Efraim Diveroli Net Worth: The Arms Dealer’s Fortune After the War Dogs Scandal

Efraim Diveroli’s net worth is estimated between $15-25 million as of 2025, a fraction of the wealth he accumulated through his controversial arms-dealing company AEY Inc. Born December 20, 1985, in Miami Beach, Florida, Diveroli secured a $298 million Pentagon contract at age 21 to supply ammunition to Afghan security forces. The deal collapsed in 2008 when federal investigators discovered he was repackaging Chinese-made ammunition while falsifying documents to conceal its origin—a scheme that led to a four-year prison sentence, a 14-year federal debarment, and millions in asset seizures.

His story inspired the 2016 film War Dogs, where Jonah Hill portrayed him alongside Miles Teller as David Packouz. While Hollywood dramatized the partnership, the real financial aftermath extends far beyond the movie’s portrayal.

Career From Miami Beach to Defense Contracting

Born into an Orthodox Jewish family, Diveroli dropped out of high school at 17 and briefly worked for his uncle at Botach Tactical in Los Angeles. After an argument with his uncle, he convinced his father Michael Diveroli to sell him AEY Inc., a dormant shell company originally incorporated as a printing business. The company name came from the first initials of Diveroli and his siblings.

Operating from a Miami apartment with just a laptop, Diveroli began bidding on small government contracts through FedBizOpps (now SAM.gov), a federal procurement website. With financial backing from Ralph Merrill—a Utah-based gun manufacturer who pledged property and provided capital—AEY won its first contracts supplying helmets, ammunition, and equipment to various federal agencies.

By age 18, Diveroli had become a millionaire, underbidding major defense contractors like Northrop Grumman, Lockheed Martin, and BAE Systems. By the end of 2006, AEY had secured 149 contracts worth approximately $10.5 million.

The $298 Million Afghan Ammunition Deal

In January 2007, AEY Inc. won the contract that would define Diveroli’s career: a nearly $300 million deal to supply the Afghan National Army and Afghan National Police with 100 million rounds of AK-47 ammunition (7.62x39mm), millions of rounds for SVD Dragunov sniper rifles (7.62x54R), and aviation rockets.

Diveroli recruited childhood friend David Packouz in September 2005 to help manage operations. He also partnered with Ralph Merrill, who provided crucial financial backing and agreed to split profits 50-50. A third associate, Alexander Podrizki, handled on-the-ground operations in Albania.

The contract relied on sourcing surplus ammunition from Eastern European stockpiles—a “gray market” created after the Cold War when massive weapons caches became available. AEY secured most of its supply through MEICO (Military Export and Import Company), an Albanian state-owned munitions dealer.

Profit margins ranged between 20-30% on multimillion-dollar shipments. Rolling Stone labeled Diveroli the “stoner arms dealer” due to his marijuana use, while the Miami Herald called him an “arms wunderkind.”

The Chinese Ammunition Scandal

The scheme unraveled in April 2007 when Alexander Podrizki arrived at the Albanian depot and noticed Chinese characters on wooden ammunition crates. He immediately photographed the markings and emailed David Packouz, who responded that they needed to “get rid of” the Chinese markings since the contract explicitly prohibited Chinese ammunition.

The ammunition—manufactured between 1962 and 1974 by Communist Chinese military companies—had been sold to Albania and warehoused for decades. While pre-1989 Chinese ammunition didn’t violate the American arms embargo technically, the Army contract included Defense Federal Acquisition Regulation Supplement (DFARS) Clause 252.225-7007, which banned “any supplies acquired directly or indirectly from a Communist Chinese military company.”

Court documents and emails revealed the conspiracy:

• Diveroli contacted the State Department, asking if Chinese ammunition could fulfill the contract, but officials denied the request without a presidential national security waiver
• AEY employees discussed painting over metal cases and scrubbing Chinese characters from wooden crates
• Photos showed workers physically scraping “Made in China” off crates
• With each shipment, Diveroli falsely certified that ammunition conformed to contract requirements, citing MEICO as the manufacturer

On March 27, 2008, The New York Times published an investigation exposing the scheme. The United States House Committee on Oversight and Government Reform ruled the ammunition “unserviceable” due to age and storage conditions—some rounds were over 40 years old.

Federal Charges and Financial Penalties

In June 2008, a federal grand jury in Miami indicted Diveroli, Packouz, Podrizki, and Merrill on 71 counts, including conspiracy, procurement fraud, wire fraud, and making false statements. The indictment detailed how AEY violated federal contracting regulations while attempting to deceive Army officials.

The financial consequences were severe:

• Federal investigators seized $3.1 million from AEY’s bank accounts
• Personal assets totaling $2.4 million were confiscated, including luxury vehicles and Miami real estate
• The Army terminated the contract in May 2008 after delivering only $10.5 million worth of ammunition
• Diveroli was fined $750,000 and ordered to pay $150,000 in restitution to the U.S. Army
• Legal defense costs consumed millions more

In August 2008, Diveroli pleaded guilty to one count of conspiracy to defraud the United States under 18 U.S.C. § 371. On January 4, 2011, U.S. District Judge Joan A. Lenard sentenced him to four years in federal prison. He served 36 months before his release in 2014.

David Packouz cooperated with prosecutors and received seven months of house arrest. Alexander Podrizki received a similar lenient sentence. Ralph Merrill refused to plead and went to trial, where he was convicted and sentenced to 48 months’ imprisonment.

The 14-Year Federal Debarment

On March 24, 2011, the U.S. Army Procurement Fraud Branch issued final debarments:

• Efraim Diveroli and AEY Inc.: 14 years (ending March 25, 2025)
• David Packouz and Alexander Podrizki: 11 years (ending September 28, 2022)
• Associated companies: 10 years

The debarment was unusually lengthy—most procurement fraud cases result in three-year bans. The Army’s decision reflected Diveroli’s pattern of unreliability: AEY had three previous purchase orders terminated for default, and investigations revealed the company shipped potentially unsafe helmets and failed to deliver 10,000 Beretta pistols to Iraq.

While on bail in 2010, Diveroli was arrested in a Bureau of Alcohol, Tobacco, and Firearms (ATF) sting operation for attempting to broker arms sales in violation of International Traffic in Arms Regulations (ITAR). He told undercover agents he had ownership interests in multiple ammunition companies and couldn’t resist the business, admitting, “once a gunrunner, always a gunrunner.”

However, in March 2022, after an exhaustive government review, the U.S. Army formally terminated Diveroli’s debarment early, confirming he was “fully qualified and fit to contract with the federal government once again.” This decision came after Diveroli worked with law firm Jenner & Block to demonstrate compliance, commitment, and business remediation.

Post-Prison Business Activities

After his 2014 release, Diveroli pursued several income streams to rebuild his wealth:

Memoir Publication

In 2016, Diveroli published “Once a Gun Runner: The Efraim Diveroli Memoir”, which he co-wrote with convicted mortgage fraudster Matthew B. Cox while both were imprisoned. The book peaked at #12 on Amazon’s True Crime chart and continues generating royalty income, though specific figures remain undisclosed.

War Dogs Lawsuit

When Warner Bros. released “War Dogs” in August 2016, Diveroli filed a $5 million lawsuit against the studio, director Todd Phillips, producer Bradley Cooper, and others, seeking to block the film’s release. He claimed the movie was based on his memoir without proper compensation.

The case was dismissed in 2018. Diveroli later sued co-author Matthew Cox, alleging Cox had no rights to claim ownership of the book or his life story.

Lawsuits from Former Partners

David Packouz and Ralph Merrill filed separate civil lawsuits seeking millions in unpaid commissions and profit-sharing from the Afghan contract. Packouz claimed Diveroli owed him approximately $6 million based on their profit-sharing agreement. Merrill, who had pledged his life savings and property to finance AEY, sought restitution for his 50% profit share.

In his memoir, Diveroli disputed written profit-sharing agreements existed and claimed he offered Packouz $275,000 to settle, though he never paid due to his attorneys’ advice about appearing to provide “hush money” during the criminal proceedings.

Current Ventures

In June 2025, Diveroli launched Diveroli Investment Group (DIG), a strategic investment firm focusing on public equities, private capital, energy investments, and venture capital. Based in Miami, the firm takes positions in “overlooked opportunities” and has filed 13D SEC disclosures for activist investment positions.

Diveroli serves as Strategic Advisor, using his expertise in government contracting and procurement processes to consult for businesses navigating federal bidding systems.

Efraim Diveroli’s Current Net Worth Breakdown

As of 2025, Efraim Diveroli’s net worth ranges between $15-25 million, derived from multiple sources:

• Protected Assets from Arms Dealing Era: Despite extensive asset seizures, court filings indicate Diveroli retained protected assets and earnings from his pre-conviction period. His personal bank balance before the scandal exceeded $5.4 million.
• Book Royalties: “Once a Gun Runner” continues selling on Amazon and other platforms, generating ongoing passive income from readers interested in the War Dogs true story.
• Investment Activities: Through Diveroli Investment Group, he advises on government contracting opportunities and makes equity investments in federal contractors, aviation companies, and energy sector firms.
• Consulting Income: Diveroli provides paid consulting to businesses seeking to navigate Defense Federal Acquisition Regulation Supplement (DFARS) requirements and federal procurement processes.

The net worth estimate accounts for $3.75 million in total financial penalties ($750,000 fine + $150,000 restitution + $3.1 million account seizures + $2.4 million asset forfeiture) and millions spent on legal defense across multiple criminal and civil proceedings.

War Dogs: Fiction vs. Reality

The 2016 film starring Jonah Hill as Diveroli and Miles Teller as Packouz took significant creative liberties. Key differences between the movie and actual events:

• Their Relationship: The film portrays Diveroli and Packouz as close friends whose partnership deteriorated gradually. In reality, Packouz testified against Diveroli during the federal trial, and their business relationship was contentious throughout. Packouz has stated publicly that they are no longer friends.
• The Afghan Journey: The movie shows both characters traveling to Afghanistan and Jordan. In reality, Podrizki handled most overseas operations while Diveroli and Packouz remained in Miami coordinating logistics.
• Fictionalized Action Sequences: The kidnapping scene involving a character played by Bradley Cooper never occurred. The film added dramatic encounters and dangerous situations for entertainment value.
• Profit Distribution: The movie suggests an equitable partnership. Court documents reveal disputes over profit-sharing, with Diveroli controlling finances and allegedly withholding agreed-upon payments to Packouz and Merrill.

The film was based on Canadian journalist Guy Lawson’s Rolling Stone article “Arms and the Dudes” (later expanded into the book “Arms and the Dudes: How Three Stoners from Miami Beach Became the Most Unlikely Gunrunners in History”).

David Packouz Net Worth Comparison

David Packouz took a different path after his house arrest ended. His estimated net worth is approximately $2.9 million, earned through:

• BeatBuddy: A company selling electronic drum machines and music equipment
• Singular Sound: Music technology ventures
• Instafloss: An oral hygiene device he invented
• Consulting work on the War Dogs film

Packouz resides in Florida and focuses on music technology and product innovation, maintaining distance from arms dealing entirely.

Where is Efraim Diveroli Now?

As of 2025, the 39-year-old Diveroli lives in Miami and has rebuilt a portfolio of business interests following his debarment termination. With his federal contracting ban lifted in 2022, he’s positioning himself as an expert on government procurement compliance.

Beyond investment activities, Diveroli maintains a relatively low public profile compared to his War Dogs era. He has reportedly fathered a daughter with an ex-partner, though details remain private.

In a 2021 Vice interview, Diveroli reflected on his past: “I thought I was untouchable.” His story remains a cautionary example in defense contracting circles—a meteoric rise fueled by aggressive bidding and cost-cutting that ended in criminal prosecution and the loss of most of his fortune before age 25.

The remaining $15-25 million represents both what survived extensive legal penalties and what he’s rebuilt through legitimate business ventures, memoir sales, and investment activities. While substantial, it’s far short of what controlling nearly $300 million in federal contracts might have generated had he operated within legal boundaries.