June 19th, 2007, a Tuesday morning. Miami Beach was already hot. The kind of wet heat that made the palm trees look tired. Inside a cramped office above a strip mall laundromat at 925 Northeast 169th Street, two kids sat staring at a computer screen. One was 21, the other was 25.
Neither had ever served a day in the military. Neither had finished college. On the screen in front of them, an email from the United States Department of Defense. Subject line contract award solicitation number W52 P1J-7-R-0018. The body of the email was three paragraphs of federal language. But the number buried in the middle was the only thing that mattered. $298 million.
They had just beaten Loheed Martin. They had beaten General Dynamics. They had beaten every legitimate arms supplier on the planet. Two kids from Miami Beach operating out of a building that shared a wall with a pet groomer. Were about to arm an entire foreign army. This wasn’t a movie. This wasn’t a heist crew.
These were not soldiers, not gangsters, not even adults by most measures. Ephraim Devoli was a high school dropout with a temper and a federal firearms license. David Peekuz was a licensed massage therapist who played guitar in his spare time. Together, they ran a company called AEY Incorporated, and they were about to ship 100 million rounds of ammunition into the most dangerous war zone on Earth.
The catch, the bullets were 40 years old, Chinese made illegal under American law, and rotting in crates in a bunker in Albania. This is the story of how two reckless kids hustled the most powerful military system on Earth. How they turned the Pentagon’s own bidding system into an eBay loophole. How they undercut billiondoll defense contractors by $53 million.
And how they nearly armed the Afghan National Army with ammunition so old it could have blown up in the soldiers hands. This is the rise and the spectacular fall of AEY. But here’s what the headlines missed. Davarolei and Pacuz didn’t get caught because the Pentagon discovered them. They got caught because of a New York Times reporter, a disgruntled Albanian truck driver, and a photograph of a cardboard box. That’s the part nobody talks about.
So, let’s rewind. Ephraim Devoli was born in Miami in 1985. He grew up in a religious Jewish family, the kind where Friday nights meant Shabbat dinner and grandfather stories about hustling in the diamond trade. But Ephraim was different. He was hyperactive. He was aggressive. He was, by every account from people who knew him, obsessed with money from the time he could speak.
At 12, he was running a side business selling air conditioners his uncle imported. At 15, he got kicked out of high school in Miami. His parents sent him to Los Angeles to live with his uncle Boac Tactical, a federally licensed arms dealer who supplied police departments across the country. That’s where Efim got his real education, not in school.
In the back office of a gun warehouse in Van NY, he watched his uncle file paperwork. He watched the wire transfers. He watched how a single signature could move a shipping container of rifles from Bulgaria to Baltimore. By 16, Ephraim wasn’t just learning the business. He was making calls. He was negotiating with Eastern European brokers.
He had memorized the entire Federal Weapons Procurement Code. He could quote regulations the way other kids quoted rap lyrics. And he saw something nobody else his age saw. He saw that the United States government, the largest buyer of weapons in human history, conducted most of its small contracts through a public website, Fed Biz Ops, Federal Business Opportunities.
Anyone could log on. Anyone could bid. The only thing standing between a kid in his bedroom and a Pentagon paycheck was paperwork. At 18, Ephraim flew back to Miami. He cashed in a small savings account. He registered AEY incororated as a federal contractor. He set up shop in his bedroom at his parents house.
And he started bidding small contracts at first. A few thousand replacement parts for old rifles, ammunition for a National Guard unit in Indiana. He learned fast. He learned that the Pentagon graded bids on a single number. Price. Not reputation, not experience, not even capability. just the lowest dollar figure won.
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That’s when he called David Pakuz. David was different. David was the calm one. He grew up in the same Miami Beach Jewish community his father was a respected rabbi. David had been a model student until he discovered weed and acoustic guitar around age 16. He drifted. He took a course in massage therapy.
He was working in a Miami spa, rubbing the backs of retirees, making $75 a session. Ephraim called him in late 2005. The pitch was simple. Come work with me. We’re going to sell guns to the government. We’re going to be millionaires by 30. David said yes. Of course, he said yes. He was 22 years old. He was drowning in student debt. Efim, for all his flaws, had this way of making the impossible sound inevitable.
The first two years, AEY was a small operation. They bid on hundreds of contracts. They won a few dozen helmets to Iraq, pistols to a base in Kuwait, berets to Bolivia. Each deal was small. 20,000 here, 80,000 there. By 2006, AEY had earned just over $10 million in federal contracts. Real money, but not transformational money.
Not for the kind of life Efim wanted. Then came the moment that changed everything. In late 2006, the Pentagon posted a new solicitation. The Afghan National Army needed ammunition. A lot of it. The contract called for, and this is the part that sounds insane out loud, 100 million rounds of AK-47 cartridges, 200,000 rocket propelled grenades, mortar shells, aviation rockets for Soviet era helicopters.
The total value, $298 million. The biggest single ammunition contract the Pentagon had ever opened to public bidding. Loheed Martin bid. General Dynamics bid. So did every major arms supplier in the Western world. And Ephraim Deoli, 21 years old, bid against all of them. Here’s how he did it.
And this is the part you have to understand to understand everything that comes after. Ephraim had figured out something the giants hadn’t. The Pentagon contract didn’t specify where the ammunition had to come from. It just had to be non-Americanmade because they didn’t want it traceable back to the US. It had to be compatible with the weapons the Afghan army already used, which meant Soviet block calibers, and it had to be delivered fast.
The giants assumed they’d source from current European manufacturers. New ammunition, $2 a round, maybe more. Their bids came in around $350 million. Efim went a different direction. He had spent two years building contacts in Albania, Bulgaria, Romania, Czech Republic, countries that had massive Soviet era stockpiles left over from the Cold War.
Ammunition that was sitting in concrete bunkers rotting that the host governments desperately wanted to sell for pennies on the dollar. Ephraim found a contact in Albania named Costa Traba. A businessman who controlled access to a stockpile of nearly 700 million rounds of Chinese made ammunition from the 1960s and ‘7s.
China had shipped it to Albania during the brief Ceno Albanian alliance. It had been sitting in mountain bunkers ever since. The price 2 cents a round, 2 cents. Do the math. Buy at two cents, sell to the Pentagon at 4 cents. On a hundred million rounds alone, that’s $2 million in clean margin on the cartridges across the entire contract with the RPGs and mortars and aviation rockets factored in.
Ephraim’s profit projection was somewhere between 40 and $80 million. He bid $298 million, 53 million below the next closest competitor. The Pentagon awarded AEY the contract on January 26th, 2007. Two kids, a strip mall office, a $298 million contract. They hadn’t even hired a real staff yet. Here’s where it gets interesting.
Because Efim Flynn David had just walked into a trap they didn’t see. They had won by promising to deliver something they couldn’t legally deliver. United States law, specifically a regulation that had been on the books since 1989, prohibited the purchase or transfer of Chinese manufactured munitions by the Department of Defense. It didn’t matter that the Cold War was over.
It didn’t matter that the rounds were 40 years old. If the ammunition had a Chinese stamp on it, the Pentagon couldn’t buy it, couldn’t touch it. The law was absolute. The plan was repackaging. Efim hired workers in Albania, mostly through Costa Trabika’s connections, to open every wooden crate of Chinese ammunition, to remove the rounds from their original sardine cans, which were stamped with Chinese characters and dates from the 1960s, to dump those rounds into generic cardboard boxes, and to ship those boxes to Kbble with paperwork claiming the ammunition
was Albanian surplus, not Chinese, Albanian. The cost of repackaging, according to court documents that came out later, was supposed to be borne by AEY, but Afr being Afram tried to shave it. He squeezed Costa on the repackaging fee. He shorted payments. He threatened to find another supplier.
And Costa, who had spent his life navigating dangerous men in Eastern European arm circles, started to feel like he was being cheated. That mattered because Costa was about to become the most important enemy these two kids would ever make. The first shipment started flying out of Tana in March 2007. C27 cargo planes loaded with cardboard boxes of repackaged Chinese ammunition.
Destination Kabul International Airport. By the summer of 2007, AEY had delivered tens of millions of rounds to the Afghan National Army. The money was flowing. Efim bought a Mercedes. David started thinking about buying a house. They hired a small team in Miami. They expanded into the office above the laundromat.
They had made it, but the ammunition was bad. That was the part nobody at the Pentagon wanted to admit. Afghan soldiers were opening the boxes and finding rounds that were corroded. Cartridges that had turned green from 40 years in humid bunkers. Some rounds wouldn’t chamber, others fired weakly. There were stories, and this is from interviews conducted later, of Afghan soldiers refusing to load their rifles because they were afraid the ammunition would explode in the chamber.
American advisers started noticing. They started asking questions. They started taking photographs. Then in July 2007, the bottom fell out. An employee of AEY named David Pacuz, the same David, had a moment of conscience or panic or both. He sent a confidential email to a Pentagon contracting officer flagging concerns about the ammunition’s age and origin.
The email disappeared into a bureaucratic black hole. Nothing happened, but the seed was planted. Meanwhile, back in Albania, Costa Traba was getting squeezed harder. Ephraim had short paid him by hundreds of thousands of dollars. They were screaming at each other on the phone. And Costa started recording the calls. He recorded one in particular, Ephraim, in a moment of unguarded anger, complaining about how much the repackaging was costing him, saying things he should never have said into a phone, calling the Chinese origin of the ammunition a problem they needed
to hide. That recording would eventually end up on the desk of a New York Times reporter named CJ Chivers. The trap closed slowly. Chivers had been investigating American military contractors in Afghanistan for months. He had heard rumors of bad ammunition. He had heard whispers about a young Miami contractor with a Pentagon deal that looked too good to be true.
In late 2007, he flew to Albania. He met with Tribea. He listened to the recording. He saw the cardboard boxes. He photographed the original Chinese sardine cans dumped in a pile behind a warehouse in Tyrana. 40-year-old stamped in Mandarin dated 1966. On March 27th, 2008, the New York Times published the story front page.
Above the fold, the headline was straightforward supplier under scrutiny on aging arms for Afghans. The sub headline named names Ephraim Devoli AEY Incorporated $298 million contract Chinese ammunition federal violation. Within 72 hours, the FBI was at the door of the office above the laundromat. Within a week, the army had suspended AEY from all federal contracting.
Within a month, a federal grand jury in Miami had been convened. Within 90 days, the indictments came down. 71 counts, conspiracy, wire fraud, major fraud against the United States, false statements, each count carried up to 20 years. The aftermath played out in slow motion. Ephraim Devoli pleaded guilty in August 2009.
He was sentenced to 48 months in federal prison. David Pacuz pleaded guilty to a single count and was sentenced to 7 months of house arrest. Two other AEY employees took plea deals. The $298 million contract was cancelled. The army scrambled to find a new supplier. Tens of millions of rounds of suspect ammunition were quarantined or destroyed.
But here’s the part that haunts the story. Costa Traba, the Albanian businessman whose recordings brought down AEY. On September 12th, 2008, six months after the New York Times story published, Costa was found dead. His Jeep had flipped on a remote mountain road in northern Albania. Albanian police ruled it a single vehicle accident.
His family, his friends, and the New York Times reporter all believed otherwise. Trabika had told multiple people in the weeks before his death that he was being followed. He had told his lawyer he feared for his life. He had named names, powerful names, Albanian officials, international brokers, men who had a lot to lose if his testimony ever reached an American courtroom.
The accident scene, when investigators examined it later, showed no skid marks. The Jeep had simply left the road on a clear day on a road Costa had driven hundreds of times. Some say it was suicide. Some say it was murder. What’s documented is that the man who could have testified against everyone involved in the AEY scheme died before he could ever take the stand.
The legacy of AEY is bigger than two kids in a Miami office. The case forced a complete overhaul of how the Pentagon vets its contractors. New rules were written requiring background checks on principles of bidding companies. New rules requiring physical inspection of ammunition origins. New rules limiting the number of contracts that could go to a single small business in a year.
The Government Accountability Office produced a 150page report. Congressional hearings were held. Senator Carl Levan called the AEY contract and these are his exact words, a stunning failure of the contracting system. Efim Dverley served his time. He was released in 2014. He wrote a memoir, Once a Gunrunner.
He launched a YouTube channel. He went on podcasts. He played himself as a misunderstood entrepreneur who got crushed by a system he was too clever for. David Pos served his house arrest, went back to music, and became a low-key adviser to small businesses navigating federal procurement. Neither man was ever charged in connection with Costa Traba’s death.
Neither has ever publicly addressed it in detail. But the deeper truth of the AEY story isn’t about two kids who got greedy. It’s about a system that allowed them in. The Pentagon, the largest spender on the planet, had built a contracting process so focused on lowest price that it stopped asking the basic question, who are we doing business with? It treated arms procurement like an eBay auction.
It assumed the paperwork was the safeguard. and two kids from Miami Beach armed with nothing but a federal firearms license and an internet connection proved that assumption was a fantasy. Efim Dvoli was 21 when he won that contract. David Pacuz was 25. They had no military experience. They had no foreign policy expertise.
They had no security clearance worth mentioning. And they stood between American taxpayers and the Afghan front lines for the better part of a year. They armed soldiers with rounds that should have been melted down decades earlier. They moved munitions across three continents under false paperwork. They beat Lheed Martin at a game the Giants thought only they could play.
And the most uncomfortable part of the whole story is this. They almost got away with it. If Ephraim had paid Costa on time, if he had repackaged the ammunition properly, if he had let David handle the relationships instead of screaming at suppliers. AEY might still be a federal contractor today. The fraud might never have been discovered.
Tens of millions more rounds of corroded Chinese ammunition might have been shipped to soldiers who trusted the supply chain to protect them. That’s the real story of AEY, not the glory of the hustle, not the audacity of two kids beating the Pentagon. the grinding ugly reality that the most powerful military on earth was for one full year dependent on the personal grudge of an Albanian businessman to discover the rot in its own supply chain.
The system didn’t catch them. A reporter did. A recording did. Efim devol wanted to be a legend. He wanted to be the kid who outsmarted the Pentagon. He got what he asked for, just not the way he imagined it. If you found this story fascinating, hit subscribe. We drop a new investigative documentary every week covering the schemes, the schemers, and the systems that let them thrive.
