Based on the true story of modern day arms dealers David Packouz and Efraim Diveroli, War Dogs (directed by Todd Phillips) chronicles the tale of two young men who secured a 300 million dollar arms contract from the Pentagon. The dramatized version of the story includes betrayal, kidnapping, and FBI agents, but how many of the plot points really happened? In this article, we expose the true story behind War Dogs the movie.
The 2016 dark-comedy War Dogs brought in over $86 million at the box office with its cinematic retelling of the 2011 Rolling Stone article written by Guy Larson.
The shocking headline “The Stoner Arms Dealers: How Two American Kids Became Big-Time Weapons Traders” captured the attention of the nation. Book and movie deals for their story came pouring in after the release of the Rolling Stone article. The plot of the film also draws reference from Efraim Diveroli’s memoir Once a Gun Runner which expands on the story told in the initial Rolling Stones article.
Warning! This article contains spoilers for the movie War Dogs (2016).
The True Story of the Stoner Weapons Dealers That Scammed the US Military
The stars of the War Dogs story are David Packouz, born 1982, and Efraim Diveroli, born 1985. The two were only 19 and 23 years old respectively when they first came together to form their arms company in 2005. When at the end of 2006 they had already amassed over $10 million in arms contracts, it was clear that the two young entrepreneurs were destined to make history. No one could have predicted the saga of events that unfolded after the two joined forces to provide US allies with arms during the Afghan War.
David Packouz and Efraim Diveroli Before They Were Famous
Born into a Jewish family in St. Louis, Missouri–David Packouz was a licensed massage therapist before he joined Efraim Diveroli as an international arms dealer. Efraim Diveroli was born into an Orthodox Jewish family from Miami Beach, Florida and practiced strict cultural and spiritual traditions growing up. His grandfather Yoav Botach was an extremely wealthy Los Angeles property owner and his uncle is the famous rabbi Schmuley Boteach
According to his memoir, Diveroli dove headfirst into the world of international arms trading when he was only fifteen years old. His family owned a shell company called AEY, Inc. named after the initials of Efraim and his siblings. He asked his father to sell him the company so that he could use it to start his own business facilitating arms contracts with the US government. His father agreed and AEY, Inc. was born.
Armed with a laptop, some weed, and an official business license, teenage Diveroli got to work from the sofa in his one-room apartment in Miami. His goal was simple: get rich by capitalizing on the emergent need for arms dealers to facilitate weapons contracts for the US military.
Meanwhile, his highschool friend David Packouz was struggling to provide for himself and his girlfriend as an underpaid massage therapist. When he found out that his girlfriend had become pregnant, he decided to make the risky jump from massage therapist to arms dealer in order to provide for his new family.
New International Business Opportunities In Gray Market Weapons Dealing
During this time the US military was in desperate need of weapons and ammo to arm it’s allies in the Middle East. After the Cold War arms race ended in the 90’s, there were stockpiles of weapons and ammo still hidden around Europe.
In the 2000’s the US government needed to tap into this market in order to compete with other military groups, but couldn’t purchase the weapons and ammo directly without violating international trade laws. That is where companies like AEY, Inc. came into play to facilitate the sale of international arms for the US military in order to bypass international trade regulations.
David Packouz was not in support of the war, but his personal opinions came second to his lucrative new business venture. A key plot point in the 2016 movie War Dogs is the internal moral and emotional struggle that Packouz faced working at AEY, Inc. with Diveroli.
Efraim Diveroli was far from the typical teenage boy and he garnered a reputation as an “arms wunderkind”. He had an ambitious, reckless personality that led him to take extreme risks in pursuit of his goals. At first these risks seemed to pay off. As his business portfolio grew to include millions of dollars in arms contracts, more people started to take notice of him.
Often referred to as a “stoner” by the media, Diveroli struggled with a drug addiction that contributed to the series of bad decisions leading up to his arrest. Despite their young age and heavy marijuana use, Diveroli and Packouz were able to beat Fortune 500 companies in obtaining weapons contracts from the US military. Another key player in the War Dogs true story is a man named Ralph Merrill, their chief financial backer.
The “Afghan Deal” & How They Defrauded the US Government
The true story of War Dogs comes to a climax with the stoner gun-runner duo securing an arms contract called the “Afghan Deal” to provide the US government with nearly 300 million dollars in ammo and weapons. According to the contract the arms were to be obtained by AEY, Inc. from a source in Albania before being sold to the US military and distributed to American allies in Afghanistan.
Packouz was mentally unprepared for having the entirety of the US’s Afghanistan allied forces relying on AEY, Inc. to provide them with the weapons and ammunition needed to fight the war. On the other hand, this level of international power was Diveroli’s ambitious plan from the very start. His reckless ambition had made them millions of dollars so far, but it was about to take them both into dangerous and illegal territory.
Diveroli and Packouz found themselves doing business with shady international weapons dealers, top-ranking army officials, and foreign embassies in order to fulfill their contracts with the United States government. Somehow they had managed to become important figures in the Afghan war weapons trade, all while half-baked. This was only months after Packouz quit his job as a massage therapist.
They stood to make $100 million in profit from the Afghan Deal alone. Reluctantly, Packouz agreed to join Diveroli on a dangerous trip to Albania and to the Middle East to secure weaponry for the US government.
The Truth About the “Triangle of Death” Scenes
In the Hollywood rendition of War Dogs, the movie veers into the realm of fiction when we get to this point in the plot. The movie greatly exaggerates the two’s misadventures overseas in the “Triangle of Death”, which during the war was a dangerous region in the Middle East just South of Baghdad.
The movie shows the duo being kidnapped and tortured by a crazed arms trader named Henry Girard who just happens to be on a terrorist watch list. Girard is the film’s main villain and antagonist, besides the immoral Diveroli. The kidnapping, and most of the other events that take place overseas in the movie, never happened in real life. The director of Mad Dogs took creative liberties to make these scenes more humorous and dramatic for the dark-comedy action film.
What the movie did get right about their trip overseas is that upon accessing the stockpile of ammunition in Albania, they discovered that it was manufactured by the Chinese Communist party. The 100 million rounds of AK-47 ammunition from the stockpile was a huge portion of the weaponry that AEY, Inc. was expected to provide to the US military according to the Afghan Deal.
The catch is that the US military is strictly prohibited from using Chinese made ammunition due to arms embargo laws. This put the company 100 million rounds short of fulfilling the order.
Rather than forsake their profits, Diveroli and Packouz attempted to conceal the Chinese origin of the ammunition and sell it to the US government anyways. As cunning as the young businessmen were, they couldn’t get one over on the US military and were charged with conspiracy to defraud the government.
Packouz had emailed his employees with the instructions to repackage the Chinese ammunition before reselling it, which constitutes as fraud. The paper trail from these emails would prove to be detrimental to their case in court. They could not have been too surprised when the FBI came knocking on their doors. To make matters worse, Diveroli had stiffed Packouz and their financial backer Ralph Merrill on millions in profits from their business venture.
What Happened to Efraim Diveroli & David Packouz After Their Arrest?
Following their arrests in 2008, both parties pled guilty to conspiracy to commit fraud in exchange for lessened sentences. David Packouz was sentenced to only seven months of house arrest for his crimes due to his cooperation with authorities. Diveroli on the other hand was sentenced to four years in prison for his role in the shady business dealings, including falsifying documents.
Both Ralph Merrill and David Packouz sued Efraim Diveroli for the millions of dollars in profits that he withheld from them. The Afghan Deal was not the only bad business that AEY, Inc. had got itself into. They were found to have dropped the ball on several important orders in the past, including selling damaged safety helmets. It goes without saying that the two businessmen are not on good terms today.
David Packouz has left the world of arms dealing to pursue his passion for music. His music startup company has partnered with several non-profit initiatives such as Guitars Over Guns. His daughter was born in 2007, in the midst of all the arms dealing drama. Besides a 2012 arrest for soliciting prostitution from an undercover cop, Packouz seems to have turned his life around. He was happy to make a cameo in the 2016 feature film War Dogs based on his life.
Efraim Diveroli has completed his four-year prison sentence and is back in the business world. His arms company is still in operation, but is barred from being awarded government contracts until the year 2025. He currently makes money from the sales of his memoirs.
He was less than pleased with the 2016 retelling of his story and sued Warner Bros. Pictures for using his memoirs as inspiration for the movie War Dogs. The court decided that no one owned the rights to the real life events that transpired. To make matters even stranger, Diveroli’s prison cellmate claimed to be the one that actually penned his memoir. Diveroli is still fighting multiple legal battles to this day.