and it wasn't healthy, like, and it wasn't, didn't, and it wasn't fun, you know, it was actually very unpleasant, you know, working with him was, I mean, I'm sure being him was very unpleasant, but working with him was very unpleasant just by extension because, you know, he, like, he expected everyone else to be as obsessed as he was, you know, and he'd get, like, upset if, like, you know, you weren't willing to drop everything in your life to chase this, you know,

deal that had a tiny chance of like, you know, completing. You know what I mean? And it's like, I have other parts of my life I'm interested in too. This is not the only thing I want to do. You know, so I'm not willing to work literally, you know, 16 hours a day all the time. Now, I did, especially in the beginning and especially when we won our big contract later, the Afghan contract, because I had to. So I was willing to do it if necessary. But, But I didn't want it to be like a 24-7, 365 day thing because, you know, I wanted to live life as well. So, yeah, it was, it was, it was definitely unique, you know, to put it rather than. Did you ever ask him? Like, how did you get like this?

Did he have a really, really, did you have a bad childhood? So, so his family is very interesting. He's, his, his grandfather is a billionaire. And his grandfather is this Iranian Jew who, you know, like grew up in Iran. And I forgot what year he moved to the United States. But he's, you know, like in his adult life, moved to the United States and became his grandfather became a slumlord in L.A. owns a lot of low-income housing. That's why his uncle, who's his grandfather's son, owns a pawn shop in South Central L.A.

Because it's one of his father's properties. So now his grandfather is an interesting character, even though he's like a billionaire. And I think he had like, I think it was eight or nine children with his wife. They, after like something like 40 years of marriage or something, they ended up getting divorced. And it turned out that he had never married her legally. They just married like religiously. So she wasn't. And she didn't know?

Either she didn't know. or she didn't think of it. I don't know the exact story, but like, but because of that, he tried to give her zero. You know, he was a billionaire and he tried to give her zero dollars. Right. He thought about this when they got married. Yeah, exactly. And so she sued him and I think it was like the largest alimony case in history.

I don't know what the, what it ended up being, you know, how it ended up shaking out. But I know it became, it got into the newspaper. that she was suing him for like $700 million. So that's like his family, you know, and his uncle is also like, you know, that he worked with, you know, like obsessed with, you know, like an obsessive with money. And so, you know, I'm not going to,

I know some of his family and some of his family are very nice. Like his dad is like a real sweetheart. His brothers are great, you know? Really? Yeah. And they're like very different from him. You know, so it's odd. that he you know it's not like they're all like that you know um you know uh but um it was just like

like i guess that gene or something you know like his his grandfather his uncle him you know is just like certain certain people are just like have that uh you know so his upbringing his upbringing wasn't much different than his siblings i mean i would assume so he was the oldest so you know like um you know i i don't know you know how that affected him differently But it's fascinating. I think about that all the time how people, because I know a few people similar that are like that. I always wonder a lot of them had really rough childhood.

Yeah. Yeah. So I mentioned to you before that one of my guests on here met him in prison. Yeah, that's right. Met Ephraim in prison. Yeah. And Ephraim convinced him to write his life story. Right.

He wrote the life story. Ephraim got out with it and used that to sue Warner Brothers. Right. for the movie War Dogs. Right, right. Matt Cox, yeah. And Matt Cox, yeah. One of the, the first thing, when I asked Matt, I'm like how, because, you know, I asked Matt, I'm like, how accurate is war dogs to, to the story.

He goes, well, he goes, the story is about Packhouse. He goes, the story is not really about Ephra. Ephraim, just a character, but for some reason everyone just remembers Ephraim because of his crazy personality. Sure. But he said, I said, well, how accurate was Jonah Hill's. portrayal of Ephraim, he goes, he said he made him way too cuddly and nice. I agree with him 100%. That's exactly right. Everyone who knows Ephraim will say that. He said that the Ephraim and Ward Dogs was a teddy bear compared to the real ever.

Absolutely. He's absolutely right. They toned him down. The funny thing is everyone's like, oh, is he as crazy as, you know, in the movie? I'm like, he was way crazier than in the movie. And way of a less nice person than in the movie. Like in the movie, movie, he's kind of charming and, and, you know, as he says, like, he's kind of like a teddy bear. Jonah really softens his character, his real life character a lot, a lot. Yeah, makes him a lot more likable. They did that on purpose, actually the screenwriter, so the screenwriter of War Dogs, Stephen Chin, he came when they first started writing the screenplay, he came to Miami and

like met with me for like a week and, you know, recorded, interviewed me, recorded the conversations. And he told me while he was writing screenplays, like, look, I'm going to have to down after him, you know, you know, and he's like, because we need to make him likable to the audience. No one's going to want to spend an hour and a half in a theater. Yeah, I mean, that's how Hollywood works. You know, you need to have a certain formula so that it appeals to the mass, you know, to most people in, you know, the population.

So, you know, they had to add a certain amount of action, you know, because people like action. They have to have a certain amount of comedy and they have to have a certain amount of, like, relationship drama, you know, for the girls who they're, you know, are getting dragged to the, to the movie by their boyfriends, you know? So, you know, so, you know, so for example, like the relationship drama in the movie, uh, they have, um, you know, uh, me, you know, like lying to my girlfriend about being an arms dealer and she gets super mad and, you know, like dumps me and like, that was like, you know, big relationship drama moment. Never happened, right? My girlfriend knew about the whole thing, the whole time. She was totally cool with it. She just wanted me to be making money.

we just had a child together, you know. So, yeah, but they made that up because they needed, they needed to check that box of relationship drama in a movie in order, you know, to appeal to the most, to the biggest audience. Right, right. Another, another funny thing Matt told me was one of the most memorable quotes he has from him when he was writing the life story, the manuscript. Yeah.

He said they were sitting in the cell together and he was telling him some of the stories and how he dealt with people. Yeah. And Matt said, he's like, you can't just burn. Every bridge, Ephraim, he goes. And Ephraim's response was, there's plenty of bridges, bro. That sounds like him exactly. And that's how he acts.

So he burns every bridge he ever has, you know, like after he screwed me, you know, out of the deal, there were someone took my place and then he screwed him. And then someone took his place and then he screwed him. And like on and on and on. Like every person he's ever worked with that I know of anyway, you know, has ended on a very bad note, you know. and feels like he's been cheated by Ephraim. Right. You know, that's just how he works.

Yeah. So when they started production on the movie, was that right after the Rolling Stone article came out, they started doing that? Or how did it come about? How did they contact you initially? Right. How much involvement did you have in the production?

Right. So the Rolling Stone article came out in 2011. Because they, so the story actually takes place, 2006, 2007, 2008. But so I left AEY, the company, you know, that we were working under, together, Ephraim's company. I left in July of 2007.

You know, he pretty much informed me that he didn't want to, didn't feel I deserved the money that we had agreed that he would pay me. And I was like, well, then I'm, I'll see you in court. And so I left. And then in like March of 2008. The New York Times published their fateful front page article, which was not very flattering about us. And that caused the U.S. Army to cancel the contract and put us and the Justice Department

decided to suddenly charge us with, you know, with fraud. And so that created a huge political scandal. Like Congress wanted us to testify. They want us to testify in front of Congress, and our lawyers told them, well, you know, they're going to plead the fifth the whole time because there's a criminal investigation. And so then they decided not to have us, you know, but they still, like it's on, there's C-SPAN clips on YouTube about them talking about us. It's really weird. But that got the attention of Rolling Stone. Rolling Stone wanted to write a feature-length article about us. but, you know, our lawyers told us we can, you know, speak to reporters. So the reporter, Guy Lawson, who ended up writing the book, he contacted my lawyer and told

him, you know, I can, like, what if I guarantee you that I won't publish anything until you give me permission, you know, until like the legal jeopardy has been done? And my lawyer said, well, if you, you know, if we have that agreement, then you could interview, you know, David. And so we made that agreement. And he also made an agreement with Ephraim. And Ephraim gave him, I think, one or two interviews and then decided that he wanted to do his own thing, like write his own book. Him and Matt Cox.

Yeah, exactly, which he ended up doing, exactly. So, Guy interviewed me, interviewed, Ephraim, you interviewed a few of the other people involved in the story. And then he sat on the story to his credit for three years while our legal issues were resolved. It took three years for all that to be resolved. But by 2011, you know, I was already off. I had been sentenced to seven months probation. Got very lucky, you know, avoided prison. But after that was over, the Rolling Stone article was published.

And that got the attention of Todd Phillips. And at the time, he was in the middle of directing a hangover to. And he thought this was an amazing story. and, you know, right up his alley. So he optioned the story, you know, from Guy. He optioned the article. And he optioned my life rights, they call it. Now, he didn't have to option my life rights.

The way the copyright or the way the laws work in the United States is that if your name appears in any public newspaper or like publication, anyone can make a movie with your name in it and they can make up anything. they want about you. First Amendment, free speech. Right? Yeah, yeah. They don't have to pay you a penny. They could say anything they want. You have no control. You know, because you are considered a public figure if your name appears in the paper. So, you know, to his credit, he didn't have to give me a penny or, you know, be, you know, at all, you know, have me involved. But he wanted me to be involved because he wanted to be a bit more authentic. So they bought my life rights. And, and, you know,

And because of that, I consulted on the movie. They, Stephen Chin, the screenwriter, came to Miami and interviewed me for a bit. And, you know, and he would call me up occasionally while working on the screenplay to get various details and ask me for more details on like various stories and stuff like that. But at the end of the day, I had zero control over the script. You know, they didn't ask my permission for anything. They did send me drafts just to get my opinion on it. And I gave him my opinion, but like they made the movie that they wanted to make. Right.

And changed it however they wanted. Were you involved in any of the filming or anything like that? Did you meet any of the, did the act? I know sometimes actors like to meet the characters. Yeah. Yeah. So I met Todd, the director, Todd Phillips. I met him early before they started filming.

He wanted to meet me. And, you know, he came to, he was scouting locations in Miami. And so he took me out for a drink. It was cool to meet him. And then when, so, and he wanted me. me to have a cameo in the movie. So I have a cameo in the movie. I'm like playing guitar and singing in the old folks home, you know, while Miles Teller, who's playing me is trying to sell bed sheets. Like Tarantino, yeah. Yeah. And so I was, I went to L.A. to shoot that

scene. And so I met, I met Miles there. And then when they were filming in Miami, they invited me on the set a few times. So I met Jonah Hill and Anna Darmus and, you know, the people who were filming in my end. Did Jonah ever meet with Ephraim? He didn't. No. Yeah. I don't think I don't.

I'm not sure if it, who's, whose choice that was. I'm not sure if it was Ephraim didn't want to meet Jonah or Jonah didn't want to meet Ephraim. I'm not really sure, but I know that they never met. Yeah. Yeah. It reminds me of,

it reminds me of Leo DiCaprio playing that guy, I forget his name, Wolf of Wall Street. I know he like met him and like spent a lot of time. Jordan Belfort. Yeah, to try to like gather more information and disrespect on his persona. Just try to like portray it better. Yeah. Yeah. No, Miles didn't do a character analysis on me. No, no. They just wanted, you know, Miles to be like, you know, the good guy, which I was happy to let him play. So, yeah, I'm happy with his portrayal of me. I've got great hair in the movie. It's perfect.

That's hilarious. Only Hollywood. Yeah, exactly. One of the first, going, reeling back again to the beginning after the Xbox deal, one of the first big arms deal, as you did was to supply the uprising in Nepal. Is that right? So we we attempted to do that, but or I should say Ephraim attempted to do that. No. So it was it it it wasn't to supply the uprising. It was actually to supply the king, the king, right, who was trying to suppress the uprising. Exactly. Through one of Ephraim's contacts, he, they were asking for like attack helicopters and things like that. And he tried to, you know, to put together a Save the King package, as he called it. But it ended up falling through. And I don't, I think because peace broke out, I think is what happened. So like, there wasn't enough time to do that deal. Did you,

did you have any objections? Did you talk to him about that? I mean, like, dude, this is like fucked up. Yeah. I mean, it kind of bothered me, to be honest, because I was like, you know, people are rebelling against a king and you know you know it's uh you know it's kind of seems to be supplying the tyrant kind of situation and are you sure that's even legal you know and he's like he's like bro just let me worry about that okay you just keep on working on your fuel contracts yeah yeah i wasn't involved in that and i didn't want to be so yeah so yeah you guys weren't splitting any kind of profit it was basically just you would take commission from the deals that you yeah that you landed yeah yeah okay yeah i wasn't i didn't own his company like any share of

in his company. He was still doing his own deals. You were just basically like your individual. Exactly. Broker sales guy. Yeah, I was working on a commission. Yeah. Okay. Yeah, that's, it's interesting. You know, his ability to value money and making deals over anything else.

I feel like if you're going to be in that business, you have to have that mindset. Yeah. Like you, you, it's a weird moral compass. Yeah. Well, I mean, I, I wouldn't say you have to have that mindset because plenty of people make a, you know, a legitimate living legally and they would argue morally in that business, you know, like there's some people

who say that, you know, dealing with weapons or ammunition, you know, at all is, you know, morally bad, right? You know, full stop, right? That's, there's, there's those people and I've met those people and I've gotten hate from them online and all that, you know. People that just hate guns. Yeah, in general. But like I, you know, I don't think right now most of those people would say that, hey, you know, the people supplying with Ukraine, you know, with weapons to defend themselves from the Russians, are those people bad? I don't think so. Right.

You know, I think most... Those are the same people that are saying give Ukraine more weapons. Exactly. Right. Exactly. You know, because, you know, a gun can kill someone. It could also defend yourself from getting killed. So it's a gun isn't a bad thing on its own.

It's a tool, right? Right. It's like nuclear energy. It could supply power. It could make a bomb. A knife could chop up your vegetables or chop up your neighbor. You know, it could, you know, most technology is dual use and it all depends on how you use it. You know, that's the key.

That's interesting. That's an interesting perspective. Another thing about your story is I didn't see anybody that was involved, correct me if I'm wrong, but the only guy who might be questionable, I'm not sure. would be the Swiss arms dealer, Tomé, Tomé, Tomé, yeah. But other than that, like, it didn't seem like they were really any bad guys. Like, you, Ephraim, the guys you were dealing with in Albania, all the middlemen, I didn't really see any bad guys. I just saw people that were taking advantage of opportunities. Right.

To make money. Yeah. They weren't necessarily evil. Right. Does that make sense? Right. Well, I mean, I don't think anyone views themselves. as evil, right? That's, you know, even, I'm sure Hitler, you know, thought he was doing the right

thing, you know, for his people and blah, blah, blah, you know, it's, I don't think, very few people consider themselves evil, you know, but, yeah, I mean, it really depends on where you come down on the various politics of what you're involved in. So, you know, I mean, we were supplying the U.S. Army and they were supplying with our weapons and ammunition the democratically elected governments of Iraq and Afghanistan, you know, and like the government of Afghanistan was fighting the Taliban. And so I didn't feel bad about that, you know, because I thought that as with all the problems that the government of Afghanistan had, and there were many, you know, lots of corruption, lots of everything, you know, they were way better than the Taliban. And, you know,

I thought that on the whole on overall It's better that for those people to be in power than the Taliban would be and as we could see now You know that the Taliban took over again It's back to where it was before and it's way worse for all those people So so I think it's it's it's You know I think looking at something as being oh you're doing this this is bad right? You know period is, you know, life isn't like that. You know, life is complicated, you know, and there's never a good or a bad choice. There's often a bad or a worse choice. And you have to decide,

you know, like, what's the least bad, you know? And, you know, supporting the least bad solution doesn't mean that you are bad because that solution is not perfect, you know, it's the world you live in. Now, always try to come up with a better solution, you know, and, you know, and everyone makes their own decisions of where their limits are, you know, like, I know a lot of people would be like, oh, just even touching that stuff, you know, or, you know, the fact that there may be a chance that, you know, that something could go wrong is, you know, too much responsibility. I can't take it, you know, so they won't do it. And other people are like, you know, I don't really give a shit, you know, like, you know, once the guns are out of my hands, it's not my problem, you know.

So everyone has to have their own moral compass of, like, what they're comfortable with. And, you know, I won't say that I was always comfortable and everything that I experienced in that business. There were definitely some things that made me uncomfortable and made me feel bad about, you know, being involved in it. But, you know, I tried to remain true to my values as much as I could. Who was Heinrich Tome? Can you explain to people listening who that was? And what was his specific relationship to the United States? Right. So Heinrich Tomei or Henry, as most people called him, was a Swiss arms dealer in the movie he's played by Bradley Cooper, who made no attempt to make a Swiss accent. It sounds like an American in the movie, but whatever. I can't imagine what a Swiss accent would sound like. It's kind of like a very like like like a softer German accent.

Okay. Yeah. Well, I mean, Switzerland, you know, they speak a German, Italian, French. and I forgot the fourth language. They have like four languages they speak. It really depends on which Swiss person you talk to. Their accent will change depending on like what language they grew up with. But I believe that most Swiss people speak a form of German. Okay. Though it's like a little different than the German German, you know, so they sound a little different.

But yeah, but Henry, he also didn't look like Bradley Cooper. You know, Bradley had these like really thick glasses and he looked like he was always hung over. the character was great. I'm not not bashing Bradley's great actor, you know, and he made his own version of the character and he did that on purpose. You know, but yeah, but not based on the real guy. The real guy, he was much more along the lines of a Swiss banker. How many times did you interact with him? Several times. I met him, met him in Vegas, like in the movie, but not the way they portray it. We didn't just bump into him randomly. We were actually introduced to him by by the Ralph character in the movie,

who was not a Jewish guy who owned dry cleaners. Actually, a Mormon guy who owned machine gun factories. His name was Ralph, though. Tomato. Yeah, exactly. It changed the character a little bit. So Ralph had been doing business with Henry for a long time, and he introduced us to him.

And so we met him in Vegas, I think the first time. We met him in Paris another time. And we talked to him on the phone a lot because he was one of the best in the business. like he had connections everywhere, you know, like especially in Eastern Europe, the Balkans, that was like his specialty, which is how he, you know, hooked us up with the Albanian deal, you know, that ended up being our downfall, you know, because he had such good connections. And what was his relationship to the U.S. at that time? Right.

So he'd been in business like, I think he was like Ephraim, like since he was 18 years old. And he was like in his 40s at the time. So he'd been doing this business for more than 20 years. And I know. that he got, I believe he was on some like amnesty international report for supplying some dictators in Africa. So he was, you know, on like a state department watch list. It wasn't illegal for us to do business with him. I do know that. But I don't think he would be allowed to do business directly with the United States. So, so that's why, you know, he needed us, you know,

to be his kind of like go-between to sell to the United States. And he was an incredible source. You know, he got, he had, you know, connections with everybody, as I said, and at incredible prices. So it gave us a competitive advantage, which was one of the reasons why we won a lot of the contracts. In hindsight, do you think the U.S. government was aware they were using you guys as a proxy to deal with him? They definitely knew because we actually put it in the paperwork, you know, when before

before giving us the contract they actually asked us to list sources of supply and he was one of them so yeah so they knew we weren't hiding it so yeah but they

either they didn't check or they didn't care I'm not sure which one that was but they but yeah they could have known if they looked yeah yeah I mean overall it seems like the United States government was intentionally turning a blind eye

to who you were dealing with because you guys essentially were... Well, I don't want to get too far ahead of the story. Right. So in 2006, when the U.S. government decided to arm the Afghans to fight the Taliban, they originally intended to use a Russian arms company.

Yeah. Yeah, Russo-Baroni. And that was made public that they were going to do that. Yeah. And they actually, so they, they sent, I think that they sent like a fax, because they still use faxes, governments in general, but particularly Eastern Europe. They, I don't, you know, they just, they love facts. So they sent Rosseboron a fax like requesting like the list of munitions. And the Russians thought it was a joke because it was such enormous quantities. They were like, this is not real. And I think they like laughed it off. And then, you know, the State Department had to contact them a few times to say, no, no, no, it's not a joke. We really want to buy this stuff. And if I recall correctly, what happened was at some point the Russians got on the blacklist because they were supplying nuclear technology to the Iranians.

And so because they got on a blacklist, now the U.S. couldn't buy from them legally anymore. So they had to put it out for open bid to buy from other sources. because the Russians were the only ones who could supply the entire contract, you know, every single, you know. And one fell swoop. Yeah, in one swoop, a single source, right? Because they have massive stockpiles, as I mentioned earlier. But there's lots of stockpiles spread around all the other Warsaw Pact countries as well, you know, the Balkans, Eastern Europe. But not a single country could supply all that. So they needed someone like a logistics. aggregator, I guess you could call us. You know, it's someone to, they didn't want to deal with all these different actors, these different suppliers. So they wanted to deal with a single source.

So what they did is they put the entire thing up for contract and asked us, you know, asked the middlemen in the business to put together a package for them. And so we went and got quotes from pretty much every country that we could think of that may have these items that we could legally buy from. and put together the best combination of, you know, items of, you know, what it costs and, you know, what the quality was and where it was, depending on, like, you know, how much the logistics would cost to ship it to Afghanistan. So when we combined all that together, you know, we had a very long spreadsheet. And we got the most competitive price, which is by far, which was why we, we won the contract. How did the $300 million

Afghanistan deal come about? What was that conversation like when you first learned about it? So I was, I first learned about it. I was driving home to have dinner with my girlfriend and Ephraim calls me up

and he's like, he's like, dude, dude, you got to get to the office right now, right now, right now, right now. I'm like, I'm about to go have dinner. I already made plans, you know? He's like, fuck that, fuck that.

You want to get rich where you want to go, you know, like, you want to like, you know, like, you know, hang out with your girlfriend will be sucking your dick after you have much money

you're about to make, you know? And, you know, I'm like, I'm like, this could wait till tomorrow. It's not an emergency, you know, just tell me. All right? Just tell me over the phone. He's like, he's like, fine, fine. I can't believe you. You're not serious about this. You know, it was like, everything revolved around like. And so he's like, he's like, he's like, I just saw this massive contract. And it's all the kind of stuff that we've been dealing with already. So we've got great connections for it. This is going to be the biggest thing we've ever done. You know, you know, and, you know, he's like, it's all Warsaw-packed stuff. So, you know, the U.S. can't get it.

You know, they don't manufacture it in the United States. They're going to need to go through brokers, you know, like us, and, you know, they're going to need to find suppliers. And we already have all the past performance for all this stuff because we've already delivered in much smaller quantities, you know, these type of munitions. So he was super excited. And then we, you know, usually we had a deal. that we would split, you know, the deals that I worked on 50-50, you know, because he would, like, put up the money and he would do the final negotiations and we would do the contract under his company and all that. And I would do all the work. And that was kind of like our deal. And he's like,

you know, usually we do 50-50, but for this, you know, I, I already got a lot of these contacts, you know, this is kind of my bread and butter. So we'll do 75-25. But he's like, but don't worry, this contract's so huge. You're going to make millions off this. I'm like, okay, fine. I'm good with it. Did you say initially how big it was? So we had no idea, you know, like what the final number was going to be because we hadn't

gotten prices on it. He just saw the quantities of like munitions that they were asking. And it was like the first item was like 100 million rounds of like AK-47M, 7662 by 39. There was like 100,000 grenades. You know what I mean? Like there's like millions and millions and tens of millions of dollars at minimum, you know. you know, we knew like right away these quantities. We'd never seen them before.

It's like literally like 20 times bigger than anything we'd ever seen. And that was like bigger than the biggest things we've seen. So it was massive. And so we started, you know, he started contacting all the people that he, you know, already knew. And, you know, my job was to pretty much scour the internet and the world and find any sources of supply that he had missed, you know, in his few years of that. doing this. So, you know, for these types of items. So he gave me a list of, you know, all the

people he was already talking to. He's like, don't talk to these people. These are my contacts. Anyone else, you know, is fair game. Go for it. So, you know, I spent probably like a month and a half. I don't remember the exact time frame, but of, you know, just like all day, you know, I would go through these massive lists of like armed suppliers that there were these directories online. And half of the entries were like, you know, old and not relevant anymore. And the phone numbers didn't go anywhere, you know, and most of them didn't have email addresses. You have to call up and then they don't speak English. And you have to, you know, find the one guy in the factory that speaks English and his English is terrible.

And then he gives you like a fax number. You have to fax them what you want. And then they like, you know, it's like a whole rigmarole. You know, they're not built for doing business really. because these are like all the remit where we were finding uh you know these items were only made in the warsaw pack countries because it was all warsaw packed munitions it was it was all munitions it wasn't weapons this contract it was uh the idea was to supply the afghan army and police for like the next 30 years you know that was like the idea um because this was the last year of bush's presidency

he thought that the next president might be a democrat which he was right you know obama but he thought that the next president would pull out of Afghanistan immediately and leave the Afghans high and dry, which he was wrong. I mean, you know, it took until 2020, or was it 21, 2021 before we pulled out. So Bush wanted to arm the Afghans with as much stuff as possible before you left office. So that's why they did this massive contract. So this contract was just for munition. So everything that was used in the weapons. So like everything from like pistol ammo to like anti-aircraft. F rockets and like tank shells and mortar shells and, you know, big things, grenades, you know, big things like that. So, but it was all Warsaw Pact because that's what the Afghans, you know, for the people who don't know, there's two major weapon systems in the world. There's the NATO standard, which is what the United States and the West uses, you know, like the M16.

And then there's the Warsaw Pact standard, which is what the Eastern Europeans, the former Soviet republics use like the AK-47. And, you know, they're different. like bullet sizes. You can't like put the bullets of one gun into a different gun because, you know, to the other standard because it won't fit. So, um, the United States doesn't manufacture a Warsaw pack stuff mostly. So, and they needed massive quantity. So the only place that they were going to make this was in the former Soviet republics. And a lot of the Soviet republics had these really old, you know, they've been building these stockpiles up during the Cold War, um, you know, which is where we've already been supplying. And, you know, which is where we've already been supplying. similar things to Iraq, to the, to the U.S. Army in Iraq, who was supplying the Iraqi army because the Iraqis and the Afghans were both trained in the Soviet standard. So, you know, that's why they needed that, because the Iraqis were trained with AK-47s, not with M-16s. So that was the reason for one guy, yeah, okay.

Yes, and there's a good reason for that because the AK-47 is designed for soldiers with a lot less training. You know, the AK-47, the famous example is the AK-47 is kind of like your Kerala, you know, like it doesn't have the greatest performance, but it lasts forever. You barely need to maintain it. And it works. Right. You know, you can bury it in the mud, pull it out and that works perfect. It's famous for that. Yeah. The M-16 is like a Ferrari, you know, it works amazing, but it's finicky. You have to maintain it. It breaks easily. you really know how to use it. You have to know how to use it and practice with it and all that stuff.

You know, so you have to be much higher level of training to use NATO weapons in general. It goes to the philosophy of how the West and the East treat their military structures. You know, the Soviet Union, you know, under Stalin, their whole philosophy was just quantity over quality. You know, like they, I remember seeing some documentary about like the tanks that they built. I think it was the T-72s. I forgot which tank. But, like, they kept them having the bolts, like, falling out of the tank treads.

So they did as they put, they installed this, like, little piece of wedge of metal, like, along where the bolts would pass by so that, you know, like on an angle. So as the bolts, as they're slipping out of the tank tread, they would get knocked back into the tank tread as it would pass this, like, little wedge so that they wouldn't have to secure the bolts on the tracks. Right. So that's kind of how the Soviets built their, that was like their general philosophy. But because they kind of, you know, they built it cheap, they were able to build massive amounts

and they were able to overwhelm the Germans in World War II. And that's kind of continued. So they have much lower levels of training of their soldiers than the West does. But they have more of them. And they have, you know, so, you know, it's like less sophisticated, but it's easier to use. so, and it's cheaper. So the United States, you know, decided to supply Warsaw Pact weapons because, you know, one, the people they're supplying the Afghans and the Iraqis already were trained in those

weapons, but also bonus much cheaper, you know, than Western weapons. And the United States wanted to spend as little as possible, you know, in this endeavor. So, so they put out this contract for all the munitions. And we, you know, scoured the internet. We got all the prices. And eventually it took us a few months to gather it all together and to make our very complex spreadsheets, you know, which took into account, you know, the cost of the goods, where it was located, how much it would cost us to transport, you know, to Afghanistan. Because Afghanistan is a landlocked country and it's surrounded by unfriendly countries like Pakistan, which is very unstable. you know, then there's the central, you know, Asian countries.

And so you need to really fly everything in there. You can't drive it because it's at high risk of getting, you know, hijacked. If you have a truck convoy going from like the port of Karachi into Kabul, it's not a very safe route. You know, there's a lot of warlords over there who would love to get their hands on a huge convoy of weapons. So, you know, you have to fly it. Now, flying is way more expensive than shipping, you know, like minimum four or five times more expensive depending on the route, usually a lot more. But so because of the, we had to fly everything, we, you know, logistics was a major factor

in the cost. So we had to, you know, build these complex spreadsheets of like how much it would cost, you know, per volume, per weight to fly it into Afghanistan from various locations. And after we had it all figured out and we got our final price, Ephraim decided to put a 9% profit margin on it for us because he figured that everyone else will probably do 10 so that we should do 9, just to undercut them. And it turned out that he had way lowballed it. It was a famous scene in the movie where we find out, you know, about how much it was. That's a real number, I think it was 53. That scene's actually in the trailer, too.

Yes, it's in the trailer, that's right. So it didn't happen like that. We did find out how that we had lowballed it by about $52 or $53 million, but we found it out over the phone, which obviously makes for a less exciting scene on film. That scene did happen where, you know, it wasn't me, actually. It was Ephraim and Ralph went to Rock Island Arsenal to meet with all the government contracting. officers, you know, before they gave us the contract. So they, they met Ephraim in person before giving him that contract. He brought Ralph because Ralph is an older gentleman. So he figured because he's so young, he needed like an older guy to, you know, make them feel a little bit more secure.

So yeah, we, we submitted our bid and then like a few months later, we didn't hear anything for a few months. And then they suddenly came to us. They're like, you're in the final stages. We need to do like, like, I think it was like four or five different types of audits. They wanted to look at our books. They wanted to look at, you know, like, you know, like our accounting system. You know, they sent like a team of people to our office to, you know, to check us out. You know, they did do diligence on us. How long, yeah, how long from the point where you submitted the bid? Well, actually, first of all, working on the bid. Yeah. It took you how long to work on that to build that bid? So if I recall correctly, the initial work was about one and a half months,

something of like intense work. Like I was working all night, you know, because I was always trying to get people on the phone and they're in like different time zones. And, you know, you have to, like sometimes they'll only call you back. They won't like, you know, everything's by phone for some people. So you have to be like available at any moment, you know, because if you miss their phone call, they won't like call you back for another week or ever, you know. So it was a huge pain. to deal with them. And then you had to include the price of fuel for air transport and everything else. We have to calculate all that. So yeah, so that took about a month and a half. And what was the price? So the final price, including our 9% profit margin was. So, sorry to interrupt. So you came up with the

price and then of what it would cost you then you just added 9%. Correct. Okay. That's how we did it. We figured that would be our profit margin. Okay. So including the profit margin, the entire total price was about $298 million. This is Euphoria Calvin Klein, the new elixir collection, featuring three perfume intense scents, inspired by a unique orchid accord, paired with vanilla,

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ultra-concentrated for amplified impact and lasting power. Find your euphoria, Discover the Euphoria Elixir Collection by Calvin Klein. And, you know, just for reference, the biggest thing that we'd ever done under AEY previously, I think, was like $18 million in total, which, you know, EFRA made a few million dollars from. So that's not, nothing to sneeze at. You know, he made millions of dollars from that contract, that $18 million. But it was like less than 10%, you know, 7% of the, you know, this other contract. Now did you guys, I'm sure you guys, like went through this with like a fine tooth comb.

Yeah, and made sure that it was it was solid airtight. What was the did you email this quote? Did you mail the quote? What was it like how did you send it? And what was that moment like where you guys are like yeah press the button? Right. So it's interesting because most of the government quotes, you just email it to them or you like upload a file on their website, you know, depending on which department you're working. You're your your the contract is for. You know, like sometimes if you're selling to the state department. versus the army, they have like a slightly different system, or at least they did. I mean, I don't know if they've changed now. But for this particular contract, and I don't know why they did this, but they wanted everything in paper, you know, paper and CD of all things. You know, they didn't want us to like upload it to the site. So we had to print out everything. It was like a massive stack of papers like that. And, you know, with all the supporting documents and everything and a CD where we had like spreadsheets on it, you know, certain files that. they requested. And then we had to overnight it to them. But Ephraim had this horrible, uh, habit of always doing everything at the last second. I don't know why. It's just what he did. And so like, you know, we, we had everything done and we waited until the day, the deadline, you know, like we, if we overnight it, it would get to them the next day. So it was like the day before was the deadline. And like, it was like four o'clock. The, the, uh, the post office is going to close at five. And, you know, he and he was just like, well, should I do nine percent? Should I do

eight percent? What if someone else is thinking nine percent? Because everyone else is doing 10? Yeah, he was like, he was torn, you know, eight or nine percent, eight or nine percent. And he just couldn't decide until it, I was like, Ephraim, you have to decide because it's like four 30. And we're going to not bid on this if you keep on dawdling. And finally, he's like, fuck it, fuck it, you know, nine percent. And we, we put it in into the spreadsheet, printed it all out and then it was like only 10 minutes until the post office was going to close we get into his car and he's like like going 60 miles an hour down residential like you know streets you know to like you know skidding round corners to get to the post office because he had like

only a few minutes later you're like running in and we like literally made it by like two minutes left you know before like it closed and finally like submitted it um yeah and it was just i don't know why he did he did that for like everything everything was like like at the last second like everything's super stressed it was just like he kind of like lived off the stress you know like like yeah that's just was his personality feed on the stress yeah yeah and then so after that there was some signs that they were interested right yeah they like you were describing like they were they they were calling you they were trying to audit the company yeah and what else were they doing so they there were a few different audits that they had to do so uh first they didn't

speak to us at all for like, I think something like two months, you know? Yeah, we were like, oh, well, we probably lost, you know, that's why we didn't hear anything. You guys just kept moving on. Yeah, we just started working on other things, you know, we're like, okay, we spend the last two months working on this huge thing, you know, it's a role. We didn't actually, we thought it was a low chance of us winning. Oh, really? Yeah, yeah. We didn't think that we had a high chance. We were like, you know, everybody in the industry is going for this contract, including, like the biggest players, like general dynamics, multi-billion dollar company, ATK, you know, like these are like publicly listed companies.

They have like a department with like 100 people who are doing what we're doing, you know, just two guys, you know? So we're like, you know, these guys have been doing this business for decades and they have like huge teams of people.

They're probably going to beat us. But we technically, um, uh, qualify to bid, you know, because we have the past performance. So we could bid.

It's not like we're automatically disqualified. So we have to bid, you know, because what if we win? You know, it's like a small chance, but such a big upside. So that's why we bid on it. But we didn't really expect to win.

We thought it was a small chance. And then like two months later, suddenly they called us up and they're like, you know, we have to do some due diligence. You know, we're making our final decision soon. And part of that final decision, we have to do all these audits. And we're like, whoa, we're like in the final running. You know, like we didn't know that they, that we, were the number one choice or anything. We thought maybe they're like, you know, they narrowed it down

to like three or five companies, you know, out of everyone who bid. And, and I think it was something like 30 or 40 companies bid, something like that. And, you know, they narrow, I think they like, we thought that they were like narrowing it down and now they had to do all this like due diligence on all the companies because it's a massive contract. They didn't usually do this. In fact, we never had this done on even the $20 million contract. They never did this. But for, For a $300 million contract, it's a whole other level of, you know, homework that they need to do. And so they wanted, you know, as I mentioned before, they wanted to see our accounting system. They wanted to, you know, they wanted to see what our financials were like.

They wanted to see that we were able to afford to deliver on this contract. Because the way the U.S. government works is they make an order and then you deliver to them. And then 30 days later after you deliver is when they pay you. Right. So you need, and most suppliers are not going to give you credit. So you need to have the money to finance, you know, to buy the goods in order to sell it to the U.S. government and wait 30 days, you know, before you get paid. Right.

So, you know, having the money to float that deal, you know, is critical. And so they did a financial audit of the company. and they did like a sourcing audit. They wanted to know where we were going to get everything. That's where I mentioned that, you know, we listed Henry, or at least Henry's company. And, you know, we had to tell them where we were getting everything, what our logistics plan was. You know, they really wanted us to tell them how we were going to do everything. And they sent, you know, like auditors to our office.

You know, we had to. because Ephraim had never, like, done his books, like, ever, you know, like, he literally, he didn't have an accounting system at all, you know, everything was the seat of the pants. And so they wanted to see an accounting system. So he hired an accountant, and he's like, hey, government wants to see an accounting system. We have to build it. And the guy's like, what you haven't been doing, your accounting, like, for the last two years, you know, and everyone's like, no, I just, you know, transfer money and get paid and,

you know, I know I'm making money, but that's all the matters, you know. And so he had to like go and backtrack and all the deals Ephraim had done and input it into an accounting system so that, you know, it looked like Ephraim had a rock solid accounting system that had been going back a few years, you know. So that was just like one component of it. And, you know, then they asked them to come and meet them in person in Rock Island Arsenal, which is, where the contract was being managed out of. And that's when he took Ralph, you know, and met them in person. So, yeah, I mean, it was intense.

And they actually did tell him that he underbid by 50 million. He did, but not in that scene. He told, they told us over. Right. It was, I actually am the one who found that out because I was the one dealing with, this was already after we had won the contract and we were already starting to, like, deliver. And I was talking, I kind of became friendly with one of the contracting officers. And, you know, I was kind of just schmoozing with him on the phone, you know, and, you know, just talking.

And he's like, oh, you guys, you know, you're really kicking ass. You know, you're really saving us some money. And I'm like, oh, is that right? And he's like, yeah, yeah, you were like way cheaper than everyone else. And I'm like, really? How much? And he's like, well, I shouldn't be telling you this, but between me and you, you know, you guys came in like, 53 million under. I was like, oh, my God.

And I told that from him, and he's like, fuck. fucking couple of shlameels he was so pissed he was so pissed he's like we could have made so much more money yeah yeah he was mad what was it like what walked me through when you guys found out you actually had won the contract yeah so um it was i think it was january of 2007

and uh i was I actually was just getting home I was still doing massage therapy occasionally I was winning some contracts here and there, but I still had like a few like old time clients. And, you know, I didn't like I didn't know like how long I would be in the contracting business. And, you know, the contracting business was like you like starve for months and then you get a big payday. And then you starve for months and like you bid on like 10 different things and you lose them all, you know. And then you get one contract and it makes up for everything else. It was very unstable.

And, you know, I had a kid coming. So I kind of was like keeping my other businesses alive, you know, while, while I was trying to get into this whole thing. Because you weren't making any money during all this from Ephraim. Correct. Yeah. I mean, I did make some, I did win some contracts, but they were relatively small, you know. And Ephraim, of course, insisted that I put all the money that I made from the contracts that we had won together into financing the other contracts. So he didn't let me pull any money out, you know.

So and that was eventually how he screwed me out of everything. And I guess that was his plan. You know, I was an idiot and I agreed. You know, he's like, yeah, why should I finance everything? You've got something. You weren't an idiot. You were fucking in your 20s, dude. Yeah.

Well, I mean, I trusted him, you know, which I shouldn't have. So, you know, but yeah, we all live and learn. Yeah. Yeah. Yeah. So when you find, when you find out, like what was going on when you found out? Right. So I had just finished a massage.

I was getting home. just to my apartment at a little apartment. I was driving my little Mazda protege, tiny little car, and he calls me up, and he's like, I've got good news and bad news. And I'm like, what's the bad news? And he's like, the first task order is only 600K. Task order, the way they work it is they have the overall contract, or the base contract, and then they have specific orders against that contract.

So the whole contract is like 300 million, but then they order pieces of it like at a time. So they'll be like, okay, give me 30 million in the next three months. And then after you deliver that, they'll be like, now give me another 50 million, you know, three months after that. You know, so it's like over the, and it was supposed to be over the course of a two-year period. So legally, the government wasn't required to order the entire $300 million contract. They say they were planning on it, but they weren't legally required to. the only legal requirement for them to order was the first task order that they that they give you with the award. So, you know, we were wondering, we were like when we were discussing this, we're like, you know, these numbers, the logistics only makes sense if we have the big numbers because then you get the economies of scale.

You could, you know, strike deals with the aircraft providers, you know, for, you know, large numbers of flights and get low, low transportation costs. but if they only give us some, if they kind of like, you know, if they turn out to change their minds on ordering these massive quantities, then we're kind of screwed because then we don't get those logistics deals.

You know, those logistics discounts and then we aren't making money because that's, you know, it's not cheap enough for us to make a profit. And so we were nervous, you know, like what if the government kind of screws us like that?

And so, you know, he's like, well, you know, the bad news is the first contract, the first order, the first task order is, they call it, is only 600K, which is very small compared to $300 million. He's like, and I'm like, well, we won the contract.

And he's like, fuck yeah, we did. And he's like, we're going out to dinner right now. We're having champagne and cocaine. Oh, that's hilarious. Yeah. And he's like, let's go. You know, he's like, I'm picking you up. And, you know, he takes me to like an Italian restaurant.

and like he orders like, you know, champagne and he's had this like little bullet, you know, it's plastic bullet that like, like, filled with coke. Yeah.

That he could like, you know, sneak Coke under it. And he, he was right in the middle of the restaurant. Right in the middle. He had, he had his like napkin and he was like,

you know, like as if he was like blowing his nose, you know, and he like, I'm not, not really into cocaine. I never, I mean,

I've tried it, you know, but like, never was a big fan. But like, he was like insisting. He's like, you got to do this.

We're celebrating. you know he's like you're drinking more champagne you're doing more cocaine you know he goes a lot that i mean it's the perfect drug for that business yeah yeah you know it's odd because he did a lot of drugs like different types like and the weird thing was is that he was functional like almost no matter how fucked up he was like he would be blasted off his mind and then he would get a call from the government and he would speak coherently and like just blah blah blah blah blah blah as if he was like sober and then like he'd hang up the phone and he'd start teetering around again it was really weird really weird. The one thing that I saw fuck him up was when he would take sleeping pills, you know,

because he had trouble sleeping. And so he got- Too much coke, you can't sleep. I guess. And also stress him. He's been screwing over a lot of people and who knows, you made a lot of enemies, you know, I don't know what, I'm not going to make a judgment of what kept him up at night. But obviously he was comfortable enough to screw people over. So maybe it didn't keep him up at night. But he couldn't sleep. So he got sleeping pills prescribed. And, you know, after he would take the sleeping pills, he was such a workaholic. He'd still try to continue working, even though he had taken sleeping pills. And sleeping pills, anyone who's taking them knows.

And if you try to stay awake after you're taking sleeping pills, your brain doesn't work very well. Losingate. Yeah, like it's as if you're dreaming, but you're awake. And your logic circuits don't really make sense. Like you start, like, saying things that are really weird and don't make sense. And so, like, I would see him, like, get on the phone with, like, a contracting officer from the government and start saying things that, like, were, like, like, did not make sense.

And I would have to, like, get the phone. I'm like, I'm from go to sleep. And I'd like, I'd take over. I'm like, excuse me, Sarah. Yeah, he's, he's a little tired. He's been working real hard, you know. So, yeah. So that was the one thing that, you know, I saw, you know, really, really messed him up.

But like, Coke, alcohol, weed, you know, everything else he could get his hands on. You know, he was a big fan of pretty much anything that would mess him up. He could work through all of it. That's incredible. Yeah, one of the things that really stuck out to me in the book, especially is like waking up, ripping the volcano bong and then going to work. Yeah, yeah. Like, I can't work when I'm stoned like that. Yeah, yeah. Me neither, actually. I mean, I'm a fan of weed, you know, I'll be the first to admit it, but only when I'm like, chilling, you know, like I can't work when I'm on weed. It's, it's, you know, my mind wanders, you know, like I can't focus. But he would take huge bong rips and just like go right to work and, go on spreadsheets and start scanning FBO and talk to people as if he had just, you know. That's so interesting. Yeah.

Yeah. Okay. So let's go back to your contract. You get the contract, champagne and cocaine. Now you guys have to start fulfilling the contract. And you guys realize that there is a embargo on Chinese ammunition. Right. At what point did that happen and why did that happen?

Right. So while we were bidding a contract. they had you know every time so whenever they have a request for proposal RFP as they call it right they always have the the rules of like what you have to follow in order to you know to meet their requirements you know so like for example when you're dealing with clothing you know they have certain laws that certain percentage of the material the textile needs to be grown in the United States, certain amount of the manufacturing has to be done in the United States could only be transported on like, you know, American crude vessels, you know, depending on where it's going.

You know, there's certain, there's certain, like, a lot of, like, laws, you know, that were, that have been built up over the years and you have to kind of navigate that when you're dealing with the government. One of the things in our, in the request for proposal for the Afghan contract was that they specifically said no Chinese ammunition may be supplied either directly or indirectly under this contract. And the reason they put that there was because there's an arms embargo against China. There has been one since 1989. Since the Tiananmen Square massacre, when a bunch of Chinese students protested, they wanted democracy. And the Chinese government famously killed a lot of them.

Like there's a very famous picture, I think, called Tankman, where there's like a line of tanks and there's a Chinese protest who's like standing in front of the line of tanks. That's part of the Tiananmen Square Massacre. And that was huge worldwide news back in 1989. And to punish the Chinese military for brutally suppressing the democratic movement, the United States put an arms embargo against the Chinese military. So it's illegal for U.S. citizens to either sell or buy military equipment from. the Chinese or from Chinese military companies, as they call them. Well, seems silly because what did it do? We buy everything else from China.

Right. Well, I guess the idea was that we're not directly supporting the organization that killed all these protesters, you know, like the Chinese army. Now, of course, when we're buying our iPhones from China, Foxconn is paying taxes to the Chinese government who's using those taxes to buy equipment for their military. So it's not a big thing. but I guess it was a way to punish the Chinese military for doing that. And this is something the United States does often.

You know, like as I mentioned earlier, they put the Russians on the blacklist for supplying the Iranians with nuclear technology. So, you know, U.S. citizens can't deal with the Russians, you know, for military goods. It's more like about sending a signal or something. Yes, exactly. That's exactly it. you know, that's, it's, it's like sanctions in general. You know, the United States uses its economic power to, to punish organizations and countries that they want to punish without actually coming to physical violence with them. You know, it's like it's using, it's more powerful.

Yes. Well, I mean, it depends. I mean, there's nothing more powerful than a bullet and a gun, but, but yeah, but it's a good way to exert influence. without having to resort to violence. It's economic warfare is what it is. We're seeing that in a big way with Russia now. And they're going way further with Russia now than they did with anyone, really, actually. The sanctions are much more intensive with the Russians. Funny side thing.

I just heard yesterday, somebody told me that I don't know if this is true, you probably know, but Russia is now selling their oil to China and we're buying it from China? I know they're selling it to China into India. I don't know that we are buying it from China. I haven't heard that. Okay. That's just what I heard. Yeah.

Yeah, because that doesn't sound right. Okay. It sounds like it's because that would be technically against the sanctions. You can't. Oh, what? Yeah, because you can't, I mean, I'm no lawyer, but my understanding is that you can't just use a middleman to get around the sanctions. You know, that's, you know, that defeats the purpose of the sanctions. Right.

So, yeah. I mean, we shouldn't be doing that. If that's happening, it could be happening. You know, wouldn't be. Nothing surprises me. But it shouldn't be happening. So, yeah. The embargo, the arms embargo on the Chinese ammunition,

it was more of a political statement more than anything, right? Because essentially everything you guys were doing, which I'm sure we'll talk about, with using that ammunition and supplying it, everything was going exactly how the government wanted it to go. It was working perfectly. Yeah. So the government needed this ammo, right? The government needed the ammo. The government needed the ammo. That was their goal, right? And now when they put out the bid, they wanted to get, no, they couldn't get the ammo from the Russians because they just put them on the blacklist for the Iranian issue, right?

The Chinese have been on the blacklist since 1989. So, you know, they wanted to get this ammo without violating their own sanctions, right? without violating their own economic warfare policies, so to speak. And so because of that, they specifically put no Chinese ammunition either directly or indirectly in our contract. Now, the weird thing was that they didn't say no Chinese ammunition that violates the embargo, right? You know, they just said none, period, right? Because there is Chinese ammunition that doesn't violate the embargo.

Just like if you had bought a Chinese. Chinese AK-47 or Chinese ammo in 1988 before it was illegal while it was still legal and you imported into the United States, right? In 1990, after the 1989 ban, you could still sell that weapon or ammo in the United States to a third party because you had bought it when it was legal. So it remained legal, right? Right. You know, once it's outside the Chinese possession, you know, that's, it doesn't benefit them economically, you know, by purchasing that, right? Now, but it didn't mention that, right? It just said no Chinese ammo, period.

So when we discovered, and I don't know if, you know, we're skipping ahead to this, but when we discovered that the ammo from Albania was Chinese originally, we saw the dates on the manufacturing. That was manufactured in the 70s. So it was way before, you know, the 89 ban. So it didn't actually violate the terms of the embargo. but because they had put no Chinese ammo period, it did violate the terms of our contract, if not the embargo.

So it was just that the army had written the contract badly is really what it was. They should have put no ammunition that violates any embargoes, right? But they didn't do that. They just said no Chinese ammo period. That would have helped you if that would have said that. Yeah, it would have helped us because then we wouldn't have had to work. worry about it. But when we discovered that it was Chinese ammo, we had to make a choice. You know, we had to decide, you know, we had two options, really. Well, we could say, you know, we could go to

the government to the U.S. Army and say, hey, you know, we just discovered that all this ammo that we were buying from Albania turns out to be originally from China. But hey, but, you know, it's, it wasn't from China in the 70s while it was still legal. So just want to clarify our contract, our contract says no Chinese ammo, but you didn't really refer to this, right? Can you please give us a waiver in writing to allow us to deliver this stuff? If we had done that, two things could have happened. They could have said, yeah, that makes sense, are bad. We didn't mean to write the contract that badly.

We did mean that it should only be for stuff that violates the embargo. So here's a waiver and go ahead. We really need the ammo. Or they could have said something along the lines of, well, yeah, that's true. We wrote the contract badly. but, you know, everyone, all your competitors had to bid on that contract with that limitation, right? So it's not fair to allow you to continue to deliver that contract when, you know, you bid ammo that your competitors technically couldn't because, you know, they couldn't bid that out. Because if, you know, we didn't know that it was Chinese ammo at the time we, at the time we bid it.

but but you know like if uh you know our competitors probably knew because anyone who actually knows the history of albanian knows that all their arms came from the chinese which is an interesting history uh yeah i don't i don't know if you want to take sidetrack into that but yeah no it's interesting it's all it's all stored in like caves and everything else because china yeah china manufactured everything like they moved everything to albanian to manufacture it there right yeah so it's it's a bit of a mix so the history of albania is interesting that they were run by some dictator and during the Cold War and who was like a real communist true believer and he felt that the Soviets were a bunch of corrupt pretenders and who

weren't true communists. And so he pulled out of the Soviet Union. Albany is a tiny little country near Greece and he thought because, you know, the Soviets didn't like people who pulled out of their union and they they would enforce that like they, you know, invaded the Czech Republic in the early 90s, I think it was, or late 80s. So Soviets have a history of brutally repressing people who rebelled against them, and Albania knew this. So he was worried the Soviets would invade him. And so he made, and he was also worried the West would invade him

because he was a communist true believer and, you know, the mortal enemy of the West. So he thought he would be invaded by both the Soviets and the West. And he's a tiny little country, you know. And so he made an alliance with Mao, with Mao's China and who he felt the Chinese were you know true believers as well so he felt okay with making an alliance with them and he got in the Chinese were happy to have an ally in Europe because it gives them a foothold you know into Europe and so they supplied him with massive amounts of

military hardware because he because he was so worried about being invaded by both the Soviet Union and the West he formulated a plan which he called total war where every man woman and child would become a soldier and fight to the death. That was his plan. And in order to support that, he built a huge network of bunkers all over Albania and filled it with weapons and ammunition that he largely got from the Chinese. Now, the Chinese supplied him with weapons and ammunition that they made. They also supplied him with manufacturing equipment, like entire factories that he set up in Albania to manufacture his own.

Which would look identical to the stuff that was manufactured in China. So, you know, there was one of the issues that was argued. during the court case was that you don't even know if this stuff was manufactured in China or manufactured in Albania because the Albanians had the manufacturing equipment that the Chinese gave them. So there's no way to distinguish where these bullets come from. So that was one argument, you know, in the court case. But when we discovered that it was, you know, that it was Chinese ammo, you know, we made the choice, or I should say, Ephra made the choice because he made all the final decisions, but that he didn't want to have the risk of losing a $300 million contract.

So rather than telling the U.S. Army what the situation was, you know, and taking a risk that they may cancel the contract, he decided to hire someone to repackage the ammunition, to take it out of the boxes that had all the Chinese markings on it and put it into. to like plastic bags to protect it from like corrosion and package that into like heavy corrugated cardboard boxes. And actually we were planning on doing this even before we discovered it was Chinese because at the time, which is interesting, because we, at the time in early 2007, there was a huge spike in oil prices. And that spike completely destroyed all our margins because we had to fly everything air freight and the various, the majority of the cost of air freight

is the fuel. So, and because the oil prices were spiking, we weren't going to make any money on this. And so we realized that these, all the ammo is packaged in these heavy wooden crates. And, you know, which is if we remove them from the wooden crates and from the metal tins that they were in, we would save a lot of weight. And therefore we'd be able to ship a lot more bullets per aircraft. save a lot of money on on transportation and so so in order to do that we sent my good friend Alex over to Albania we hired him for this job and he was and he found a cardboard box manufacturer and and hired this guy to do the repackaging job once he got to albania and the Albanians showed him the ammunition, that's when we discovered it was Chinese. So we only discovered

it was Chinese already after we had decided to repackage it. But once we discovered it was Chinese, we're like, okay, we need to repackage it anyway. But now we have to make sure that none of the documents, which have all the Chinese markings on them, which are included inside the metal tins with the bullets, that none of that makes it into the new packaging. So unfortunately for us, We were pretty dumb and we said all this by email. So we left a very easily traceable paper trail of all our intentions and when we decided everything. What does a hundred million rounds of AK-47 ammo look like? So we fit, if I recall correctly, this is a long time ago, about 15 years.

I think it's been now. Yeah, about 15 years. Wow. We were shipping about 2.7 million rounds per aircraft, IL76 aircraft. And each aircraft could hold 45 to 48 tons. So 45, so that's about two shipping containers per aircraft. Two shipping, the big metal boxes you see at the Miami. Yeah, at the port.

Yes, yes, exactly. So about two of those, two 40-foot shipping containers were into an air. aircraft. And, and each of those was like a little under three million. So that's, uh, so if do the math, it's like three million for two shipping containers and there was a hundred million. Yeah, my math skills are not that great right now, but it's, uh, let's see. This is two for three. It's a hundred million about it by three. So about 180, uh, yeah, about 180, uh, shipping containers were. That's wild.

That is totally fucking wild. And what are the logistics involved in transporting besides the planes? Yeah. There's a lot more that goes into transporting 100 million rounds, including hiring the people to repackage it. Right. So that was a big job because that's a lot of ammo. And how did that affect your guys's margins and your guys are, because you guys initially

didn't plan for that in the quote? Right. We didn't. But we were saving so much money on the air freight that it was, it was actually peanuts comparatively. Yeah. Like we were saving. I think we struck a deal to like pay something like, I think it was something like 100 grand or

200 grand to do the entire repackaging. Wow. 200 grand. That's insane. One or 200 grand. And we were saving, I think, three or four million dollars in air freight costs. So we were making way more money than it was costing to repackage. And so the.

And also the guy who you guys hired to do the in charge of doing the repackaging ended up being a huge part of the story. Right. So the guy who we hired to do the repackaging was the owner of a box manufacturing company, which is why we hired him. Because we were looking for large quantity of strong cardboard boxes to put the ammo in. And we figured, you know, he's already has a factory. So he has access to workers. So why not hire him to do the repackaging as well? His name was Costa Tribishka.

Trubisca, which is I think how they pronounce it in Albania. He, you know, he was happy to do the deal. You know, he did the repackaging. But then what happened was Ephraim, of course, could never make enough money, right? He was always trying to squeeze more profit out. No matter how much money he was making, he was always trying to get more. So he went over to, he kept on asking the Albanians to lower the price. He was screaming.

It was actually through Henry because Henry was who set that deal up for us. He kept on asking Henry, hey, you know, I need a better price. I need a better price. And Henry's like, look, I gave you the best price. You can't get a better price anywhere, you know. You already have a best price. And Ephraim's like, I got, I need a better price. Fuel is so high and blah, blah, blah, you know, everything he could think of.

And, you know, Henry just stood firm. He's like, I can't change the price. And so Ephraim, he flies over to Albania. he started talking to Costa. And Costa is like, you know, I have a friend in the military of defense of Albania. You know, I can get some information for you. And Ephraim's like, I want to know what Henry is, what they're getting paid for it. You know, like he wants to know what Henry's margin is, right?

So Costa finds out from his friend that the MOD is officially, the Ministry of Defense, is officially selling the ammo, the 762 by 39 ammo to Henry for two cents a round. And Henry was selling it to us for four cents around. So he was like had like like a 50% profit margin or 100% depending on which way you calculated. And and that pissed Ephraim off. Like you know, but you guys were selling it to the government for how much? 10.5 cents around. 10 and a half. Yeah. Yeah. But I mean, we had to pay for the shipping. So the shipping was a, if I recall correctly, about three or four cents around. So we were making actually about the same amount as as as Henry was.

Okay. Now, um, now the thing is that one thing that, you know, we had no idea, we're sure that Henry was probably paying off some politicians in order to do this deal, right?

Albanian politicians. Uh, because he was actually very close with, uh, the son of the prime minister, um, uh, Sally Berisha,

I think was the prime minister's name and I forgot his son's name. But the son ended up suing me and Ephraim. And Guy Lawson for defamation, by the way. Oh, really? It got tossed out of court. So, you know, so Mr. Berisha, don't sue me again. Yeah. Luckily for me, it got tossed out of court.

It was ridiculous. It was without merit, as the legal profession would say. But it was a big pain in the ass. And it made Simon and Schuster lose all the money that they had made off the book. Oh, really? Yeah, yeah, because they had to cover the legal expenses, which sucked for them. Good Lord. Yeah.

Yeah, even frivolous lawsuits can cost you a lot of money. Um, so anyway, uh, Henry had a close relationship with the son of the prime minister. Okay. And, you know, that's kind of how he got access to this, to this, to these, uh, to this, this, uh, this, uh, this, this, uh, this, uh, this, uh, this, uh, this, uh, this, uh, we assume, obviously we don't know, he was paying people off. I don't know how much of that he was paying off, but I don't think he was keeping the entire two cents around for himself. He definitely wasn't.

But as far as Ephraim was concerned, Henry was being, a total pig and he couldn't believe how Henry was ripping us off, you know, and it pissed him off to no end and he wanted to get to cut Henry out of the deal, you know? And so he was like, that's it. I'm going to cut Henry out of the deal. I'm going to go to the Albanians directly and they'll deal with me direct. And, you know, we're not, we're going to cut Henry out. And so Ephra meets with the Albanians with Pinari was the guy's name who was running the organization who that was the albanian export company panari was the head of the arms company of the of the export company was a government owned company that was in charge of selling any military equipment

that the albadian government wanted to sell okay so pinari was the head of that organization um and he meets with pinari and uh he has this meeting and this meeting is in the book and that's what Mr. Barisha sued us over was where he meets with Panari and the prime minister's son and one another character that I forgot his name but who was a well-known like mafia guy in Albania. Yes.

Is this the story where he walks into the building of cylinder construction and there's like this Wall Street decked out office in the middle of this building that's not even finished yet? Exactly, exactly. So, so Ephraim, you know, realizes the kind of people he's with. And suddenly he's like, you know, usually he's a big talker, you know, really loud and, you know, talking shit, you know, constantly. But Alex, who was there, you know, told me that the second he walked in, he knew he couldn't like fuck around. Really?

He just got real quiet, real fast. And he's, what, 21 at this point? Ephraim is 21 at this point. Okay. Yeah. Yeah. And, and they told him, look, we can't, we're not. going to give you a better price. You know, you can complain and scream and cry all you want,

but we're not going to do it. We know we have the best price, you know, in Europe, right? You're not going to get a better price. However, we know that you're also doing the repackaging of this ammo and that you hired this guy, this box guy, who's not part of our organization. He's just some random Albanian guy. And you're paying him a bunch of money to do this repackaging operation. So if you get rid of him and you give us the repackaging operation, pay us some money for that, you know, We'll give you a little discount on the ammo because we're making money on the repackaging operation. And Ephraim's like, deal. Screw that guy.

You guys are in, you know? And so he cut the box guy, Costa, out of the deal. And Costa got really mad about that because he ended up with like $20,000 worth of boxes that he couldn't have anything to do with. He asked to be paid for it. Ephraim just didn't take his calls, you know, refused to pay him with $20,000, you know, because he's just like that. and Costa got really mad. And, you know, because he knew what was going on. He knew why we were repackaging it because, you know, we had specifically told him

make sure that no Chinese documents get into the case. He knew what was going on. So he goes and he tells the New York Times what's going on. He also tells law enforcement. You know, I don't know if he told the FBI or it was customs that. ended up investigating us. I don't know who he contacted, but he contacted someone in law enforcement in the United States,

and they started an investigation because he contacted them. And then his biggest mistake was he contacted the Albanian press and told them that there was a whole bunch of corruption with this deal, that the Albanian politicians were getting paid off, you know, for this ammo deal. And I think the reason that was, you know, a mistake on his part is because he ended up dead after that, under mysterious circumstances. He, like a month or two after he did that, apparently he was driving by himself in his car on a

flat road in a field and suddenly he had some sort of accident where he was thrown like 30 feet from his car and they found him dead like 30 feet. This is Trebiska? Trebiska. Yeah. Yeah. And they, you know, they ruled it as an accident, but it was a very strange accident because there are no other cars there and it was a flat road and it was just like very, very strange.

And also when Ephraim first went to Albania, he asked you to Photoshop a bunch of fake quotes, right? Right, right, right, right. Yeah, for his preparation, for his negotiations with the Albanians, he goes to me, he's like, hey, listen, I got to convince these guys to give us better pricing. So why don't you take, you know, all the other suppliers quotes that they gave us and just change the pricing to make it look much lower so I could use it as leverage. and say, hey, look, I can go to these guys, you know? And so I did that because, you know, he asked me to do that. And, you know, not that hard.

You just change a few PDF numbers, you know. They called bullshit and still go. Immediately, like, Pinari looked at that. He's like, that's fake. He didn't even look at it. He's like, don't show me that shit. You know, he's like, I don't want to see your own papers. Oh, my God.

Yeah. So, okay, once you guys start repackaging the ammo, it all starts going smoothly at one point, right? Yeah. you guys start everything's going as planned like you guys are making these deliveries to from you guys so they're getting they're departing from albania yeah and then where they're going directly to uh afghanistan so most of the time they were going directly to afghanistan uh we did have uh the the story with the AK 40 not the 847 747 the cargo 747 plane had to stop in kistan to refuel and that's when it's got stuck there on the tarmac. And that's because Putin got, was trying to play games and didn't like the fact that they got blacklisted. Yeah, exactly.

He didn't like that they were getting blacklisted by the, because they had, you know, the Russians were supposed to be making all this money. Right. And they were supposed to be their deal. Right. And so they were trying to mess up the deal so that we,

you know, the U.S. Army would be forced to come back to them. So they did everything they could to, to stop us from delivering. So they leaned on all the central Asian countries to, to not give us overflight permits. So, for example, Uzbekistan didn't give us an overflight permit for like a month and like we needed to fly over Uzbekistan.

And then I had the idea, well, why don't we just hire the Uzbekistani national airline to do the transportation so that they're making some money on it. And then maybe they'll be willing to do it. And we did that. And the second we hired them, suddenly we got the overflight permit. So even though the Russians leaned on them, the Russians didn't have 100% power, you know, to enforce that. You know, they were, you know, as soon as the Uzbeks were making some money out of the deal, they were happy to, you know, tell the Russians to go fuck themselves. What was it like for you to have to get all these flyover permits for all these countries in between Albania and Afghanistan? Like what did it?

How far did you have to go? What did you? What was it like making these phone calls? It was a pain in the ass. But, I mean, some countries were easy, you know, like Greece. You know, we had to fly over there. you know, some countries were fine, but certain countries, especially the Central Asian countries, were a lot more difficult. And we'd have to, you know, at first, we, you know, like, at first we would

rely on the logistics company to do it, you know, the air freight company. That's generally their job. You know, they're supposed to arrange all these things. But whenever they run into problems, they come back to us and they're like, hey, you know, these guys aren't giving us an overfly permit. Is there anything you guys could do on your end? And so what we would do is we would call up the State Department in that country, you know, the consulate, the U.S. consulate, and speak to the military attache, right? That's a State Department officer whose job it is to interface with the U.S. military and the military of the country where they're stationed.

So, you know, we would speak to the military attache. We'd say, you know, we have a contract with the U.S. Army. we'd set up a copy of our contracts that they'd know we're real and you know like we're trying to you know get overflight permits over this country can you help us out and they would go speak to their contacts in the military and the government of the country they're in and try to work these things out and usually they would be able to do it um it would take them like a week or two or three uh but sometimes you know like in the case of Uzbekistan they just made zero progress and they're like i don't know why but they're just not returning my phone calls you know it's very

strange. They're usually not like this, you know, but something's going on, you know, and and that's kind of where we got stuck, um, for a little bit until we hired the Uzbekistanian airline. Wow. Um, what, what, like, so how much ammo, how much of this, of these 100 million AK-47 rounds did you guys end up delivering to Afghanistan? So we ended up delivering, um, and I remember the number because it was in the court case, you know, uh, 71 aircraft loads. 71 air yeah each with about a little under three million rounds each okay yeah so no it was more yeah because it was a hundred actually i think they put it up half right uh well 70 times seven times three is 21 so that's actually more than more yeah that's like uh that's uh that's a that's a little bit under 200

million rounds but it wasn't just it wasn't just the AK 47 rounds that we're delivering we're also delivering a 762 by 54 rounds which is machine guys rounds. We're delivering other types of ordinance as well, like mortar shells and and and grenades and stuff like that. So at any point did you guys actually, we talked about this in the beginning, but at any point did you guys entertain the idea of driving it there? Or was that just totally? I mean, in the movie you guys drive through the triangle of death. Right, right. Yeah. So we did think about using rail. Okay. But we were told that the security of that would not be good and that, you know,

it would be impossible to get it insured because, you know, you're driving through a bunch of, like, warlord territories. And if they find out that there's ammo on that train, they're going to stop the train and take the ammo because, you know, that's, you know, what warlords do. So, yeah, So they, you know, we looked into a few different options. We looked at like going by boat to Karachi and Pakistan and driving by truck to Kabul or going by rail through, you know, the Central Asian countries. But in the end, it was just too risky. And we realized that we had to fly it there. And because we had the idea to repackage the ammo and reduce the weight, it became profitable to fly it there, even though it wasn't before.

But, you know, so that kind of gave us, we would have made a lot more money if we were able to do a rail or boat because that would have drastically reduced the cost of transportation. But it was also much, much more likely that we would lose the shipment completely, in which case we would be really fucked. Right. So it wasn't worth the risk. So that's a completely fictionalized scene driving through the triangle of death. So to the scene where we drive through the triangle of death is actually not 100% fiction. It actually did happen, but not to us. So it happened to Stephen Chen, the screenwriter of the War Dog screenplay.

Before he was writing screenplays, he was a journalist, and he wanted to cover the war in Iraq in 2003. He couldn't find a flight into Iraq because they weren't doing commercial flights. So he got a flight into Jordan and then hired a driver to drive him to Baghdad from Jordan. And he got chased by insurgents and got saved by the army. The whole thing actually happened to him. But, you know, when he was writing the screenplay, Todd, Todd Phillips, director was like, man, we need more action in this movie. Why don't you put in your story where you were driving through the triangle of death, you know, into that. You know, the barretta deal was a real deal, you know, but it didn't happen like that.

We actually ended up not delivering the barretta deal. Oh, really? That was one of the few contracts that we defaulted on. Yeah. Yeah. Yeah. So at what point did you get an inkling or did you get an inkling? at one point. Did you get sort of a feel that Ephraim was going to fuck you over?

Once the deal was going smooth, right? And, you know, once the, once we were delivering, like, we were doing like three aircraft loads per week. Like every other day, there was an aircraft delivery and everything was going smooth. We got all the overflight permits, you know. The hard work was done. All the hard work was done. And, you know, so because all the hard work was done, I started showing up at the office less, you know, because I didn't have to be there for 16 hours a day, you know, talking to people, you know, and, you know, stressing out. And, you know, so I was taking like a break. And, you know, I was still managing the logistics and making sure everything was, you know, the planes were arriving on time. And people, you know, were getting paid and all that stuff. And, you know, the documents were getting

sent to the right people. But, you know, it wasn't like a 16 hour day anymore, you know. Right. And then he started complaining. He was like, hey, you know, you're not, you know, to the office anymore. I'm like, I mean, is there a reason I should be come to the office? He's like, yeah, I could really use your help on, you know, these other deals I'm working on. And I'm like, are you going to give me a cut of those other deals? He's like, you didn't set up those deals. I just need your help on him. I'm like, well, but I only get a cut on the things that I work on, you know? And he's like, yeah, but if if those deals fail, the whole company goes bankrupt, and then the Afghan deal fails, you know, so therefore you're responsible to make sure that

the whole company, I'm like, well, then give me a piece of the whole company. I'm like, well, then give me a piece of the whole company. Right. And he was like, okay, okay, okay. I'll tell you what. I'll give you 1% of the company.

And I'm like, I think I'll keep my 25% of the Afghan deal. Because that's like, you know, 90% of all the money coming into the company is the Afghan deal. Because you know that's what he was thinking in his head. Exactly. I get 1%.

I can cut him out of that 25%. That's exactly what. Yeah. That's why he said it. And so I was like, no, no thanks. I mean,

you know, if you want to give me 25% of the game, he starts he's like don't be ridiculous you know i'm never giving you 25% of the company you know don't be ridiculous and i'm like well then i'll just keep my you know 25% of the afghan deal and you know then he was like you know you know a lot of people uh the other guys in the at this point we had it started off just me and him but like at this by this point we had hired like maybe 12 or 15 people um you know so they're like you know the office was had a decent staff and he's like a lot of the guys around the office think that you don't deserve your commissions because, you know, you're not,

you know, you're not working as hard as they are and they're making way less than you. I'm like, yeah, but that's, you know, a different deal than what you did. You know, like, why are you even saying? Who's saying that anyway? I mean, I was like on great terms with everyone. I was like the good guy. He was always the guy screaming at everyone. Everyone, you know, was like, you know, was always stressed out around him, you know. So I was like, who's saying that that I don't deserve the money I'm making? He's like, it doesn't matter. It doesn't matter. You know, it's confidential. But, uh, but you know, a lot of guys are thinking that. And, you know, so I'm like, you mean, you're thinking that. So I'm like, what you don't like,

he's like, you don't think I, that I deserve to get paid what we agreed upon. He's like, he's like, yeah, you know, like, I don't think that you're, you're putting in the work that, you know, that, that you need to be putting in, you know, so therefore, I think that, you know, it's, you're not pulling your end of the bargain. I'm like, what are you talking about? We're delivering, right? Right. The contract's going well. I, you know, our deal isn't that I need a work X number of hours. I'm not a salaried employee. The deal is that, you know, I get the contract to go and then I get a commission off that contract, regardless of how many hours I put in. And he's like, listen, I'll tell you what. We'll make you a, you know, a official like officer of the company. You'll make 100K a year, you know,

and you get 1% stock. That's my final offer, you know. And I'm like, I don't want 100k a year. I'm about supposed to be making like millions of dollars from this contract. You know, I will take what we agreed upon. And he's like, he's like, well, take it or leave it. You know, and I'm like, I'll see you in court. And I walked out the door and I'm like, go fuck yourself. You know, like I'm not going to do that. So, so yeah, so I left.

And it was one of the most stressful times in my life because I'd been living off my savings until this point. Right. You know, because like all the money I was making in previous deals, he insisted I roll it into the next deal. So I couldn't pull that money out. To fund the Afghan deal. Yeah, to fund the Afghan deal. He's like, we need every penny we can get. Right.

Like, we need to, you know, have your money to, you know, I'm putting all my money in. You should put all your money in. It's only fair. You know, and, uh, and so that all my money was in his possession. What was your 25% cut going to be of the Afghan deal? So if we had completed the thing to the end. and delivered all 300 million. We were making an average of, okay, so we had bid it at 9%.

Right. But Ephraim had a real talent for renegotiation, right? As I experienced, right? But he renegotiated on everybody. So when we won the contract, he went back to all our suppliers and he's like, guys, I've got the contract. There's no competitors, just me. You want to do this deal?

You have to go through me. Now I'm going to need a better price. I know you gave me a price before and you said that was your best price, but I need you to dig real deep because I've got other people who are going to give me better prices and I can go with them. So, like, he would renegotiate everything like after the fact. And he'd never stop renegotiating, which is how the whole Albanian thing blew up in our faces. But because he was so good at that and he did a lot of it successfully, it didn't always blow up in his face. I'd say mostly he was successful at it. We ended up increasing our profit margin to

about 20%. Wow. Yeah. And so we would have made if we had delivered on a $300 million deal, we would have made profit about $60 million. $60 million profit total, which 25% of that is yours. Yeah. Yeah. Wow. Yeah.

Yeah. So yeah, I was looking forward to making that $15 million. And, you know, my plan was to as soon as that contract was done to quit because I couldn't stand working with him. He was just such a stressful person to be around. And I wasn't even interested in the business, to be honest. It was kind of cool to be involved in like geopolitics and, you know, and all that stuff. And like I felt like a hot shot, you know, dealing with all these countries and, you know,

arranging aircraft of ammo and all this stuff. But I was like, you know, I don't really want to do this for the rest of my life. You know, I want to do something more enjoyable. I've always been a musician. So I've wanted, you know, I was like with, you know, $15 million or whatever it is that we end up making, millions of dollars, I'll be able to, you know, fund a music career, you know, you know, fulfill my teenage dream of being a rock star, right? What teenage boy doesn't want to be a rock star? Right. Yeah. So, but right after you told Ephraim, you're going to see him in court. Basically, you walked away from him. You didn't

talk to him anymore. Yeah. You, you didn't, didn't you start your own company? I did. Okay. Yeah. Yeah. And you had made contacts because you went to a trade show in Paris, I believe it was. Yeah. That was one of the trade shows. So it was one of the big, just military industrial complex trade shows where there's just, what was, what was there? Was there like drones on display and shit? Yeah. So. So. So it's called Euro Satori. They still have it every year. I think you need to be in the industry to get an invitation. It's not like you can't just buy a ticket.

But if you have a company that is in that industry, you can get tickets to it. And yeah, and it's focused on military equipment. So you have the Lockheed Martins, Raytheons, Northrop Grummans of the world, BAE systems, all the companies from all over the world, not just America. them go and they display their latest hardware. And you have everything from like small arms like pistols and bulletproof vests and and, you know, boots and camo gear all the way up to like tanks and like helicopters and drones.

And they had like this like live fire demo area where it was like a, it was like a, like a stadium where they had like bleachers and like a big field. Not a stadium. It was more like bleachers next to a big field because it wasn't surrounding. by people and they had like like tank like tanks like jumping dunes and like air like uh like attack helicopters shooting targets it was super cool it was super cool yeah yeah that's wild yeah they had like military robots that were designed to climb walls and it was really really neat and you were there as a young kid yeah trying to look yeah trying to look snazy trying to look like a big shot

rubbing shoulders with some yeah yeah yeah got my best suit on warlords yeah yeah exactly we pretty much modeled our look on Nicholas Gage. That's fucking incredible. We're like, we got to get a suit like his. We got to get glasses like his, a metal briefcase because that looks cool. Yeah. And so we're like, we got to get them to take us seriously. So that was like, that was what we did.

So you were able to utilize some of the contacts you made there for your new company. And so what you started to do? You started just going on the website trying to find contracts to bid? Exactly. So I figured, hey, you know, I've just been doing this work for like a year and a half at that point, something like that. And, you know, we won some big contracts. So I knew how the business worked. So I registered my new company with the government and I started looking for contracts. But before that, I took like a month and a half off because I was just so burnt out. Like I'd

been working like crazy. And then and then I realized that I was going to make no money and that like super stressed me out because I realized, you know, I better make some money soon, you know, because I'm going to run out. And so, yeah, I was like super, super stressed out. But eventually got the new company up and running. And I bid on, I think it was like a $3 million contract. I forgot what it was like for anti-aircraft ammo. And I was informed by the government that they wanted to do the, like some of the audits,

which was the final pre-award phase, you know, that similar to what we had gotten much less intense than what we did for the Afghan contract, but they were, but like they gave indication that they were about to award this contract to me. And I was going to make like a million dollars on this contract, just this one contract because I had a great profit margins, you know, like found a really good supplier through one of my contacts. And like the day before they were going to award the contract, literally the day before the New York Times article broke. And the front page of the New York Times had my mugshot on it as well as Ephraim's mugshot next to a picture of rusty looking ammunition and they said that we were delivering like low quality ammo and it was like

became a big scandal um because the where where they got that picture was we had delivered like i think Ephraim had bought had bid on uh like 30 000 rounds of bulgarian ammo it wasn't even the the Chinese stuff from albania it was Bulgarian ammo and he had bid on it sighted unseen. It was dirt cheap. And like, you know, it wasn't a large enough quantity to go fly over there to inspect it. So his thinking was, you know, it's so cheap, we'll roll the dice. If they accept the ammo, we'll make a lot of money. If they don't accept the ammo, it's not such a big, you know, uh, loss, right? Turns out, not surprisingly, the ammo was total shit, you know, and it was rusty. And when it got delivered to Kabul, it was rejected. Uh, you know, they took one

look at it, they're like, we're not giving this to soldiers, you know. So they, in Kabul, they didn't have like ammo, you know, disposal services, right? So what they did is they just stuck those few pallets of bad ammo, like the side of the runway and it just sat there for like months, you know, while they tried to figure out what to do with it. The New York Times after the, after Costa informed them about this whole story and they started investigating, they flew over to Kabul and they started talking to some of the military officers they're about our company and they're like oh is anything from can i see any of the stuff that they

delivered they're like oh yeah that stuff over there at the end of that that that was some crap they delivered right there and so the new york times uh reporter went in photographed that and uh and you know they made it appear like that was like all the stuff we were delivering you know so so the so the um the uh the uh the front page uh story was that these two young stories uh stoners because they got in the whole stoner they got in our mug shots actually from another incident where effram had picked a fight with the valet on his 21st birthday oh yeah and this is a story where you got you guys you guys ended up calling the cops on the valet guy and then you guys and we got arrested exactly and they didn't find a little baggy of coke in your sock they didn't yeah so yeah

they were so i'll digress and go into it's a funny story so yeah so so what happened it was effem's 21st birthday. This is a few weeks before we won the Afghan contract. We won it. His birthday is in December 15, 16th, I forgot. But like, but this, like we wanted the contract in January, early January. So it was his 21st birthday and he's like, we're going out and we're partying. Let's do this. And so we go and he was living in one of these fancy buildings where they have, where they require you to valet your car. Right. Like even if you live there, you can't, park your own car. But he had, I don't know what happened, but he had bad blood with the valet guy. He was this like little skinny Cuban guy. Right. And, and so he, like, we got to the valet and

the valley guy wasn't there. And so he's like, oh, he's not even here. Fuck this guy. Let me just see if I can get my keys from the valet, you know, closet. He opens up, the closet was unlocked. He opens up. He's like, oh, here's my keys. Let's just, let's just go get my car. Right as he's getting his keys, the valet guy comes like around a corner. and sees him rummaging in his closet, you know, and the guy gets, you can't go in there, you know, that's, you can't do that, you know, and he gets really mad and he like starts running at Ephraim and Ephraim's like, whoa, whoa, I just want my keys. And, you know, like kind of like getting back in his face, you know, and the Cuban guy just clocks him

right across the face, just like that. He threw the first punch. I saw it. And clocks him right across the face as and then effem starts you know fighting him back you know punching him back there's a security guy the condo security guy runs over and both him and and me and the security guy run at them and we both pull i pull ephraim and he pulls the other guy you know to separate them effram's shirt is all like ripped and like you know and and frum's like screaming you motherfucker i'm gonna get you deported you piece of shit you know uh and i'm calling the cops and and ephraim's like oh my shirt is ruined let's go up and you know I need to change my shirt and I'm going to call the cops on this fucker you know and so we go up to his place and uh he gets changed and and like we look out his balcony

we see that a few cop cars he calls the cops and we see like cops were right there they were very close by it Miami beach is pretty small and so the cop cars like three four cop cars like pull into the driveway of his building and um and out where like going down and the elevator and he goes to me. He's like, hey, you know, I've got some coke on me. You know, if they're going to arrest anyone, it's going to be me. You weren't even involved in the fight. So, you know, so why don't you hang on to the bag of Coke? And I'm like, okay, fine. That makes sense, right? You know, and so I'm like, you know, we're about to talk to a bunch of cops. So I'm like, you know, just to be on the safe side, I'll put it in my sock, you know?

So I put like a little bag of coke, you know, a plastic bag in my sock. And, and we go to, you We go, you know, go down to the cops and Ephraim's like, that, that fucker, he attacked me. You know, you should arrest him. And the cops are like, okay, we need to speak to you separately. And they separate us. And they, you know, the cop asks me, what happened? I told them what happened. And then they go and speak to the security guard and so the ballet guy.

And then they come back and the cop tells me, okay, turn around, put your hands behind your back. You're under arrest. Like, what? What do I have to do? You know, why are you arresting me? And the cop is like, oh, because the security guard said that, you know, You were holding the valet guy down while your friend was beating him. And I'm like, that's not true.

There's security cameras all over. Why don't you go look at the footage? You'll see that's not true. That he had this valet guy attacked him first. And I was just pulling them apart along with the security guard. So like, where are you saying that? You know, and why don't you just check the footage and you'll see that's not true. And they're like, yeah, we don't need to check the footage.

We have a witness. So like, so you're under arrest, you know, get in the car. you know here slap the handcuffs on and I was like oh fuck I'm so fucked I've got a bag of coke in my sock what am I going to do about this get into the back of the security of the cop car and um back of the cop car you know it's like a plastic bench with no cushions you know the the floor there's no like rug under the floor it's all like just rubber you know they've designed these things on purpose and I'm like fuck should I take it out and should I just try to sneak it into a corner you know what if they look inside the car afterwards you know what's

It's the best, you know, thing. I decide, I get taken to the, it was actually a female cop who, you know, was driving the car. And get taken to the Miami Beach, you know, the police headquarters. And she pulls into, into this, like, underground parking garage. It's just me and her. And I'm, like, thinking, should I take out the Coke and put it? And she's like, okay, step out of the car. I step out of the car.

and she gives a very thorough search of the backseat, you know, like while I'm standing there in handcuffs. And I'm like, okay, that was a good thing. Yeah, that's a good thing I didn't put it in the back of it. That was the right move there. And then she's like, okay, face of the wall. And she gives me a very thorough search, a very thorough search, kind of like a very aggressive, you know, like where she like squeezed my butt, you know. I felt like she was like. Cabity search?

It wasn't a cavity search. thank God. But it was a close as it could get. Like I honestly think and whatever. I'm not like, you know, I don't, it didn't really bother me that much at the time. But like, but like now that I think about it, I was like, that was a very suspicious type of search that she gave me, you know. Um, you know, not that I'm going to sue the Miami PD for sexual harassment or whatever, but, you know, but, uh, she definitely seemed to be enjoying herself. Was a compliment? Yeah, exactly. Oh, whatever. you know and so then I go into the into the

into the police station and the the police officer is like okay you know I want you to take your socks and shoes off and put them on the table and I'm like thinking I'm fucked I'm fucked I'm fucked right you know they're going to find the coke for sure and so I'm like should I try to

you know my then I'm thinking should I try to put the back Should I take my sock off and try to have the bag under my foot? You know, or should I leave it in the sock? And decide to leave it in the sock. First thing he does, he asks me to see the bottoms of my feet. So I'm like, okay, that was another good move. You know, getting lucky here. And then he takes, he's like, remove the socks from your shoes.

I put the socks on the side. And he looks at my shoes. I like, you know, like just dress shoes on because we were going to go to a club. and I have flat feet so I have orthotic devices in my shoes you know these like little arch things that you insert and he he had no idea what they were and he's like what are these things you know he's like is this a weapon and I'm like no those those are orthotic device he's like orthotic what what's a orthotic I'm like it's for flat feet you know it's a medical thing he's like are you sure about that I'm like yeah yeah and it's like there's no like secret compartments in here or anything like that and he's like

Like he's like banging it. He's like looking at, you know, like trying to see if there's like a secret thing. He like looks through like the spaces in my shoelaces to see if there's anything hidden in the, you know, like there. He tries to like to undo the sole of the shoe to see if there's anything in there. And he was just so focused on the shoes and the, I guess he got distracted by orthotic devices. He's like, okay, put your socks and shoes on. He didn't even look at the socks. Wow.

So got really lucky. As soon as I was in the holding cell, flush the bag down the toilet, you know. So it ended up being a misdemeanor charge of aggravated assault, which they ended up dropping because as soon as we got the security footage from the condo, we were able to show that this was completely, you know, ridiculous. And, you know, the New York Times got their mugshots. Yes, exactly. So that, long story short, that's where they got the mug shots.

We were, we were, neither of us looked particularly good because it was like four in the morning when they took those mug shots. They, like, hold you in a holding cell, and then they need to transfer you to the county jail. And, you know, they take their sweet time. They actually put you in a prisoner transport van, which is like a cargo van with, like, a metal wall down the length of it and a bench on either side. Right.

So it's super cramped. Like, you could barely, like, squeeze in. Yeah, I've been in a lot. So, you know. And, you know, they stick you in. And most of the people they arrest are like, you know, homeless, you know, or drunkard people. And they stink really, really bad. I mean, people haven't, like, showered and who knows how long.

And they lock you into this transport van. And then they go chill. You know, they're smoking cigarettes. You can hear them, like, talking, you know, watching a game and sat there for, like, well, I'm, like, suffocating on, like, fumes, you know, for, like, I think it was, like, two and a half hours before they decided to, you know, go drive us to the county jail. So get driven to the county jail and then they make you wait a whole bunch of more time and then they fingerprint you and take your mugshots. But at this point, it's like five in the morning.

I'm like tired as fucking pissed as fuck because it's like all, you know, it's like all, you know, bullshit. And so, yes, I did. I look pretty bad in the mugshot is what this story is supposed to illustrate. So yeah, so we looked pretty bad. And of course, the implication was that all the ammo we were delivering was this rusty low quality ammo. Which was not true. Which was not true. It was just this one.

No, I'm not saying that, you know, we, you know, that no responsibility. Oh, you know, we should have delivered this rusty ammo. We should have never delivered that rusty ammo, you know. Well, the rusty ammo ended up being, what, less than 1% of all the ammo you deliver? It was, yeah, it was. Oh, no, it was 0.001%. Exactly. It was crazy.

Yeah, it's 30,000 rounds out of, I think it was something like 150 million total or 200 million total of all the different types of ammo. So, yeah, it was a very, very small amount. What was the term they used in the contract at the ammo? It had to be operationally without, what was the term? Man, it's been so long. Servicable without qualification. Right. It had to be serviceable without qualification, meaning they basically, they didn't care

if it was super high quality ammo as long as it went bang. Right. They just wanted it to work. That's all they care. Now, which is interesting because they have a different set of standards for the U.S. forces. You know, the U.S. Army has very strict shelf life limits. Like, even if the ammo is properly stored, if ammo is properly stored, it actually could technically last forever, more or less. You know, like there is ammo from World War II that works perfectly fine because it was vacuum-packed and not, you know, subject to extreme temperature changes. Yeah. It doesn't really, by and large, go bad. But the U.S. Army is super paranoid and super rich. So they have very strict, like, Like I think there's a, I don't know the exact numbers, but it's something like a 20 year max shelf life for ammo that's given to troops.

But they didn't care that. You know, they didn't have the same standards for the Afghan and Iraqi allies. You know, all they cared was for that purpose was that it was serviceable without qualification in their terms, meaning that it worked, that they would test it. And it worked. It didn't, you know, misfire or anything like that. And it didn't have like a corrosion on it. or any visible signs of where, which, you know, the 30,000 rounds did. You know, they were corroded.

And so the guy from the DCIS based in Tampa started investigating you guys. Right. Or started investigating Ephraim. Right. And so, and he got in touch with the guy who was originally charged with boxing the ammo. Yeah. Started talking to him. Yeah.

And then, so this guy from the DC. who was investigating Deverelli. What was his, like, how did he get tipped off to this whole thing? And what was his ambitions of what he was, it seems like he was almost as driven to take down Devoroli as Devereoli was driven to do this deal. Right, right. So I believe, and my memory is a little bit, you know, I don't remember exactly. how it came because there was different a little bit of conflicting information

but I believe that that that Metavelis which is the guy Metavelis Michael Mantablus He was a customs officer He worked for oh no no DCIS defense crimes investigative service Yeah he's like the like the Pentagon's internal FBI

And then he worked alongside customs with other with customs officer Oh okay So he was the lead investigator I believe he originally got tipped off about DeVaroli in general. I'm not sure which one came first, but there were two things. There was one, there was one competitor who was really pissed off that DeVorelli kept on winning these contracts. And this guy, I forgot his name, but he insisted that there was no way DeVaroli could be legally winning these contracts. He must be doing something shady.

And so he started, he filed all these complaints with the, with the Justice Department saying DeVaroli is like, you know, repackaging stuff or, you know, which he was, but he didn't actually know that. He was talking about different deals earlier than the Afghan contract. And I think he was talking about like some weapons that DeVaroli was supplying, which he was doing completely legally, but this guy claimed he wasn't. So that kind of got DeVaroli on their radar. There was another incident where DeVaroli allowed the State Department

broker's license to expire because he didn't want to pay like a $2,000 renewal fee. And because he technically didn't need it to do business with the Pentagon, you don't actually need a broker's license to do business with the Pentagon itself. You do need if you're going to broker third parties like with other countries or private entities, you need a license from the state department in order to broker military equipment. Okay. So De Verli had this license, but you have to renew it every year and it cost two grand. DeVirley didn't want to spend the money.

Wow. So he let it lapse. And then because he let it lapse, there was some deal that came up, which Metablus, I think, thought he needed this license for, but he didn't have it. And so that, like, I'm not sure which came first. you know, the competitor, you know, kind of ratting on Deverelli or this license issue. But the combination of those things really bumped him up the visibility thing. And then the box guy came and told, you know, them about that.

Right. And that really got the investigation into high gear. And it seemed like there was a political war going on between the investigator and the army. Yeah. Because he kept going to the army trying to get them to stop your contract. or freeze your contract. They're like, no, like, this is going fine. The ammunition works perfectly.

Yeah. Yeah. So once Metablus discovered that, you know, the ammunition was possibly Chinese from China, he sent a email, and this came out in court, that's how we know about it. He sent an email to the army saying, hey, this could possibly be illegal. We need you to stop taking delivery. And the army was like, you know, we really need to. this ammo. And so if you want us to stop taking delivery, we need a letter from the Attorney

General of the United States, head of the Justice Department, requesting for us to stop taking it. Otherwise, we're going to continue. And that letter never arrived. So I don't know if Mentavos tried to get that letter and was denied or he didn't try. I don't know exactly what happened. But the Army didn't get that letter. So they kept on taking delivery on it. And they kept on taking delivery on it all the way until the point where the New York Times published their front page article. So they were informed back in August, I think, about the Chinese origin of the ammo, and they didn't stop taking delivery until March of the next year. So, like, more than half a year, they continued taking the delivery of the ammo, even though they were informed by, you know,

the Justice Department that it was, you know, possibly Chinese origin. But they didn't care. They said the, I think the term they used was the, the mission, you know, the needs of the mission Trump, you know, your, you know, your request unless there's a letter from the attorney general. Right, right, right. Yeah, because it was, it was working perfectly. I think there was even generals or something on the ground in Afghanistan that were, that were testifying that this is, this ammo works perfectly.

We've tested a lot of it. They never had any issues with it. Yeah. Yeah, they, and they had a big shortage of ammo as well. So Afghanistan has a fighting season. They can only fight in like the summertime because there's very high mountains in Afghanistan. And in the winter, the weather is so bad that nobody can really fight. You can't like really, you know, trek anywhere, you know, to conduct military operations.

So the fighting season in Afghanistan was coming and they were out of ammo and they really needed the ammo in order to supply, you know, the Afghan. National Army to fight the Taliban. And so when we started supplying the ammo, they were thrilled. And they were like, we need more of it. We need more of it. Keep it coming. Keep it coming. And so, you know, when Mantavis comes and tries to put a stop to it, the army pushed back hard against that. They did not want to stop the supply, you know, because it was critical for what they were doing. So what ended up happening with Mentavos? How far did he get? What, how were you going to be implicated in all of this? Right.

How did they try to wrap you up into this whole thing? Right. So, um, I left AEY, uh, you know, I walked out the door in July of early July of 2007. And, um, the, uh, customs and DCIS, um, and Tavilus and his other. their agents, raided AEY's office in August, August 23rd, remember the day. I was, you know, scarred, emotionally scarred. So that's how I remember that day. But I got a call. I had already been gone for like almost two months at that point, you know, barely recovering from my ordeal, you know, dealing with Ephraim. And, and I get a call because I was on great terms with

everyone else in the company, you know. So I get a call from one of the secretaries and, you know, like on the morning of August 23rd and she's like, hey, I just wanted to let you know that the federal government just raided the office. You know, there's agents everywhere and they told everyone to step away from their computers and they're taking everyone's computers and they're boxing up all the filing cabinets and they're taking everything. So it just heads up and I'm like, oh, fuck, you know, we're fucked. We are so fucked. And, you know, I immediately called. And, you know, I immediately called Alex, who was my best friend, that we had sent over to Albania. In the movie, they have me go to Albania.

That's not, I didn't go to Albania. We actually sent Alex, who was a good friend of mine over to Albania to oversee the repackaging operation. But in the movie, they decided it was simpler to just combine our characters. They didn't want to introduce another character, which was fine by Alex. Alex does not like the limelight. So he was thrilled not to be in the movie. But so anyway, I called up Alex because, you know, he's my best friend.

And I'm like, hey, you know, this, what happened? They just raided the office. And he's like, oh, shit, you know, let me call up, you know, let's find, let me find out what's going on with Diveroli. He calls up Diveroli. And a guy named Danny answers the phone who, he had replaced me, you know, he replaced my role in the company once I left. He also got screwed by Diveroli, as everyone does, you know. but so Danny answers the phone and and Alex says hey is everything okay there I you know like I need you know these documents you know there's new airplanes coming you know you know aircraft

coming we need a load more aircraft loads I need these these documents in order to for the aircraft to go and Danny Alex told me the story and Alex told me that he he hears Danny saying you know like covering the phone and telling it from, hey, Alex is on the phone. What should I tell him? And he hears Ephraim tell Danny, don't tell him anything. Don't tell him anything. Just tell him there was a bomb threat. And you can't get them those documents now.

Just, yeah, yeah. We have to evacuate the office because there's a bomb threat. And so Danny gets back on the place like, hey, I'll get you those documents soon. But, you know, we can't right now because there's like a bomb threat. And Alex is like, whoa, why are they lying to me? Are they like planning on blaming me for everything? Like they're going to claim they had no idea about the Chinese stuff and it was all me, you know, like doing the repackaging. Am I going to be the fall guy?

And he's like, fuck these guys. I'm out of here. You know, they're lying to me. I can't trust him anymore. And, uh, and so he leaves. You know, he flies. He's on the next plane back to the United States. And, um, and, uh, you know, Alex and I both, you know, hire a defense attorney, you know, who specializes.

in federal criminal cases. And the first thing our lawyers told us to do is go through your emails and search for all the keywords of all the things that you did, right, and see what written evidence there is. And so we did. And there was a lot of it. You know, we were very careless with emails. And, you know, the reason, I think the reason we were so careless is because we were working all hours the day and night in different time zones.

and it's very hard to get people on the phone sometimes, you know? So if you have to like get them on the phone, you have to like wait till the next day for them to like be at the proper time. And we're like, you know, fuck it, just send an email. We can repackage all the ammo. Make sure there's no Chinese, you know, documents in there, you know, it's all an email. You know, we're like, okay, this is all documented. We are totally fucked. There's no denying what we did.

And so our attorneys told us, you know, look, they've got lots of, of evidence here, you know. So probably your best, uh, uh, course of action is to just plead guilty and cooperate, you know, otherwise you, because, you know, what, what are you looking at, right? You know, the, uh, you know, we're like, what's, what's the potential here, you know, um, and they're like, there's a whole bunch of different ways they can structure it, right? They can structure it. Because the, the prosecutor has a lot of power of like what crimes they charge you with. So what they told us, eventually. At first, they actually told us, oh, if you cooperate with us, we're not going to charge you at all. You know, we don't even care about you guys. You guys are just incidental. We're really just going for DiBiroli. He's making all the money. You guys didn't really make any money. So, you know, we don't, you know, you're not the kingpin here. You know, he's the guy who's making all the money and making all the decisions as well. So, you know, it's really we just care about him. So just cooperate with us and we won't charge you with any crimes. You'll just be a witness. And we're like, great, you know, because fuck that, you know. And so, uh, so, uh,

So we tell them what we know. And then nothing happens for like six months. You know, like during the time, Metathlis is trying to get the Army to stop accepting deliveries. The Army refuses. Nothing happens where like, oh, maybe. And our lawyers tell us, well, you know, depending on the political situation, they may not, they may let this go, you know,

because if the Army wants to keep on taking delivery, even if they know something's going on, they may, it seems like they're not actually going to pursue it. They may let it go. Maybe there's no case at all. And then the New York Times publishes their front page article and suddenly everything changes. You know, suddenly the army says, whoa, we had no idea this was going on. You know, we're going to cancel this contract and, you know, rebid it, you know, for, you know, to someone else. And and then the Justice Department who had told us, you know, pretty much we hadn't like barely heard from, you know, the last six months. They're like,

hey guys, you know, we're very sorry, but, you know, we just, we feel like we can't charge DeVaroli unless we charge you guys as well because you were so involved in the, in the whole thing. But don't worry, you know, because you guys have been cooperating, you're going to plead guilty, we're going to, you know, recommend to the judge that you get the minimum sentence. And we're like, you told us you wouldn't charge us at all. You know, now we're going to be a, you know, a convicted felon. Right. You know, even if we don't go to prison, that kind of fucks you up.

up. So we're like, oh, well, we're very sorry, you know, like we can't, we, we have to do it this way. We're like, okay, well, you know, what can you do? So we both pled guilty, you know, and DeVaroli tried to fight them for like, like a year and a half. He hired like the best lawyers in Miami. He spent millions of dollars on his attorneys. I spent my entire life savings, which was not that much at the time because he screwed me out of all the money on, on my lawyer and I pled guilty, you know, it costs me like $30,000 to plead guilty. Wow. You know, uh, yeah. And, and, and you know, yeah, sure, you could have a public defender as the private defense attorneys like to call them a public pretender, right? And the public defenders have like,

they're working on like 200 cases. They'll barely remember your name, let alone like details of your case. But the prosecutors are only working like five or 10 cases. So, you know, the prosecution in this country is way better funded than the defense. You know, so it's not really an even system unless you have a lot of money and you could afford a few hundred thousand dollars if you're going to go to trial. That's what it's going to cost you to go to trial. Or if you even plead guilty, it's like 30 gay, you know, depending on, you know, how complicated your cases.

So that was like all the money I had left. So I was like completely broke. And Alex had to borrow money from his parents. It was stressed him out and his parents out. a really terrible situation for him. But, you know, we pled guilty. DeVaroli tried to fight it for like a year and a half, but eventually he realized he was going to lose, and he ended up pleading guilty as well after spending like $2 million

trying to get rid of the case. But he ended up pleading guilty as well. And now, then they also charged Ralph, Ralph Merrill, you know, the investor in AEY, in the movie he's a Jew who owns a bunch of laundry places, you know, laundromats. But in real life, he was like a Mormon guy who owned a machine gun factory. So they charged him with the same thing they charged us, fraud, they called it. And, oh, and just to give you an example of like how they work. So they told us when they were like, hey, we have to charge you, you know, with, you know, like

with crimes in order to. move this case forward. It also, this is, you know, what if you guys fight us, what we're going to do, if you decide to take this to court, we're going to treat each aircraft load that you delivered to Afghanistan as a separate crime because each aircraft load had a document that you signed. It was actually DeVaroli who signed it, but I was the one who took that document and gave it to the government. So I was culpable because, you know, I was involved.

and um and um each aircraft load had a document called a certificate of conformance and that document said you know what type of ammo was on the plane the quantity of the ammo the year of the manufacturer and the place of origin that's what and it was a form that they gave us that we had to fill out and in the place of origin we put albania right but and they said but you knew it was really china and you repackage the ammo to hide the fact that it was China. So that is an act of fraud against the United States. And you did this 71 times. So 71 aircraft. Right. So each of these, each of these, so that's 71 counts of fraud. And each count of fraud can get you up to five years in prison. So you can have, get maximum 355 years in prison if you fight us. Now, and

Of course, it'll cost you a few hundred grand just to get a decent lawyer to even have a chance of, you know, winning. But if you plead guilty, then we're going to combine those 71 counts into one. They have, the prosecutors have that power to do that. They could decide what to charge you with. And, you know, so therefore you have a maximum sentence of up to five years. And because you pled guilty and you cooperated, we're going to tell the judge that you, you know, you are repentant and you're going to be a good sentence. citizen from now on and you were very helpful in this investigation and therefore, you know, to give you the minimum on the low end of the scale. And who knows, maybe the judge will give

you just probation, right? So just probation or 355 years in prison. Right. Make your choice, right? And so it wasn't really a choice. And that's why the federal government wins more than 98% of its case is because the vast majority never even go to trial because of the choices they give people because that they have this type of charging power. So we both pled guilty, of course. We didn't really have much of a choice. And Ephraim pled guilty as well. But one of the things that they make you sign a plea agreement

where you admit all the things that you've done and then the government makes a promise that they will tell the judge that you were cooperative and repentant and therefore to please give you a low sentence. But part of that agreement is is that you can't commit any more crimes in this period before you get sentenced, right? Because how are the agents going to tell the judge that you're going to be a good citizen from now on if you commit another crime, right?

So if you commit another crime, you invalidate your plea agreement and then they could say whatever they want to the judge. So Alex and I, we were scared shitless, of course, you know, and we, like, I went back to school. I started studying mechanical engineering. I went back to being a massage therapist. You know, I was like, I'm like out of this fucking business. I, you know, I'm going to be super care.

I don't want, like my kid was a baby at the time. My daughter had just been born. She was like one year old at the time. And I was like, I'm not going to miss my kid growing up, you know, and spending, you know, her, you know, her childhood. And maybe her, you know, her full childhood in prison. So, so, yes, I went back to school. I started working for a nonprofit for that, that ran a food kitchen. I was trying to make myself it look as good as possible.

And, of course, I mean, like, I was, I was terrified. I mean, you know, it's like, you know, it kind of wakes you up when you, were you allowed to go back into arms dealing? So they told us to stay out of the business. It wasn't, they said, you know, just to keep everything clean, don't do any of this business anymore. Okay. And in fact, so I was, I was already, you know, because I had started my new company, as soon as the New York Times article got published, you know, I told you, I was like one day away from winning this multimillion dollar contract. The U.S. Army said, oh, we, you know, we just saw the articles, you know, we can't, we can't

give you this contract anymore. The bank also said that, you know, we can't finance you anymore because of, you know, the reputational risk, as they call it. And so Devereaux, so while we, so the reason it took three years from when they decided to charge us until we were finally sentenced was because Ralph, Merrill, he decided to fight it. He decided he's like, you know what, I'm going to take this to court. And so then there was a whole preparation for his trial.

And they didn't want to sentence any of us until his trial was over because they wanted us to use us, all three of us, Alex, me and DeViroli, you know, as witnesses in Ralph's trial. You know, as we were required to do because we had agreed to cooperate. So we were required to be witnesses if called upon. So, so his, he had a trial. It went into, like one juror refused to convict him. So it went into a mistrial. Then they did the whole trial again.

There was a second trial. And then he finally got convicted. And Ralph got sentenced to four years in prison. He spent like all his money defending himself. He felt really bad. And he got in Deverelli ended up stealing a million and a half dollars from him that he had invested. he just never paid him back.

So DeVaroli stole like a million and a half dollars, according to Ralph. This is what Ralph told me. And as well as spending millions of dollars on his defense and he ended up losing and he going to four years in prison. So during this three-year period, DeVaroli, of course, couldn't keep out of the business. You know, he just, you know, they told him not to, but he just couldn't keep away from it. So he kept on doing, you know, arms business. but through intermediaries.

But he's such like a control freak that whenever there would be like a deal that looked like it was about to happen, he would insist on cutting his own intermediary out of the, you know, communications and getting on the phone himself, you know, so he could negotiate because he was very good negotiator. So he wanted to negotiate himself. So at one point, he contacts, he was trying to do this deal to sell. I think it was magazines to gun magazines. you know right um to uh some firearms dealer i think in the orlando area uh central florida area and

the the guy who he was trying to do this deal with googles him right and all the the new york times article comes up you know the new york times article was reprinted by like every major newspaper in the world you know i got into the associated press uh you know network and so like i saw my name popping up and and like i have like you know like a google um alert you know for like my name and I saw my name popping up in like all these like every major city in the world pretty much because like all their local papers all reprinted it. So he Googles him and he finds, you know, this entire story and he thinks, man, you know, this guy is in a lot of legal trouble and he's trying to get me to do an arm's deal. He's probably trying to incriminate me to entrap me in order to get time off his own

sentence, right? So he's like, I'm not going to get fuck like that. So he calls up the ATF. And he tells them what, you know, that Deverelli is trying to do this deal with him. And the ATF agents are like, oh, that's very interesting. Why don't you keep on talking to him? In fact, why don't you introduce one of our agents as your partner? And so he introduces one of the undercover ATF agents as his partner to DeVoli. The ATF agent gets in the phone.

He's like, yeah, yeah, we could do this deal. But I need you to come up and I need to meet you in person in order to do this. So why don't you come up to Orlando? and we could close this deal. Now, he wasn't allowed to leave South Florida. That was part of the, the flee agreement. You know, you're not allowed to leave, you know, that area. And so, but he was like, fuck it.

I'm going to do it anyway. He drives up to Orlando, meets with the undercover ATF agents. And the ATF agent has, he's like, hey, you know, I just bought this new HK handgun, check it out. And Debraldi is a gun nut, right? And he's like, oh, I love that. I saw that thing just came on the market. Let me see that baby. You know, oh, this thing is awesome.

You know, he's like, we got to go shooting. Let's go to the range. You know, let's go pick up some ammo. And the ATF agent slapped some cuffs on him. And he's like, you're a felon in possession of a firearm. You're under arrest. Oh, my God. Because he had already pled guilty.

So he was officially a felon, which, you know, you can get up to 10 years in prison if you're a convicted felon. and you're in possession of a firearm. So they arrested him for that. And he, you know, they argued to the judge that they should not grant him bail because he was already violating the terms of his bail in South Florida to go to Orlando. So he's shown that he has no respect for, you know, the terms of his bail. And so they kept him in, I think it was county jail.

I don't remember. Yeah, I think it might. have been county for like almost a year, you know, while he was awaiting for the, while the whole Ralph trial played out. And eventually he, he could have gotten 10 years for the weapons charge, for the possession charge. And he could have gotten up to five years for the, for the fraud charge, you know, for the Chinese ammo charge because, you know, he had pled guilty so they combined all the counts into one. They can't change that. But they could, but they could recommend to the judge to give him the maximum sentence. So he could have gotten a

total of 15 years, but he ended up getting four. So he hired the best lawyers in the business. They negotiated hard. Wow. He ended up getting four. And he served, I think, three and a half, something like that. Yeah. Yeah. Wow. What was the biggest lesson you learned from this whole thing? I would say the biggest lesson is that be careful who you work with, you know, be careful who you associate with in general, not just work, but, you know, and that sometimes, um, you may think that, that, oh, you know, like I thought, my, my thought process the whole time was like, I really didn't like the, I didn't like working with him in particular. I didn't like the work in general. Um, it wasn't something that particularly interested me. I mean, it's really glorified

logistics, really, you know, um, it's more complicated in logistics because you have to do the extra licensing for military equipment. But so it's just a more complex version of logistics is not the kind of work I wanted to do, you know, for my whole life. Never really wanted to be an arms dealer. And I hated working with DiViroli just because he was just such a stressful person to be around. But I thought to myself, well, if I could just stick it out just a little bit longer,

a little bit longer, you know, I'll make millions of dollars and then I'm set. And then I could do, I'll be free, you know, for the rest of my life to pursue my my passions. And, you know, like, I understand why I made that decision at the time. And I think that, that, but like, sometimes I question, you know, like, if the deal had gone well and he didn't fuck me over, right? And I made $15 million, right? Would I have stopped at that point? Or would I have been like, oh, I can make $100 million, you know? Yeah, I'm so good at this. I'm such a great arms dealer, you know, people tend to do what they're good at, you know. So, you know, I mean, I could have stopped, but I could have also very well not have stopped. Right. So, you know,

I think that being very careful about who you work with, you know, and not, and taking the long view, you know, of, you know, you may think that that you can make a lot of money now real quick, but there's a lot of ways to make money and there is, and what you work becomes a huge part of who you are. And so you have to be very careful about, about, you know, because that's most of the time you spend is, you know, your waking day is in your job, right? So you become the things that you work at. So you have to be very careful about, about what you do, you know, that you're happy with the work you're doing, you feel satisfied and fulfilled by the work that you're doing, who you're working with, that you actually trust them, that you like them as a person,

and think that, never think that anything, you know, is going to be just a short-term thing, because in life, things just always extend way longer than you expect. And most of the things you do just keep on going, especially if they're going well. Right. You know, have you, do you ever think about, do you think about him anymore? Do you, do you reflect on all this at all, like day to day or how much reflection do you do? And have you had any contact with him since all this went down? So, I mean, in the beginning, I was reflecting about it a lot because it was just such a, you know, stressful, terrible experience.

Right. Thankfully now I don't, I barely think about him at all. You know, the only time ever think about him is when someone wants to talk about the story. You know, or, you know, there are some things that, you know, kind of remind me of him, you know, um, uh, uh, you know, just the, um, um, you know, like there's, I think that nobody is all good or all bad. Right. Right. You know, there's a lot of things I admire about it. You know, one of the things I admire is an incredible work ethic. Never seen any one work harder. You know, never. I thought it was. ordering on obsession was very unhealthy, you know, but, uh, but he managed to achieve things that

99.999% of people never achieve because they didn't have that dry, you know. So, you know, I've, I've learned a lot about that, but I've also learned a lot about what not to do. You know, you can't, as you said, you can't burn, you can't live your life burning bridges. I mean, I guess you could and he has, but eventually it will bite you in the ass. And it did. You know, he spent four years in prison because he had no problem burning every bridge he came across. And to be honest, I mean, not that I wish this on him. You know, I honestly, I don't really care. You know, I wish him the best.

I heard he's married now. I heard about that. So, you know, I don't know what his life is like. Now, I hope he's a different person, though I doubt it, you know, because I've Alex bumped into him after prison and he was pretty much the same guy. And, you know, but. But, you know, like I, you know, I don't, I don't like, I don't like thinking about him. Excuse me. You know, I don't like thinking about him.

And I'd be happy if I never interact with him again, you know. Unless he, if he said, if he calls me up and or, you know, whatever. And he's like, hey, David, you know, I've been thinking a lot about, you know, our time, you know, that we spent. And I feel like I really wronged you. And here's, you know, a $5 million check of all the money I owe you. I would be like, we're best friends now. You know, you can buy my friendship like that. Yeah, I mean, if he apologizes and admits his wrong doing and, and, you know, and makes up for it, absolutely.

You know, I'm a forgiving person. You know, I don't have like a vendetta against him or anything like that, you know. But he's never going to do that. I mean, at least every, every bit of evidence that I know about, you know, my experience with him is that he's never going to do that. So in that case, you know, I have no desire to interact with him again. And I hope he doesn't hurt too many people, you know, along the way of what he's doing now. How much money did you make overall with your whole career working with Ephraim? Not that much. I'm almost embarrassed to say. Come on. Tell us.

It wasn't that much. It was, I think, total, like before the Afghan contract, you know, somewhere in the neighborhood of, like 50, 60K. Wow. Yeah. I mean, before the Afghan contract, I'd only been working for like, like, uh, eight, nine months, you know, so not terrible to start out. Uh, of course, you know, that money got rolled into other deals, you know, so it's not like I actually made that money and, you know, uh, and then once I won the Afghan contract, I wasn't going for any other contracts. So I was just focused on that, you know, so, you know, what are you doing now? What I'm doing now? My favorite subject. So I got into, it's very interesting how I got into my current line of work.

While I was under house arrest, I was, you know, I got sentenced to seven months of house arrest. I felt very, very, very lucky, you know, managed to avoid prison. Any amount of house arrest is, you know. As long as you spend time with your kids, right? Exactly. I was with my daughter, you know, and I got, you know, to eat out of my own kitchen and use my own private bathroom. I mean, paradise compared to prison. You know, I could play my guitar.

You know, I've been playing guitar since I was a kid. And so I was playing a lot of guitar because I was bored. You know, I had the ankle tracker on my, you know, so I couldn't leave the house. And I really missed playing with other musicians in general, but particularly I missed playing with a drummer because, you know, the drums give the music the beat, which is the energy and the music. And, you know, people dance to the beat, right? without the beat music sounds kind of lame so i was playing my guitar but i really wish i could play along with the drummer but no drummer's going to bring their entire drum set over my house it's a pain in the butt to move a drum set and even if they did i mean they would wake up my entire apartment

building they'd go nuts so uh so i bought a drum machine which is a electronic device uh goes on the table has a bunch of buttons on it each button makes a different drum sound you can make beats on it and play it back in a loop so i would make like beats and and have like a beat to play along to with my guitar. But every time I wanted to change the beat, like to go from like verse to chorus, I, you know, like I needed to stop playing my guitar, press a button on the machine to change the beat and go back to playing my guitar. And it interrupted the flow of the music. So I was like, I tried doing it with my toe, but it was super like, you know, awkward.

And I was like, I need like a drum machine that's like in a pedal format, you know, something that I could control hands free with my foot while I play my guitar. And so I went online to, I was sure someone made something like this. So I went online looking for something like this. And I couldn't find it. And I asked my musician friends if they'd found any, if they'd seen anything like this. And they're like, I've never seen anything like that. But that sounds super cool. Let me know if you find it because I'll get one too.

That sounds super cool. And so I was, so I did a patent search. Nobody had even patented the idea, which shocked me. I mean, it was such an obvious idea to me. And so I thought, well, if everyone wants it, nobody's making it. there isn't even a patent on it. So this is my opportunity to, you know, do something useful and constructive, you know, with my life. And so I started, I didn't know anything about developing electronic equipment. I started Googling it. You know, I learned about the different types of

engineering. And I was actually studying mechanical engineering in school at the time, but I was very low level. I was like doing like an associate's degree, you know, the first two years. So it wasn't like I could do any of the engineering myself. But, Eventually, I found a engineering team that could build it. I first hired people that did a terrible job. I had to fire them and then had to find new people. It's like a whole process. Took me three years.

So well beyond my probation period. Three years until I got a working prototype. And it was my first product. It's called The Beat Buddy, like your buddy that plays the beat. Go check it out. Is there a website? Yeah. SingularSound.com.

That's the singular sound.com. Singular sound.com. Yeah. It's like you're playing by your singular self, you know. And since then we've come out with seven other products all aimed at musicians. Oh, no way. And like a whole, yeah, we have like a cable winding device to wind your music cables. We have a world's most advanced looper, which records your music and plays it back in loops.

Pull it up. Okay. Singularound.com. That's cool. Yeah. sound. Yeah. And yeah, that's the site. So that's the world's most advanced looper pedal, which, you know, records your music and plays it back in loops. You can do lots of different layers of music as well as you just tap those little chrome buttons with your foot. Exactly. It's a meant

to be a hands-free device. You see the wheel on the right side there. You can control the volume of the different tracks as you lay them down. So you could do like live mixing hands-free. So that's our most recent and most technologically advanced product. Yeah, that's a little cartoon. That thing's incredible, yeah, thank you,

thank you. Yeah, so the one on the right is the cable winding device. And that one on the left, the beat buddy, that's the first product. Okay. And you have seven different products now.

Yes. Wow. And now we actually recently launched my brother and I, we came up with this idea for our first, a non-musical product. Oh, yeah? Yeah. So we've always been like kind of complaining. I mean, I really shouldn't be complaining because we've done very well with the music company. We got a whole bunch of awards. I've met some of like my musical idols who use my products. You know, it's super cool. Yeah. One of my favorites experiences was, so I'm a big Allison Chains fan.

Like I learned to like to play guitar listening to their music as a kid. And their basis, Mike Inez, he came up to me at a trade show and he's like, oh, you made the beat buddy. I just bought one two months ago. I'm like writing all my music on it now with it. That's fucking incredible. I was like, I learned to play guitar listening to your music. That's so fucking cool. Yeah.

So it was super, super cool. Yeah. Amazing. Yeah. So I have no complaints. You know, like we've done very well with the music company, but with singular sound. But, you know, there is the industry aimed at musicians, musicians only comprise of like 10% of the population at most.

People would consider themselves musicians. And people who buy high-end musical tech products are maybe 10% of those. So the addressable market is relatively small. You could do very well in a small niche market if you have great products, which we do. We've done very well. But we've always, my brother and I've always been trying to come up with ideas that could appeal to everyone, not just musicians. And so we were hanging out at my place. And we were eating mango.

And, you know, mango is, like, very fibrous. And so, like, gets stuck in your teeth. And so my brother asked me if I had dental floss so we can, like, get rid of the, the mango fibers in our teeth. And so my brother and I were, go to my bathroom. We're both floss in our teeth, like, looking in the mirror. And we're like, you know, this kind of really sucks, you know? Like, everyone hates flossing.

But everyone has to do it or they should, right? So what if we create a product that can floss your teeth for you? everyone would love that right and so we're like yeah that would totally do so well and so we started coming up like you know spitballing ideas we had all these crazy contraptions until we realized that that water flossers do you know what a water pick is yeah yeah so it's like with a dentist uses um i don't know the dentists don't use water they shoot water between your teeth yes okay i i thought usually dentists use um yeah some dentists do that okay okay okay so So you could buy a water pick, which is a water flosser.

Okay. Which is, they've been around since I think the 70s or 80s. And they've done research on, the way it works is it shoots a single stream of water. And you have to like aim it at the gum line. And you trace your gum line. Yeah, there it is. There it is right there. So it shoots a single stream and it's like a toothpick made out of water.

And you trace your gum line. You have to do both the. top gum line, the bottom gun line, and then you have to point it from the inside of your mouth, pointing out, if you're going to do it properly, you know, pointing outwards and trace the gumline on the inside of the mouth. And that's very cumbersome. And it's supposed to be an exact 90 degree angle to the gum line. If you do it, like pointing up at the gum, it irritates the gum. If you point down, it doesn't properly clean because it doesn't get under the, you know, the gum line. And so a lot of people when they first use it, you know, it has quite a high learning

curve, you know, like you, you know, they'll like splash all over their mirror, you know, they'll, it won't feel effective. You know, it takes some skill to learn how to do it. So, so a lot of people who buy water flossers, even though they're a lot more comfortable than string, and they've actually been scientifically verified to be more effective than string. So the water gets under the gum line and washes out all the bacteria, which string does not do. So they've done studies on this. Water flossers are more effective than string. when used correctly. The issue is that a lot of people don't use them correctly.

They do the angle wrong or they don't do both sides of the teeth. So we realized if we could design a better water flosser, all the sciences there that shows that water flasters are more effective than string. But if we could solve the pain points of a water flosser, then that would be a very successful product. So actually brought our innovation. So we came up with this, which is we call it the Insta floss.

It's like instant flossing, Insta floss, kind of like Instagram, but flossing. Hold it back a little bit, like closer to the microphone. Like the microphone is in focus, right? Yeah, yeah, perfect. Okay, so yeah, so the way it works is it's like an H shape. Yeah. And which your teeth, you know, you bite into it like that.

And there's jets that shoot out from both sides, you know, towards your teeth. And so you just put it in your mouth and this thing, this thing turn. So you just put in your mouth like this. No way. And you're done. And it does both the outside, the inside, top and bottom, and it's just a 10 second sweep. So it takes you 10 seconds to floss your teeth. And because the way it's built, it's at a perfect 90 degrees all the time.

And so you don't have to like learn to do the angle. And you could just lean over the sink and all the water just falls into the sink so it doesn't splatter your mirror. So it's a much easier to use device. faster. It's, you know, easier to learn. And, and like all water flossers, if, you know, it's painless unlike string, you know, which can cause you to bleed. So we are manufacturing this. Now it's the first manufacturing run. Anyone who wants to get it, go to instafloss.com. Instafloss.com. So website's already up. Yeah. Pull it up, Austin. Insta floss. And Ken, so are they, you're, are you still in the manufacturing phase of it? Yeah. So we're doing the first production run.

now. We're going to deliver to the people who pre-ordered. We've sold about 25,000 units to people who ordered them in advance. There it is. Bam, look at that. Yeah. And we're raising money as well. People can also invest and become an equity shareholder as well. That's incredible. And we're, yeah, we're, we're raising money to expand because we've had like a huge back order and, you know, a lot of retail partnerships, you know, potential, which we need large quantity to, you know, to do large manufacturing runs to get the price down and get it into, like, you know, Walmart and Walgreens and all those stores. That's pretty fucking cool.

I'm definitely going to order one of these. Yeah, thank you. I need one. Yeah. Everybody does. Yeah, for real. Flossing sucks. Everyone hates flossing.

No, yeah. Nobody likes it. Nobody likes it. Yeah. Well, cool, man. Yeah. I really appreciate you coming on here and share. I'll link both of those below.

Thank you. People can check them out. Yeah, incredible story. I really appreciate your time. My pleasure. Goodbye, world.