AEY Inc. is a U.S. Government arms and ammunition supplier and had been awarded almost $300 million in contracts. These contracts were to supply the Afghan army during the US Afghanistan War.
Lets look a little closer at AEY Inc. The CEO (Efraim E. Diveroli) is 22 years old and the Vice President is a masseuse. It gets even uglier. AEY operates out of Miami Beach in an unmarked office. Nice huh? AEY was incorporated in 1999 when Efraim was 13 years old. His experience with arms and ammunition was very limited, similar to working in a gun shop. Nevertheless he pursued government contracts aggressively.
AEY Inc was awarded a $126,000 ammunition contract in 2004 for the Special Forces and also provided equipment to the Department of Energy, EPA, TSA and the State Department.
How they were approved as a supplier..I don’t know!!! I suspect they bought somebody.
AEY Inc. managed to secure another contract for $5.7 million for rifles for the Iraqi forces. The company started to get a bad name because they were not reliable yet continued to do business with and make deliveries to the U.S. Government.
In 2007 AEY Inc. was awarded another contract. Why? Because “AEY’s proposal represented the best value to the government.” In other words the price was the lowest. They did not care about what they were buying or from who. Actually there is one more possibility….AEY Inc. was paying someone. Maybe AEY Inc. had a Lobbyist in Washington?
Nobody checked out this business at all. What is that???
The huge ammunition (millions of rounds) contract AEY Inc. had secured was represented by 40 year old military surplus from Albania. Since there was no testing requirement for the 7.62x54R munitions, any ammo that would function could be delivered. He picked up huge lots of old surplus ammo for around $22 per 1000 rounds. He probably tripled his money on the ammo. The Afghan army officials refused to use some of the ammo. It was substandard and corroded and/or damaged.
Here is the 7.62x54R ammunition supplied to the Afghan military by AEY Inc. It is corroded badly and was most likely stored in old barns or abandoned warehouses. This ammunition was exposed to moisture and the elements for long periods of time. The 7.62x54R round is widely used in AK pattern rifles and machine guns. It is manufactured in many Euro countries and is a very effective round. It is equivalent to the U.S. 7.62×51 or .308 NATO. If you want to read more about military ammunition or ammunition in general read The Ammo Blog.
AEY never disclosed, and neither did the Army, its sources for weapons and ammunition. Some of its sources were Albania, Bulgaria, Czech Republic, Hungary, Kazakhstan, Montenegro, Romania and Slovakia. AEY Inc. did business with known Black Market dealers.
Albania has huge stockpiles of 7.62x54R ammunition made by China in the 1960’s and 70’s. It has been said that these stockpiles should all be destroyed. AEY Inc. purchased more than 100 million rounds.
AEY Inc. has violated many laws and may have been involved with the black market. They are a real “shady” organization.
It’s amazing how this type of company can do business with the U.S. Government first of all.. and then break laws….and supply garbage. And do they get caught? Shutdown? Investigated? NOPE
How can this happen? It seems like it would have been soooo easy to decline this supplier in the very beginning. This company had no prior experience in arms sales with the U.S. or any other government.
So how did AEY Inc. get supplier approval and $300 million in contracts?
I guess you could ask the same question about the F-35 fighter. How did Lockheed Martin get the contract after HUGE cost over-runs like $100 million per plane. It started out at $35 million and ended up at $135 million per plane.
I have a one word answer…. LOBBYISTS.
For the U.S. Government to approve an unknown arms supplier with no past expereince, no real business office or credentials is preposterous….unthinkable even. There are plenty of suppliers for arms and weapons so it’s not like there is a shortage.
…Somebody’s bank account just got bigger.