307: War Dogs with David Packouz

Dan LeFebvre  03:13

Let’s start by looking at the movie overall to get an idea for how well it does capturing the essence of the true story. If you were to give war dogs a letter grade for historical accuracy, what would it get?

David Packouz  03:25

A letter grade…I would give it a “C.”

Dan LeFebvre  03:28

A “C”, okay.

David Packouz  03:29

I see. Yeah, I would say it’s it the broad strokes of the story are true. Even a lot of the details are true, but there are some major changes that they made. Some character changes. Some some things they put in there that never happened. And they left out plenty of things that did happen. So I would say I would give it a “C” maybe maybe a C+, I’ll give it a C+, generous. Be generous. Nice. Yeah.

Dan LeFebvre  04:02

Well, near the beginning of the movie, it kind of sets everything up to show how your character in the movie then becomes a gunrunner. It starts with Miles Teller’s version of you working as a massage therapist Miami 2005 and trying to start up a business selling bedsheets to retirement homes. Then there’s a sequence of events that lead to working with a DUI as an arms dealer starts in a movie with a childhood friend Efraim Diveroli, he moves back to Miami runs into you at a funeral doesn’t seem to be coincidental according to the movie. After that, Iz gets pregnant. That’s your character’s girlfriend in the movie and since the movie the bedsheets business isn’t really taking off from offers a job at his company at why and we find out that’s a one-man operation. Meanwhile, he wants to bring you on according to the movie, you know, it’s basically he’s okay with getting living off the crumbs as he puts it in the movie. You know, there’s these big government contracts and he’s just this one-man thing but he brings you on and he mentioned that he makes like $200,000 in the past eight weeks. So with a child on the way that becomes very tempting offer How well did this movie Deuce kind of setting up this scenario to you working at AEY?

David Packouz  05:14

it’s overall true. But there are some significant differences in what actually happens. At the time that I, first of all, I didn’t meet Efraim at the funeral. You know, it’s a cool scene in the movie, but I actually bumped into him. So we had known each other since we were kids. That is true. We went to the same synagogue, and neither of us like to pray. So We’d sneak out during prayers and hang out on the basketball courts and with all the other kids who didn’t like to pray, which was most of them. So, so that’s how we knew each other. But when he was 16, he got sent over to work for his uncle in LA, his uncle owns a big pawn shop. And that’s how he got obsessed with guns and government contracts. And he learned the business from his uncle. When he was 18, he came back to Miami, he claims his uncle screwed him out of a whole bunch of money. His uncle claims that he screwed him at a bunch of money. They’re both well known scumbag. So, you know, I believe both of them. And, and he started his own business in in Miami. Well, he took over his dad’s business at AEY Inc, which does stand for something by the way, unlike Stanford, yeah, exactly. So AEY stands for the initials of his dad’s three sons of Rummy, F from Ania Shaya, so the E and a y is f firms initial. And so yeah, he named it after his three sons. And a Y was being his dad incorporated to use as some sort of like label printing business, but hadn’t been doing any business with the corporate structure. So he’d let it like, go dormant. And so when EFRAIM came back, he took over the company and registered with the federal government started bidding contracts, and started doing really well. This was like 2004, right after the invasion of Iraq. So there was lots of lots of government spending going on in Iraq. And a lot of it was going to small business because the whole scandal with like Halliburton with Dick Cheney was the Vice President of the United States. And he used to be the CEO of Halliburton, and they gave Halliburton a whole bunch of multibillion dollar contracts without any competition and so they increase so to to, to counteract that the increased the amount that was set aside for small business, which of course, EFRAIM qualified, so So you started doing really well about after about a year of him working on his own in Miami is what I bumped into him. And I bumped into him at a mutual friends of ours, a house, and we were both smoking weed with our mutual friend. And he asked me, Hey, you know, what you’re doing these days. And so I told him, I was at the time I was in college, I was studying chemistry. And I had a few businesses going, I was working part time as a massage therapist. That part is true. I did have occasionally have gay clients do inappropriate things, but nothing too crazy. That towel thing did actually happen to me. That did happen. A very, very rarely it was it was very rare. But by and large, all my clients were very respectful and, and professional and but but I had my my main businesses at the time was selling SD cards online. I was buying them in bulk from China and selling them on eBay. And through that, I got into selling bedsheets and linens and towels. Because one of my friends said hey, I know you’re doing SD cards you have experience in finding suppliers overseas and importing things and I’m selling. I have a distribution business selling bedsheets and towels to nursing homes. So if you can get me a better price than my distributors, I’m happy to buy from you. So I started researching it. I found a bunch of manufacturers got really good prices did arrange logistics and started selling it to him and in real life. I was actually selling successfully bed sheets and linens and I never took delivery of them. I never filled my house up with boxes of bed sheets that never happened. Pretty much I was just a broker I would make a deal with the buyer and make a deal with the supplier and just do the do the deal. I never even took possession. I didn’t even have to put up my own money. It was a transferable letter of credit they call it which so it’s just the bank held the money in escrow and released it to the seller as soon as the goods were were confirmed to be loaded aboard the ship. So I was doing pretty well actually, at the time, I had about $200,000 to my name, which is not bad, especially for someone who’s 23 years old. It was way more money than most of my friends had. And I thought I was hot that I thought I was like, you know, pretty good at this business thing. And then I bumped into from and he asked me, you know what you do? And and so I told him, and he’s like, oh, you know, that stuff that’s actually very similar to what I’m doing, you know, finding suppliers overseas, arranging logistics, licensing, you know, import export permits, figuring out the financing, setting it all up. You know, you’re doing pretty much everything I’m doing, except that I’m making way more money than you. And I’m like, oh, yeah, he’s like, Yeah, I’m making way more money than you. So you should like, you know, I’m actually looking for some good, somebody to work with me could use a guy like you, you know, like, you’re smart guy, I can trust you. We’ve known each other forever. You know, come work with me, and we’ll make way more money together. And I said, Well, I mean, that’s interesting, but how much money have you made. And so he opens up his laptop and shows shows me his Bank of America bank account. And he has $1.8 million of cash in the bank. And he was 18 years old at the time. He’s actually younger than me. He’s he’s about four years younger than I was 22. He was 18. We’re both about our birthdays are close to each other. So he was about to turn 18. I was about to turn 23. And so he, I couldn’t believe it, because I knew that he had made that money on his own. I knew his family. I know. They’re not like his parents aren’t rich. His grandfather’s a billionaire, but his grandfather is one of these insane people who gives nobody anything like even his own, like ex wife, he tried to screw her out of like giving her any alimony at all. After they’d been married for like 40 years. It’s a famous case. He’s a very, very screwed. He’s Iranian, his grandfather, and his grandfather was married to his grandmother, his little side story. His grandmother was married to the grandfathers married his grandmother for like, I think 40 years, they had like eight or nine kids together. And then she decided to divorce him, I think, because she claimed he was like physically abusing or something like that. And, and so she tried to divorce him. And it turned out that they had never been legally married. They had just been, she didn’t realize it. And but they had never been legally married. They were only religiously married. And even though they had like, like nine kids together, according to the state of California, they’re not legally married. So so he decided that he was going to give her zero, like 00 Money, zero help anything. And so she sued him, it was the biggest alimony lawsuit in history. I think she sued him for like $700 million. Yeah, so anyway, that’s that’s the family he comes from, but, but I know that his grandfather, if it won’t give anything to his ex wife doesn’t give anything to anyone else. So so I knew he had earned that money himself. And, and I couldn’t believe it. I mean, I thought like my 100 grand in the bank was amazing. And way better than everyone else my age. And that that is true. Most people who are 22 years old, don’t earn $100,000. But, but it was nothing compared to 1.8 million, and I wanted to know what he was doing. I wanted to know, I figured this guy knows how to make money. And I want to learn. So I told him, yeah, amen. Let’s do this. And so that’s how I got into it.

Dan LeFebvre  13:50

Yeah, I mean, that makes sense. And it’s very different than the idea that we get in the movie of like, all the bedsheets stacked up and everything like yeah,

David Packouz  13:58

And yeah, my daughter wasn’t even I didn’t even know my girlfriend was pregnant at that, by that. Okay, that happened later. Okay. Yeah, yeah, they shifted the timeline around so that would be more dramatic. Okay.

Dan LeFebvre  14:12

And in the movie since obviously, we know you are real. Speak speaking of a girlfriend in the movie, the character’s name is Iz and then there’s another one that is kind of a big part to the way this is set up. But Ralph Slutsky who is a drycleaner owner and kind of put some money back in to the deals in exchange for 25% of the company. Are they based on real people too?

David Packouz  14:32

They are. My ex girlfriend, Iz is based on my ex wife Sarah. That’s her real name is Sarah. And, yeah, and she didn’t look anything like Anna dharma. So I’m sorry to disappoint everybody. But she was very beautiful. She was but she looked a lot more like Haileybury than, than Ana de Armas. My ex wife Sarah she was half black. Oh, Um, so she she’s a mulata her dad was like a white Spaniard guy and her mom was from Equatorial Guinea area, which is near Nigeria. So, and she did grow up in in Madrid. So she does have the same accent as Ana dharmas. So at least they got that. But, but yeah, but it’s, uh, she looks very different. Just very different skin color, I should say, is the main thing. But Ralph is based on a real guy. In the movie, his name is Ralph Slutsky. And he’s a Jewish drycleaner owner. In real life, he is his name is Ralph in real life. Actually, they didn’t change his first name, but his last name in real life is Meryl. And he is a Mormon machine gun factory owner he doesn’t own any dry cleaners. He owns a machine gun factory out in Utah. And and so that’s how he got connected to EFRAIM through EFRAIM’s dad, actually, EFRAIM’s dad was doing some business and got in contact with this guy and introduced him. And so Ralph was a firm’s first investor. And when EFRAIM one is first federal contract Ralph, finance the contract. And so that’s how they got started.

Dan LeFebvre  16:16

That actually makes a lot more sense than dry cleaner owner. Yeah, being honest to that was like,

David Packouz  16:23

yeah, exactly.

Dan LeFebvre  16:27

Yeah. One of the big the first big contracts that we see happening after you join a why is the movie calls it the Beretta deal. It’s as the movie sets it up. It’s a $600,000 contract sell 5000 Beretta pistols to the US Army in Baghdad during the Iraq War. But then there’s a problem. Of course, there’s always problems that happen in movies. And this happens just before the deal is about to go through through Italy passes some legislation banning arm shipments to Iraq. Berettas are an Italian gun so they can’t be sent directly to Iraq. So instead, in the movie, Efraim has the idea to ship the guns to Iraq’s neighboring country to the West Jordan, and then from there, take them to Baghdad. And another problem pops up when the Jordanian customs sees the shipment because of a permit issue. So then we see Efraim and yourself in the movie fly to Jordan to try to fast track this new permit ends up with the two of you and a local driver named Marlboro actually driving a truckload of Berettas, from Jordan to Baghdad, nearly getting killed in Fallujah in the process. How well does the movie do showing this Beretta deal?

David Packouz  17:37

So the Beretta deal was real. We really did have a Beretta deal, and it really did get stopped by the Italian legislation. However, what Efraim tried to do was not ship it from Jordan to Iraq. He he tried to get the government to take a alternative gun. A I think it was like a Brazilian gun. I think he actually mentioned it in the movie.

Dan LeFebvre  18:04

There’s one line, I think he’s on the phone with the military guy.

David Packouz  18:09

Exactly. Yeah. Yeah. And they rejected it as they did in the movie. But then he didn’t, we did not we didn’t manage to deliver on that. In fact, we defaulted on that contract. So that contract failed. So yeah, we did not deliver that successfully. However, the story of going through the Triangle of Death is real. But it didn’t happen to us. It happened to the screenwriter of the of the word dog screenplay, Steven chin. So Steven chin, who is a, you know, Asian man from California. He, he originally got the he got the job. He got the contract to write the word dog screenplay, because he had written another screenplay prior to that called Iraq, Iraq. And that screenplay, which was never turned into a movie, it was, but it was a well regarded screenplay. It was about another set another two American guys who were government contractors working in Iraq at the time. And this was in 2003. And right after the invasion, and Steven wanted to write the screenplay about them, and he wants to go interview them and see, you know, how they were doing. So, of course, he couldn’t get a commercial flight to Iraq. So he flew to Jordan. And he hired a driver to drive him to Baghdad. And that driver decided to stop in Fallujah to get some free gas because no one was manning the gas stations. And they got shot at by insurgents and made a run for it. And they got saved by the US Army, just like in the movie, so that that story is actually true. It just happened to the screenwriter of a screenplay not to us, and when so when he was writing the screenplay, Todd Phillips, the director, you know, tell So, you know, these guys are just sitting behind desks too much. We need some action in there, you know, why don’t you put your story about getting shot at in Iraq and into the story and and so that’s how that got into the movie.

Dan LeFebvre  20:10

Well, I was gonna ask about in that, like in the movie, of course, maybe it wasn’t you driving through the Triangle of Death, but there was a scene where that happens where your character just kind of reflects on me and six months ago, I was a massage therapist and now I’m driving a truckload of guns through the Iraqi desert was can you kind of give us what your mindset was like in those early months? Like, did you kind of realize this whirlwind of events or things that were happening like the movie seems to imply?

David Packouz  20:39

Yeah, absolutely. I would say that my biggest kind of like, shock or, you know, realization that I was in a very different world was when we were was our first trade show that we went to. So we went to like, just in the movie, they call it in Vegas sex. But in there was a trade show in Vegas called the Shot Show, I believe it’s still going on. But it’s not actually a military focused trade show. It’s it’s more of a commercial hunting, shooting sports trade show. So people gun manufacturers do go to that trade show, but it’s more aimed at the civilian market. Henry, the guy played by by Bradley Cooper didn’t meet us there. We did, we did. But we had known him like well, before that we’d been doing business with him over the phone and by email for like, a good bunch of months before we met him. But we did meet him in person there. So he also attended that trade show. But the the trade show that they that they make it look like is not the Shot Show, they make it look like more of a military trade show and a defense industry trade show. And I believe that they’re basing it more on a trade show, such as Euro Satori, which is based in Paris, and that’s the one we went to first. That was our first military trade show. In Euro Satori in Paris, happens every year. There’s there’s a bunch of these trade shows that happen all over the world. But it really does look like what they portrayed in the movie with like, you know, tanks and, and aircraft and attack helicopters. And pretty much every major arms manufacturer has like a booth there and, and they have outside in the field, they have live demonstrations of like live fire drills with like attack helicopters and tanks, jumping sand dunes and stuff like that. And drones, you know, so they really do have that. And so when I was like walking through that show, and like, I was like, Holy crap, this is like a whole different world than what I’m used to and where I’m where I’m coming from. So that’s when it really hit me. Okay,

Dan LeFebvre  22:47

okay. Well, I’m curious about something. In the movie, the Beretta deal, you said that, that that failed. So maybe things were a little bit different. But in the movie, after that, we see a DUI is expanding nice new offices, more employer employees being hired. And that was kind of confused with how the movie was telling the story here. Because on one hand, we see from in the movies, telling new employees that they have to watch the website all the time for contracts. We also see the employees aren’t really doing any contracts themselves, the movie shows you being the one to find the next big contract the Afghan contract, as it’s called, on the government website. And we’ll talk a little bit more about that in a in a bit. But after the Beretta contract, it sounds like that that fell through was there a big contract that changed to see a why expanding or what were things like after that time?

David Packouz  23:40

So our first really big contract that we won? Well, I should say, after the Beretta deal, was the Afghan contract now, we didn’t actually hire anyone, and we’re even get at office until after we won that contract. So yeah, the timeline is a little off in the movie, but like, before we won the Afghan contract, we were working out of EFRAIM’s apartment. And it was only after we won the $300 million deal that he felt comfortable spending like $2,000 a month on an office. And yeah, I know. And, and so yeah, once we won that deal, he we rented an office and then he started hiring people. And at our peak, we probably had around like 15 people working in the office. And so yeah, I mean, and that by that point, I was just concentrating on working on the Afghan deal and he was getting all the other people in the office to try to get other deals and new deals and and he was also doing some commercial deals like importing ammo for the shooting sports commercial market and getting them to sell it to like gun shops and stuff like that.

Dan LeFebvre  24:54

I want to talk about the the Afghan contract and in the movie, the way that sets up out I’ll talk about how that sets it up. It shows that there’s this big deal for 306 360,000 sniper rifles over a million grenades, 45,000 rockets, 100 million rounds of AK 47 ammunition. And the reason it’s called the Afghan deal is nickname for it because this is all for the US military to rearm the Afghan army. According to the movie, it mentions all those guns and stuff at first, but then it really just kind of focuses on the 100 million rounds of ammo for the rest of the movie. Were you involved in the whole contract? Or was it just the ammo? Can you kind of clarify what your role was in that?

David Packouz  25:36

Yeah, so I was involved in the whole contract. And it was about 30 different it was all munitions, it wasn’t any weapons. It was all munitions. So all the stuff that goes in the weapons. And it was everything from like, as you mentioned, you know, like, it was everything from like Pistol ammo to machine gun ammo to grenades to anti aircraft, rockets, mortar rounds, tank rounds. So there was a pretty much every bit of munitions that an army or police force would need for like the next 30 years was the plan. That was that was what they were going for. And because the Bush administration thought that that, you know, they were very unpopular at the time, and they figured the next president would be a Democrat, which they were right, Obama was next, but they thought that, that the next Democratic president would pull out of Afghanistan immediately, and which they were wrong took until was 2020 Biden pulled out. And, and so their plan was to arm the Afghans for like the next 30 years, so they wouldn’t run out of ammo if they got abandoned by the United States. And so that’s why they had such a large variety and quantity of munitions for this contract. The I was working on the entire thing, and we had sources all over to get it. In fact, the AK 47 Ammo was one of the lowest margin items on on the list. So we were making the least amount of money on that ammo was the most it was the largest quantity and largest logistics challenge because it was high volume, low value. But the grenades were making us way more money. So we and the grenades were brand new manufacturing, I’ve, you know, one of my contacts in Bulgaria was manufacturing, brand new, and they had really, really good prices. And so we were making way more money on the grenades and on the AK 47 ammo and the grenades had no legal issues whatsoever. Because they were brand new, right out of Bulgaria. So So yeah, I mean, I was working on all of it. It was just got focused on the the AK 47 animals because it was the famous logistics issues that we dealt with the whole repackaging situation. Okay,

Dan LeFebvre  27:58

okay. Yeah. And because the impression that I got from the movie because it really only focuses on the ammo, but it also shows like The the Albanian warehouses full of stuff, I was just like, well, maybe they just got all the other stuff from here, too. It was just like a big, everything all in one from these warehouses.

David Packouz  28:15

No, most of the stuff we got that other than the AK 47. And some of the machine gun ammo, the 760 by 54 ammo. We mostly did that was mostly from other places. So it was just really the AK 47 and machine gun ammo, the AKM ammo that we that we got from Albania. And another difference in real life. They didn’t store all that stuff in a warehouse. They stored it underground in these huge, really long bunkers. And Albania. As they mentioned in the movie, it was run by this paranoid dictator for most of the Cold War, who he withdrew from the Soviet Union and the Soviet Union that tends not to like that. So he thought that he would get invaded by the Soviet Union. And because he was a starch, communist, staunch communist, he thought that that the that NATO would invade them too. So he thought he was going to get invaded by the world’s two superpowers, and he’s a tiny little country near Greece. And so he allied himself with the Chinese and got a massive amount of ammo from the Chinese, and weapons and stuff. And that’s how all that ammo ended up being Chinese. And what he did was he built this huge underground network of of bunkers, so that ends and put all the ammo and weapons in there and so that they would be safe from Buckmark bombardment from the air. And his plan was that if he got invaded, the entire population would become soldiers and everyone would fight to the death he called it his plant total war plan. Yeah, that was his plan. So of course the war never came. So after the Cold War ended, all the those weapons and ammo were still in those books. occurs. And by 2007, NATO really wanted to join up. I’m sorry, Albania really wanted to join NATO. And one of NATO’s requirements is that Albania get rid of all their old ammo and weapons. So they were going to have to pay to dismantle all of it, which is going to cost them a lot of money. And so they were thrilled to sell it instead. Because then they make money instead of lose money. And so that’s how we got such an amazing price.

Dan LeFebvre  30:26

We had talked about this a little bit before we you mentioned, Henry Gerard and Vegas accent in the movie, we see how the Afghan deal is going to be completed. It mentions Henry Gerard, Bradley Cooper’s character, and you’re meeting with Gerard at Vegas X. And he says that he’s going to supply all 100 million rounds of ammo for the Afghan deal from that military surplus in Albania. But Gerard can’t bid on the contract himself, because he has been added to the terrorist watchlist by the US government. So basically, he’s going to sell the ammo to AI, who then turns it around and sells it to the US government. And that’s how the movie sets up that. Basically, that was how you’re going to complete the Afghan deal. Was that a pretty good interpretation of how it really happened?

David Packouz  31:10

More or less? I don’t think he was if he was on a terrorist watch list he was on. Like, I don’t know what the official one would term was, but he was like, on a list of concern, so to speak, by by Amnesty International, right. So not by the US government. So Amnesty International, had published some things about him that they suspected him of being involved in the arms trade to Africa, and to some warlords, and obviously, that would be bad. But I don’t think anything was ever proven. And so he was not like, legally. I don’t know exactly why he he never, like registered with the federal government and did any of these things himself, but he was he was dealing with, with quite a few different contractors, it wasn’t just us, he was also selling to other American companies as well. And we just happened to be very competitive with the other items on the contract, not just those items. So we had really good prices on grenades and, and that helped us win. And as well as other things, we just had better an overall package than our competitors. And that’s how we want it wasn’t he wasn’t really the magic bullet that took care of everything. He really just took care of the AK ammo, and the and the machine gun ammo.

Dan LeFebvre  32:35

Okay, because that’s exactly what he seems like is the magic bullet like, Oh, he’s going to, he’s got everything. And he’ll give you everything for you know, for a deal. Yeah.

David Packouz  32:44

I mean, it was an important very important component of the of the contract. But But yeah, it was not as they portrayed in the movie, like a turn key thing where he took care of everything. And, and we didn’t have heat, we only had one supplier. And it was him that that wasn’t the case. He was just the supplier of those items. He gave us quotes for the other items, but he wasn’t competitive on some of those other items. So we got that from other people.

Dan LeFebvre  33:09

Okay, okay. Yeah, that paints a very different picture than the one that I got from watching the movie. Right? Yeah, one thing we do see in the movie is you actually go to Albania to inspect the bullets. And there’s a screen that and then after, after that, we see that you guys bid on the Afghan deal, there’s a screenshot I paused the movie to look at it in Excel. And here we can see the total bid a little over $300 million dollars. And the movie also mentions three separate audits and an in person interview before actually getting the contract. The movie doesn’t really focus on it much. But it does mention that that has to generate you know, years of paperwork or at out why should say has to generate years of paperwork for those audits. Because you I didn’t keep any records. So now that they have these government audits have to do all that. And then basically, while you’re there, you have to go to I think it was Rock Island, Illinois and the movie The once you to actually talk to people, you and EFRAIM go there, kind of get high in the car beforehand, because it’s it’s a very stressful situation. So that’s understandable. But then while you’re there, you find out that you got the contract, but you also undercut the bid by $53 million. So then everyone was all upset. That’s an overview of how the movie shows you why landing that huge Afghan contract. How close to the true story is that? So

David Packouz  34:33

As with everything else is partially true. The we really did have it was I think, like five different audits. One was financial, where they they want to see that we had the money capabilities. One was accounting, they want to see that we had like the record keeping thing and that’s what we had to and we really did. So at From hired an accountant who just had happened to have been in federal prison, right? He just liked to have these guys. And that guy created like years of records by hand. So to make it look like he had been doing the accounting properly for the past few years, and so yeah, that guy, I think it took him like a good like two weeks to do that. So he created the the other records going back. And they they actually sent a group of nice middle aged ladies to our office that they were from the government, they were actually super nice. And we were super nervous because the government is going to come to visit the office, they’re gonna see where a couple of kids and you know, just and so, you know, we both wore suits and, and, you know, we had our, you know, our secretaries looking really busy and stuff, so we would look professional. And of course, everyone’s a real, he’s a real charmer, you know, he can be he’s a very, very personable person. So, he starts joking with them. He’s like, he’s like, like, oh, ladies, you know, I knew that you were, you know, I knew that, you know, over the phone. I could tell you were smart. But I didn’t know you were so beautiful. I mean, you know, if it wasn’t so illegal, like, definitely be buying your diamonds right now. And so they’re all laughing, you know? So he charms them, and they get us actually pretty high marks in that audit. They wanted us to come to the Rock Island Arsenal, which is where the contract was being managed. And Efraim told me is like, hey, you know, we’re a couple of kids, we probably should, it probably would not, might not look too good. So I’m gonna go with Ralph, because Ralph’s an older guy, Ralph’s, like in his 60s. So so I didn’t end up going to that meeting, because everyone wanted Ralph to be there to give him additional legitimacy. I don’t know whether or not he smoked weed. Before going into that meeting. I didn’t ask him, but it wouldn’t surprise me in the least if he did, or even if he snorted a line of cocaine, because he was doing a lot of that back then. So in fact, I’d be surprised if he didn’t snort a line of cocaine before that meeting. But when we did that, we were told that that, that we were $53 million under the next or 52, I don’t remember, under the next bid, but it didn’t happen at that meeting. It actually happened is actually the guy told me, the contracting officer told me over the phone, so and the way it happened was he I’m trying to remember what we were discussing, but we’re discussing something like I was asking him, you know, whether we could do something or other. And he’s like, Yeah, you know, we’re really happy to help you guys out. You guys were just like, you know, so competitive. You know, you guys really kicked ass, you know, of all your competitors. And I was like, really? And he’s like, oh, yeah, you guys were so much lower than everyone else. And I’m like, really? How much lower? And he goes, he’s like, Listen, I’m actually not really allowed to legally tell you this. But since we’re just talking over the phone, I’m gonna deny it If you tell anyone okay, but we’re talking over the phone. I’ll tell you all right. He’s like, you guys were $53 million under the next people. And I was like, holy shit. And so like, I you know, I spend like, well, you know, we’re just trying to get a good, you know, a good deal for the government’s because, you know, we’re, you know, we’re responsible contractors like that. And so of course, I tell that for him, and he was pissed. He was like, throwing things at the wall. He was screaming, he’s like, these motherfuckers could have made $50 million more got that, you know, and he just, like, he was like, he was pissed for like, a whole day. Because of that. He was just like, fuming and fuming. And then, of course, I think that had to do some of it, you know, he started, you know, scheming of all different ways we could like increase the profit margins and, and, and that’s kind of what got us in trouble later, when he when he tried to cut Henry out of the deal. By the way, Henry’s real name was not Henry Gerard it was Henry tau May th o m e t. Tau May. He’s a Swiss guy, and looked very different than Bradley Cooper in the movie in real life. You look more like a clean cut. Swiss banker then. Then the way Bradley Cooper portrayed him.

Dan LeFebvre  39:33

Most of us look different than Bradley Cooper. So yeah, well, I

David Packouz  39:37

mean, Bradley on I think Bradley, I read some interview with him that he was kind of trying to look like more hard ass in that movie. So like, that’s why he’s like all unshaven and he’s got those super thick glasses and like bloodshot eyes. And, you know, so he was kind of trying to do more of like an underground, like criminal kind of vibe. But Henry actually was the opposite of that. He was is very, very clean cut professional never raised his voice about anything very quiet calm and ended every sentence with the word. Okay, for some reason you’d be like so the price for the AK set for the AKs are good. Okay, I can I can, I can supply them by the middle of March. Okay, you know, so it’s like that. Yeah, everything was okay. Okay. Okay. Yeah, exactly everything was like that. And he’s very, very calm, never never raised his voice never screamed or, or went nuts or anything like that, like Bradley does in the movie but but yeah, I mean, he’s, he’s been doing it. Henry has been in the arms business since he was like 18. And he was in his 40s at the time. So he’s one of the most connected people in that business of anyone, particularly in Eastern Europe. But yeah, but he tries to keep as low of a profile as possible for for good reasons. So he’s, there aren’t many pictures of him out there. I think there’s maybe one YouTube video of him giving some speech somewhere. So it’s not like he’s completely anonymous on the internet. But but there, I think that’s the only thing that’s out there as far as you

Dan LeFebvre  41:12

maybe you already answered my next question. But when Efraim gets all upset about losing that, that $50 million. That kind of goes to contrast earlier in the movie when he’s talking about being happy living off crumbs and things that the other big defense contractors didn’t want. And now with this afghan do the movie even pointed out says this is the whole pie. Was there something maybe that the movie doesn’t show? Or was it that 50 missing out on that $50 million that he found out that was kind of like this change in being happy? You know, from going, being happy with the crumbs? Do I want the whole pie?

David Packouz  41:49

Well, I mean, I would say that EFRAIM’s driving force, at all times was greed, I mean, greed and power. I mean, that’s kind of like what he lived off. And he was never happy with a deal. Regardless. I mean, he was not happy with the crumbs, he was always trying to get more crumbs he was always trying to, and the way he worked was that it wasn’t really so much about the money. I’ll give you a story that kind of illustrates his character. When I first started working with him within like, the first two, three weeks, I saw him you know, we worked in the in out of his apartment, right in his living room. And he would always talk on the phone with the with the phone speaker on side hear both sides of the conversation. He I guess he just didn’t like holding the phone up to see or whatever. And I remember seeing him once get on the phone with AT and T and start is, you know, screaming and shouting and stuff, because he felt like he was there was like a $5 charge on his bill that he felt should not have been there. And he kept on insisting you know, they said, Well, you know, they kind of pushed back well, you know, this is our policy, whatever. And he’s like, I want to speak to your manager, you know, and he kept him like, insisting on going up the chain of command. Eventually, I think he got the $5 removed from his bill, but it took him like 45 minutes. Right? And, you know, like, and it was like a whole drama, like he was yelling and screaming and the whole thing. And I told them afterwards, after you hung up, I’d said, you know, EFRAIM, why are you spending so much time and effort on $5 overcharge, you know, you could spend that time making God knows how much money doing pretty much anything else? And you know, why are you wasting your time here. And he goes to me he’s like, it’s the principle of the matter and nobody see nobody. So like to him, you’d like it was is much more of an ego thing than anything. And like I’d seen him like screw someone over through some various tricky means, where the he ruined the guy, the guy was crying on the phone that his business was going to go bankrupt and, and like, you know, his wife is going to leave them and the CEOs kid is sick and whatever. And Efraim eventually used that whole thing in his own schpeel when he tried to convince the government of things but but you know, but this guy seems to be legitimate. and EFRAIM just he just didn’t care and all the only difference to for EFRAIM he was after he hung up the phone with them. keys like well, I just made another 3% on my contract. And I’m like, Oh, you did all that you screw this guy over your ruins and for an extra 3% And it’s like, that’s not going to move the needle for him. You know, he’s not he’s already got millions of dollars in the bank. You know, what’s a few extra $1,000 It’s not going to do anything. But for him it was about winning. That was what it was all about. It wasn’t about the money. It was about winning. I mean, he was he hated spending money. He barely spent it at all, especially in the beginning. Later on. He started spending it when he knew he was going to go to prison. And then he started spending a lot of it. But but in the beginning, he, he like, was very cheap, like he would eat at cheap restaurants. He, you know, like didn’t want to spend like he barely had any clothes. He was driving like a, like a secondhand used car and living in an apartment that was you know, not not terrible, but not nothing compared to what he could afford. So, yeah, I mean, he just had this kind of like sickness that he just needed to, like, have just as much money in his bank account as possible. And it was he wanted to win. And that was that was really what it’s all about.

Dan LeFebvre  45:35

Okay, that’s, again, seems a little different than I think it was after the I think it was after the Beretta deal in the movie where it shows his character and your character in the movie getting like matching portion on elevens or something like that. And he was like, Oh, we got this huge deal. And then, you know, start spending some money. So it seems like he’s okay with spending money.

David Packouz  45:55

Yeah, well, we actually so we didn’t have matching Porsches. But we did. We did both of Audi’s he, it wasn’t they weren’t matching. He had an ace six and I had an a four sided i the less expensive version. But we did have matching Audi’s I guess you could say, and we also did move into the same building. It wasn’t as fancy as they show in the movie, but it was it was a pretty nice condo complex. Yeah.

Dan LeFebvre  46:19

Okay. Okay. So, you know, make it it’s going to be on filming the movie.

David Packouz  46:24

Oh, no, no, no, yeah. The building they show in the movie wasn’t even built at that time. I know what building they’re talking about, in fact, that that apartment, I saw it go on the market and what the marketing they use for it was this was the apartment that was in featured in the film War Dogs. Yeah, that’s how the agent was selling it. Yeah. But yeah, that that building was not it was not even constructed at the time that this story took place.

Dan LeFebvre  46:52

In the movie, it’s your character that goes this go back to Albania to help actually facilitate this deal. And with the logistics of it, I just see a character that notices that all the bullets are Chinese. And that means it can’t be sold to the US government because of an embargo against China. So then EFRAIM comes up, he shows up in Albania. And he has this idea of taking bullets I I worked on the exact number they mentioned in the movie 68,520 wooden crates, and he wants to put them into corrugated fiberboard boxes to help make it cheaper on shipping. And then we see a wise hiring a team of like 50 people to repack the ammo over the course of eight weeks costing $100,000. So there’s no more Chinese label on the outside also saves $3 million in shipping costs going from the wooden crates to the lighter boxes seems like a good deal. Except of course, repacking is not necessarily legal going around that embargo. So how well does the movie do showing the situation with the ammunition for the Afghan deal?

David Packouz  47:55

So it was pretty close? Yeah, I mean, I so I didn’t go to Albania. Yeah, the guy who we so we sent. So we realized that the way it happened was that in early 2007, there was a huge spike in oil prices. And Efraim had not bought any, he didn’t hedge his bets, he didn’t, he didn’t buy any insurance. So to speak a big company, if you have, if you’re really relying on a large transportation contract, you know, like, if you if you’re about to, like, you know, book 100 aircraft loads have to ship something, usually what they do is they buy insurance in order to to counteract the movements of the oil markets, because like the vast majority of the cost of air freight is in oil is in the fuel. And if the oil price significantly moves, then you could your your transportation costs could significantly change, which is what happened. So of course, effort didn’t buy the insurance, because that’s just not how he rolls. And, and so we were kind of stuck in a situation where we could not deliver this ammo at a profit. And so the AK 47, ama from Albania, the grenades, we were able to because there was low volume, high margins. And you know, one aircraft load of grenades was like $3 million worth. And but an aircraft load of ammo was under $300,000, where it says literally 1/10 the price so that the air freight costs change put us underwater on those on the on ammo deal. So I realized, you know, air freight is based on weight, primarily. And so if we could reduce the weight, we could save money and maybe get this section of the contract back into profitability. And I you know, we had gotten pictures from the Albanians of the Alamo and it was all packed in these very heavy looking wooden crates. And so I told Mmm, like, hey, you know, if we remove these crates, the ammo still in these sealed metal tins, they call them sardine cans. We can just ship the sardine cans and and get rid of all this wood and maybe that’ll be enough to make it profitable. And he’s like, Oh, that’s a great idea. But we’ll Yeah, but that’s like a pretty big operation to repackage this stuff. So we need somebody on the ground. He’s like, you know, you just like David, you know, you’re you, I need you here in Miami, because you’re dealing with the government, you’re dealing with all the other suppliers for the other aspects of the contract. I don’t want you to go in anywhere. But let’s get someone else to go there. And so we decided to hire my friend Alex, Alex Paretsky, who was my childhood friend, we’ve known each other since like third grade. And Alex had he’s dual citizen with in, in France, with French France. And he had spent some time in the French military. He speaks English, Spanish and French. So he’s his, you know, three languages. Very smart guy, very, very responsible and capable person. And so I said, Hey, you know, Alex is actually, he had just graduated, he has a master’s degree in international relations. So and he’s a smart guy, military experience, why don’t we hire him? And so EFRAIM hired him put him on salary sent him over to Albania. And we got picked email back from Alex saying, hey, you know, this is the situation with the ammo because he had majored in international relations, he knew that there was an issue with Chinese ammo. And that’s how we found out so so yeah, it wasn’t it wasn’t me. Who was there?

Dan LeFebvre  51:43

And it was seems like it was a lot more complex than the movie shows, which happens with movies.

David Packouz  51:47

Yeah, they have to I mean, they have to simplify. There’s only so much you could put in an hour and a half. I mean, this is this is like two years of of events compressed into an hour and a half. Right,

Dan LeFebvre  51:58

right. And characters to like with with with Alex and you know, just compressing it into okay, you’re the one going because you already been introduced. Exactly.

David Packouz  52:05

That’s what the screenwriter told me. He’s like, you know, we we don’t want to introduce another character here. It’s already you know, well into the movie and, and so just keep the story simple. And that’s why they sent me in the movie. Well,

Dan LeFebvre  52:18

things don’t go so well in the movie. Once EFRAIM finds out that any drive paid two and a half cents per bullet for the Afghan deal. Well, then he then he turned around in charge at y 10 cents per bullet. So the way the movie sets this up, it’s against your characters wishes in the movie Efraim tries to cut Gerard out of the deal. We don’t exactly see how he went about doing that because the movie follows your character in Albania. Well, FGM is in Miami. But we do see the result of it happening. You get kidnapped from the hotel stuffed in the trunk of a car driven to a deserted lot with Gerard threatens you with a gun in your face. That’s the scene the movie actually starts with. And then it comes back near the end of the movie to show that did that actually happen? No.

David Packouz  53:01

Yeah, that that never happened. And neither it didn’t happen to Alex either. I mean, he didn’t get kidnapped either. EFRAIM did try to cut Henry out of the deal if that is true. So and the real numbers were actually that he was buying it from the Albanian Ministry of Defense for two cents around. And he was selling it to us at four cents around. So he was doubling his money. But we were selling it to the US government for 10 and a half cents around. However, this airfreight was costing us I think, like five and a half cents around so we were still pulling in. Then that was after the repackaging. So before the repackaging it was going to cost us like 14 sets around or something like that. And so we were going to lose money. But after the repackaging it was. I mean, in total, before, in in after the repackaging, we were paying, I think about five, five and a half cents of round and shipping costs. So we’re clearing about a center round, which gives it about a 10% profit margin. That was after the repackaging. So yeah, the what happened was, after we got the repackaging going, Alex found this guy named Kosta, the box guy. And it started the repackaging things were going well Efraim decides that he wants to make more profit on this deal, like he does with everything. And so he decides he’s going to try to cut Henry out of the deal and deal directly with the, with the Albanians. And so he tells me, he’s like, he’s like, Okay, I’m going to flat Albania and I’m going to convince them to give us a better price. He’s like, what I want you to do is I want you to take he’s telling me, he’s like, I want you to take all the quotes that you got from from other people from other sources. And I want you to doctored the documents and change it. So it looks like we got much better prices from those other alternative sources. And so he saw I’d do that for a minute. It wasn’t particularly hard to just get a PDF editing program and change the numbers. You know, it wasn’t hard. And print out the documents for him. He goes to Albania. He talks to the lead Albanian guide, Nick I named Philippe Inari. And he’s like, he’s like, look, I have these these other quotes. Alex was telling me this later because Alex was there. He’s like, he’s like, look, I have all these other quotes. You guys gotta give me a credit, better price and and Pienaar, he looks at him. He’s like, those documents are all fake. Don’t show me your fake documents. He knew right away, he knew right away. He didn’t even like look at it. He was like, he’s like, I know, you’re foolish, you know? And so he refused to give him another a better price. And eventually, you know, everyone kept on bugging him. Eventually Pienaar, he’s like, Okay, fine. You know, I’ll tell you what, I’ll make a meeting with the guy who can make this decision. And so he sets up a meeting with a guy named Billy Yorkie, who we found out later turns out to be part of the Albanian mob. And this meeting took place in this, this construction zone, it was like a building that was under construction. And they go into the construction zone. And then like they opened the door and suddenly, it’s like a beautifully furnished office, like out of like Wall Street. And, and there’s the Albanian Gaya, dill Yorkie at this table. And, and Alex told me that the second Diveroli walks into this meeting, he immediately got quiet, because diversity is a very brash and loud person always talking and always kind of like, you know, joking around and kind of, and he also bullies people. He, you know, he’s a big talker. But Alex told me that, you know, the second he walked into this office and saw this guy, he knew that he couldn’t do that with this guy, you know this with this mobster. He got really quiet and very respectful, which is very out of character for him. And the Albanian says, Look, I know that you want better price, but we can’t give you better price. But we know that you are repackaging ammo, and you pay this men to repackage ammo, and why don’t you give this contract for repack to us, we make money and repack and then I give you a better price because we make more money from repack. And they were always like, yeah, that sounds like a great idea. Sure. That guy’s fired. You’re Hired, you know. And, and Costa Of course, got really upset about that, because he got taken off the contract. And he calls me up and he’s like, Hey, listen, you know, I get it. It’s business. You got to go with the person who gives you the better price. I understand. But can you at least by my extra boxes from me because I have I made a whole bunch of boxes for you guys for this contract. But now you’re kicking me off the contract. I am stuck with $20,000 worth of boxes. So you’re going to need these boxes anyway. Why don’t you buy it from me? And I said, okay, yeah, that’s very reasonable. I you know, appreciate you being you know, cool about this. And so I call it that from like a f from you know, why don’t we just buy these boxes from Costa and everyone’s like, yeah, yeah, okay, no problem. I’ll do it. I’ll do it. Okay, yeah. Tell them I’ll do it. So I tell Costa Yeah, he’s gonna do week goes by Costa Causton facts like Hey, I from hasn’t bought the bus. I call him like, Efrain by the system. You’re like, Yeah, I’m gonna doesn’t do it right. A third time that he calls me up. He’s like, I still like like, I really need you to guys to buy these boxes, and EFRAIM’s like, yeah, you know, I talked to dilla Yorkie and they don’t want to deal with them. So, you know, just let it he can keep the boxes we don’t need. And I’m like, Efraim just pay the guy. He knows everything. You know, he’s knows why we’re repackaging the ammo, you know, he can, he can destroy us. And he’s like, yeah, that guy’s not going to do. Don’t worry about him. You know, of course, that was the big mistake. And that guy did do something. He called up the the Feds and told them what we were doing. And he called up the New York Times and told them what we were doing. And his biggest mistake was that he called up the Albanian press and told them that that, that the Albanian politicians were getting kickbacks from this deal, which we didn’t know whether it was true or not. But we assume that’s probably how Henry got such a good price. And also probably why the Albanians refused to cut Henry out of the deal. Even though Efraim asked them because they were getting their kickbacks from Henry. Now, we didn’t have proof of this. Henry never admitted this to us because it is illegal to bribe foreign officials. Even if it’s not your own country, you can get arrested in the United States for bribing a foreign official. So it’s probably a good thing. We didn’t know about it. But and Henry didn’t. We didn’t ask and Henry didn’t tell. But we but we we assume that’s probably what was happening in retrospect. So yeah, eventually, so a few weeks after he He told the Albanian press that he ended up dead, the box guy. So it was the box guy that ended up getting killed, not the driver, there was no driver in, you know, in the movie, it’s the driver that gets killed for some try to scare us or something. That’s not what happened. There was no driver, there was just the box guy got killed. And that was because he ran his mouth to the Albanian press. And, you know, the powerful people in Albania didn’t want someone claiming that they’re corrupt. Because corruption is like the number one political issue in Albania. It’s a huge problem over there.

Dan LeFebvre  1:00:34

Well, for your storyline, as far as you know, the end of the movie, we see things very quickly dissolve you were in Albania with with the whole getting kidnapped scene. But then after that, you head back to a wise office demand your percentage of the Afghan deal about $4 million, according to the movie, you also want to leave the company. But the contract wasn’t completed yet. So EFRAIM’s like, I don’t have that money to pay you right now. And then your character in the movie says, Well, I’m willing to accept you kind of negotiate and when do you know 40 cents on the dollar, like 1.6 million. We also see, the movie makes a point of this written contract of a 7030 partnership between you and EFRAIM. And then it just mysteriously disappears from your desk drawer. The movie doesn’t show it but we saw it from looking at it while you were in Albania. So very heavily implies that he took that. And then later with there’s the box guy thing and then also we see Ralph Slutsky mediating a talk between your character and air from, from offense, like $200,000 Split up over the next four years, partly the amount owed. And so in a fit of rage, your character then tells Ralph about the repacking the Chinese Mo and Albania, something he didn’t know about. And then everything is just a whirlwind at the end. All of this really could be expanded a lot more in the movie, I’m sure but it happens so quickly. Because we find out that Ralph was wearing a wire, we find out that the box guy in Albania never got paid. And so he called the Pentagon, which oversimplification based on what you’re saying there, but basically, that’s how the movie shows you and from getting arrested, it seemed like a whirlwind ending to me, that was like just a few minutes of movie time. Seems to me that you’re wrapping everything up in the movie. Yeah,

David Packouz  1:02:16

they had to wrap it up. I mean, that was changed dramatically of how it happens. So yeah, I mean, I as I said, I didn’t go to Albania. So I was still in Miami. Uh, once we, I think it was about a few months after the whole repackaging situation happened and effort went to Albania to negotiate he made this new deal with the Albanian mob and, and started getting them to do the repackaging. And so things were starting to, like we’re starting to fly like three aircraft loads a week of this ammo into out into Afghanistan. And, and that was on top of all the other stuff. So this is like from Albania, we also had a grid like aircraft coming from Bulgaria, every one to two weeks with grenades and from various from Hungary and from various other places. And things were starting to really go smoothly and, and it was just really a matter of management, managing the contract, making sure all the documents were in the right place at the right time, etc. And so this was like the first time in many, many months that I was able to have like a breather, you know, it was like, I wasn’t working 18 hour days, like I was for the last like five months. And so I started coming into the office less, right? Because I didn’t need to. And so one day, the contract was going well, everything was going well. Efraim comes into my office, it was late in the day, because I was staying there late because I had to make some calls to overseas. And he comes everyone else in the office was gone for the day. And he walks into my office, and he’s like, hey, you know, a lot of the guys around the office are telling me that you’re not pulling your weight around here anymore. And I’m like, What are you talking about? Who’s saying that? Right? Because I was good. I was on great terms with everyone with all our employees, I was known as the nice boss. And he was known as the asshole. Right? So like, everyone would come to me and complain about him. Right? So I was like, there’s no way they’re talking behind my back to this guy. There’s this there’s not a single person in the office who would do that. And so I’m like, who’s saying that? You know, and he’s like, it doesn’t matter who’s saying it. Don’t worry about that. But you know, the thing is, you’re not really helped. You’re not You’re not pulling your weight. I’m like, What are you talking about with the cont the Afghan contract is going great. We’re delivering on consistent basis. The government is thrilled the money’s coming in. And he’s like, Yeah, I know, the Afghan contracts going great, but like, you know, was really struggling with the Iraq contract and you’re not helping with that. And I said, but I’m not part of that contract. I’m working on commission only here, right? I’m not I don’t have a salary, I’m not responsible for every contract the company does. And he says, Yeah, but you know, if if those contracts fail, the company could go under, and then that takes your afghan contract with it. And I said to him, Well, in that case, you want me to be you want me to like work on everything, you, you want to give me a piece of the company? And he’s like, Oh, well, you know, I wouldn’t usually offer this to anybody, but you’re my best friend. And you’re the only guy I would even consider doing this for, you know, so why don’t we do this, I’ll give you a very generous $100,000 a year salary as an executive v y. And you get 1% of the company. And I said, 1% of the company, I mean, 90% of the company’s profits, for the next two years minimum is going to be the Afghan contract. And you owe me actually 25%, not 30, you owe me 25% of that, of that contract. So I think I’ll stick with my 25% of the 90% of the money, then 1% Of all the of 100% of money. And he’s like, he’s like, Well, you know, that’s just not going to work. We can’t do that. And I said, Well, I mean, we have an agreement. And he’s and he says, Well, you could take it or leave it, how about zero. And I said, Okay, if that’s how it’s gonna be, I’ll see you in court, you piece of shit. And I walked out. And I was extremely tempted to punch him in the face. And, you know, it’s just like, the smug look on his face. And I was obvious I so he hadn’t paid me anything until this point, because all the money that we had made in previous contracts together, he rolled into the next contract, because the way he put it, what he was like, hey, you know, I’m using my own money to finance this deal. As you make money, it’s only fair that you use your money to finance the deal to, you know, to the best of your ability. And I was like, okay, you know, I mean, I guess that kind of makes sense. You know, I mean, it’s not that much money comparatively, but you know, so I agreed to do that. But because of that, I didn’t have a penny from all the work that we had done in the last two years. And I had been living off my savings that 100 grand was down to 30 grand at this point. So and dwindling fast. And at this point, my daughter was, like six months old. And so I had, I had a kid to support. And so it was, I went from thinking I was going to be very shortly going to be a multimillionaire, to about to go literally bankrupt. And, you know, going down to zero. So it was a huge, huge shock and a huge, like, blow. And I was like, depressed for weeks after that. It was one of the hardest times in my life, because I was just didn’t know what to do. I was like, I got to get a lawyer, but the lawyer needs to get paid, and I don’t have money to pay a lawyer and, and all this stuff. And I was like, is he just gonna, like, walk away and get away with this. And eventually, my, one of my dad’s good friends, was a very high powered lawyer and agreed to take on my case, and started negotiating with him. And we we negotiated. to, like, we did go, he owed me about $5 million, it was about 5 million that he owed me, and we negotiated, and he was willing to give me 300,000. And obviously, that’s ridiculous. But at this point, I was like, you know, what, 300 if, rather than going through a lawsuit, which could take years and who knows if I’ll ever end up collecting, because who knows, this guy could end up dead, he the way he does business, he could end up bankrupt the way he could end up in prison. I mean, that’s all those are all very good possibilities. So better to have $300,000 now than maybe nothing later. And so I agreed to it, just to be able to have something so I wouldn’t go bankrupt and be able to support my kid and move on with my life and start a new a new chapter in my life. And we’re about to sign the contract to get to do that agreement. And the day we were supposed to sign the contract, I get a phone call from one of the secretaries at the office. And she tells me, Hey, I just wanted you to know, I hadn’t been working at the office for two months at this point. This is two months later, and I want you to know that. But I was still on good terms with all the all the employees, you know, so she called me up. She didn’t have to, but she called me up and she’s like, I want you to know that the federal agents just raided the office. And they told everyone to step away from their computers and get out of the office and, and they’re collecting everyone’s computers and all the filing cabinets. They’re boxing everything up. So just want you to know, and I was like, Holy crap, you know, the shoe has dropped. We’re, we’re screwed. And so I call up Alex who’s Well in Albania, and you know, Alex is my best friend. And so I tell him Hey, Alex, you know, I just want you to let you know that, that, you know, the Feds raided the office. And he’s like, what? It’s like, he’s like, why? Because like in Alex’s mind, it wasn’t even necessarily illegal what we were doing, right, because we, I mean, yes, there was an embargo against Chinese ammo. But the ammo that we were buying from Albania had been given to the Albanians in the 70s, before 1989, which was when the embargo was put in place. So it was actually legal when they gave it to the Albanians. And so you can buy Chinese ammo legally in the United States or Chinese weapon legally, as long as it’s imported before it was made illegal before the embargo. So technically, as far as the embargo was concerned, this ammo was legal. However, our contract with the US our commercial contract with the US Army specifically stated, no Chinese ammunition can be delivered either directly or indirectly under this contract. So so that was the so that, because now it was they put that in there because of the embargo. But they didn’t actually mentioned the embargo anywhere in the contract. It just says no Chinese mo period. So we figured, oh, this is probably just a violation of our commercial contract terms, which is not necessarily criminal, right? It’s just a commercial, it’s a breach of contract really, is what it was. And so in Alex’s mind, you know, he was like, Well, you know, I mean, it’s a might be a breach of contract. But that’s a firm’s problem. He owns the business. I’m just an employee, he could deal with the lawsuit or whatever the army wants to, if they even care, right, which they really didn’t.

David Packouz  1:11:44

Until, until they had to that is, and so, so out, but then he realized, hey, the feds are raiding the office. So he calls up. So he’s like, Okay, let me see what’s going on. He calls up the office. He calls up Danny, Danny is the guy who Efraim replaced me with after I left. And so he calls up Danny, and he says, Hey, Danny, I need you know, these documents to Ford. There’s an aircraft landing in a couple hours, I really need these documents in order to take care of the export permit. Can you get me these documents? Because he knew that everyone had been forced out of the office by the feds. So he’s like, I need these documents, just to see what would happen. So Danny t here’s the Alex told me this later. Alex, here’s Danny cover the mouthpiece of his phone, and whisper to EFRAIM Hey, hey, Everett’s It’s Alex. He, he won’t he needs these documents, or what should I tell him? And he hears EFRAIM going? Oh, well, we can’t get this document. Now. The feds are there. So why don’t you tell them that? Yeah, there was a bomb threat? Yeah, tell him there was a bomb threat at the office. And so we all had to leave. And so we can’t get them the documents now. But we’ll get it to him in a few hours. Okay. Yeah, tell him there’s a bomb threat. And so Danny gets back on the phone. He’s like, Yeah, there was a bomb threat. So we’ll have to give that to you later. And Alex’s thinking, why is that from lying to me? Right? Why doesn’t he tell me the truth. Maybe he’s planning on blaming me for everything. I’m making me me be the fall guy. I mean, I’m the guy on the ground. I’m supervising the repackaging operation EFRAIM’s going to claim he didn’t know anything about this, and this is all my fault. I’m not going to take the fall for this mother. You know, so he’s on the next plane back to the United States. And then I get a call from the federal agents. And they say to me, they’re like, hey, you know, we interviewed some of the other employees at the, you know, at your company, and they said that you had left on bad terms, we would love to talk to you. So, of course, I call up, you know, I hire a defense attorney, a criminal defense attorney, and I say, What should I do? Should I talk to the Feds or not? And my defense attorney says, well, first thing you have to do is you have to go through your emails and your text messages and search for all the keywords of all the things that you think you did wrong. And, and see see what kind of evidence there is see what kind of things they’re working with here. So I I, you know, searched in my email I searched for Chinese ammunition repack, and it turns out, there was quite a lot of evidence there was there was direct emails from you know, F from to Alex with me copied on it saying, Make sure you remove all the Chinese documents from inside the thing. We can’t have any Chinese markings, you know, like it was very, very blatant. And so I realized, well, they’ve already got all the evidence, you know, so there’s no way we can deny that we were doing what we were doing. And I told my lawyer then my lawyers will look if the evidence is rock solid, then your best bet is to just cooperate you can’t you can’t fight them, you know, because they are they’re gonna you if you fight them, you’re gonna get destroyed. And And anyway, do you have a few $100,000 to A good defense attorney for your for your case. And like no, I don’t I have less than 30 grand to my name, he’s like, Well, in that case, it’s not even a choice. You don’t you can’t even even if you were innocent, you could defend yourself. So. So and and he’s like, and you know, you’re not innocent, so just, you know, come clean, and hopefully it won’t be too bad. And so I, you know, we set up a meeting with the feds. And they, they the way the way they work is they tell they tell you, they interviewed Alex and me separately, of course, but they tell they, you know, so they can verify our stories against each other. And they tell me, you know, it’s like, this is the way it works. If you’re going to cooperate, you’re in 100%, there’s no half cooperating, you tell us everything. And if we find out that it was like, you know, if you cooperate and you do everything, well, we’re gonna go eat, we’re gonna go as easy as we can on you will tell the judge to go easy, and you’re, in fact, we don’t even plan to charge you, you know, we’re not even gonna bring charges against you, you’re just gonna be a witness, you didn’t benefit financially from this. So, you know, we see no reason to make you a target of this investigation. But if you lie to us, or if you leave anything out, right, and if you omit any information that we know, you know, and we can we think that you’re hiding it from us, your deal isn’t valid, and then we go hard after you and we’ll try to do as hard as we can. Right? And so I was like, Okay, I’m sufficiently scared. You know, let’s, let’s do this interview. And I told them everything I knew. And at the end of them at the end of the interview there, they like both, just so you know, because I ended the whole interview with the whole issue with the Chinese ammo. And I was like, oh, that’s the main most serious thing I can think of that what we’re doing is so Chinese ammo thing. And they’re like, you know, just, uh, you know, we knew about the Chinese ammo, because when we raided the office, we found a to do list on efforts desk in his handwriting. And one of the items in the To Do Lists was repackaged Chinese ammo, Albania. It’s pretty obvious. Yeah. So it was, so he’s like, yeah, he’s like, we knew about that, you know? So. So anyway, after that. So they told us, okay, you know, you gave us all the info, that’s fine. We’re still not sure what we’re doing about this case, we’ll do our best not to charge we don’t think that you deserve to be charged or not a target. So I’m, like, great. So I, so you know, I start, I set up my own company, to do government contracting, I figured, you know, if I, if I know this business, I might as well do it. As soon as the Feds raided the office, my lawyer says you can’t take a penny from Efraim, you know, this deal is done, you know, until all the legal issues are resolved. Because the last thing you want is for it to look like he’s paying you off to keep quiet. So. So you know, so that destroyed that. And so I had to, I had to get a job, you know, but I also started, I worked I got a job at a food bank.

Dan LeFebvre  1:17:59

So this is before he got that 320,000 that you already agreed to then?

David Packouz  1:18:03

Yes, exactly. I didn’t get I still didn’t get a penny for him, okay. And then my lawyer says you can’t take anything from him until all legal issues are resolved. And so I had to get a job. Because, you know, I was quickly running out of money. And, and I started my own company on the side, and it was working on winning government contracts. And about six months later, we, you know, we hadn’t heard from the agents and months, you know, I figured out that maybe they’re not going to do anything about this investigation. Maybe they’re just going to let it slide. I mean, who knows, you know, they’re just not doing anything. So, about six months later, I get a phone call. And it’s a New York Times reporter. And he says this guy named CJ shivers. And he says, Hey, we are investigating the story about EY delivering Chinese ammunition to the US Army in Afghanistan. He’s like, Do you have any comments on that? And so I quickly hang up the phone. And I call up my lawyer, and I tell him, Hey, I just got a call from the New York Times. What should I do? And my lawyer says, absolutely don’t talk to any reporters ever. Don’t talk to any reporters, you know, we That’s the worst thing you can do. So I said, Okay, I want to talk to any reporters. About a week later. The New York Times publishes a front page article, and it has my mug shot and EFRAIM’s mug shot side by side on the front page that the New York Times next to a picture of rusty looking ammunition. And they are in the New York Times article said that we were delivering all the ammo we were delivering was rusty and low quality and, and we were and it was dangerous. And we were putting our Afghan allies in danger by delivering this low quality stuff. And it just proves how incompetent the Bush administration was because they give a couple of 20 year olds this enormous contract and look what happened etc, etc. You Now, in reality, that ammo that they had on the cover of The New York Times was not even the Chinese ammo. It was Bulgarian ammo. And there was only about 30,000 rounds of ammo. We’re talking about of like 150,030,000 rounds of ammo that this that that, that this stuff was. And the reason the reason it got there was because Efraim had found this, this ammo in Bulgaria at a super, super, super cheap price. And it wasn’t really it was such a small quantity of ammo, it wasn’t really worth flying there to inspect it. And we already had extra room on the plane coming out of Bulgaria because we had a grenade shipment. So his thinking was, you know, roll the dice or buy the stuff, stick it on the aircraft is that if the government inspects it and accepts it great, we just made it great profit margin. Because this stuff is so cheap, if they reject it, no big deal. It’s super cheap anyway. And so the government inspected it, and of course, it was junk. And so they rejected it. They didn’t pay us for it. But of course, Afghanistan has no ammunition recycling facilities, so they had nowhere to put it. And so they put it to the side of the airport. And when the New York Times came to investigate, and they started asking questions about us, someone pointed out that ammo, they’re like, oh, yeah, that’s some of the ammo a wide delivered. And so of course, that’s where the picture came from. And the implication by the New York Times was that all the ammo we were delivering was this low quality stuff, which was not the case. The government was very happy with the quality of the ammo, they issued it to the Afghan allies. And, and it was used. So after that New York Times article came out, suddenly, the the Army made a statement, you know, we had no idea any of this was happening. We’re going to we’re going to remove this car, we’re going to take this contract away from a why and put it out for open bid on the market again, and, and the Justice Department one week later, decided that they they were going to charge us with fraud for defrauding the United States by lying that it was Chinese that it was not Chinese ammunition while it was Chinese ammunition now during the legal Fallout, so actually, so Ralph was portrayed very wrongly in the movie because he was the only guy who didn’t plead guilty. So I pled guilty. To Alex pled guilty, Efraim eventually pled guilty as well, because he knew there was just no way to avoid it. And but Ralph decided that he was going to fight it in court. So actually pretty much the opposite of what they show in the movie in the movie. He’s, he’s wearing a wire and trying to entrap that from in me, you know, but like, that’s not actually it’s actually the opposite. Ralph fought them in court. And he ended up losing, he actually had to go to trial twice, because the first trial was a hung jury. And then they had to do it again. And he got convicted on the second trial. And he, you know, he claimed he had nothing to do with it, he had no idea but unfortunately for him, there was a whole bunch of email evidence stating otherwise. In fact, there was an email from him with detailed instructions of how to erase Chinese markings from wooden crates. And he even had like, like pictures of like, how it would be done with like a wood sander. You know, there was really solid evidence against tutorial on how to do this. For real. I mean, he literally, that was one of the evidence, emails they used in court. And I mean, I think it was a big mistake on his part to fight them. He ended up losing, he ended up serving four years in prison. And but what if he had pled guilty, you probably would have gotten just, you know, probation or house arrest, which is what I ended up getting. So yeah, I mean, the way the way it worked was so while during the trial during the trial, it came out in court, that that the army was informed immediately by the Justice Department right after that raid about what was happening. They were informed there was an email going from the Justice Department to the to the army, saying, hey, this ammo you’re taking delivery on this contract is originally Chinese, you should know that. You know, perhaps you should stop taking delivery of that ammo, and the army responded to them. This all came out in court, these emails, the army responded to them saying the the, the this ammo is critical to the mission in Afghanistan. And if you want us to stop taking delivery on it, we’re going to need a letter instructing us to do so from the Attorney General of the United States. And the Attorney General of the United States, who was the head of the Justice Department never sent that letter. So for what reason we don’t know but he never sent the letter. So the army kept on taking delivery of the Afghan of the of the Chinese ammo from Albania. Well, after they found out it was Chinese for For the next six months, they took deliver, they kept on taking delivery for six months after they found out. And then as soon as the New York Times article comes out one week later, they’re like, oh, we have no idea. We had no idea. Of course, they knew the whole time, and they didn’t really care. It was they were getting good quality ammo at the best possible price. And that’s what they wanted. It was only the New York Times forced them into it, because it became a huge political scandal. So when they decided to charge us the way, the way they worked was they said, they said to me, and Alex, Hey, guys, you know, we know that we told you that, that we weren’t going to charge you, right? Unfortunately, we think you guys were just too involved in the whole in the whole scheme. So we can’t charge effort without charging you too. We’re very sorry. But you know, keep on cooperating. And we’ll ask the judge to go as easy as possible on and, and, and these are your options, you know, the way they put it was you guys delivered 71 aircraft loads of this Chinese ammo. And each aircraft that you delivered, had a document that went along with the shipment called a Certificate of conformance. And the certificate of conformance had listed on it the type of ammunition that was in the plane, the quantity of ammunition, the year of manufacture, and the place of origin. And in place of origin, we put Albania and EFRAIM signed the document, and I submitted it to the government and the and they said in you guys knew that this was false, you knew that the original price place of origin was China. And not only did you know, but you had this whole elaborate Apple operation to disguise that fact. And therefore, we consider each document that you submit an act of fraud. And you did this 71 times so that 71 acts of fraud, and each act of fraud can give you up to five years in prison. So potentially, you’re looking at a 355 year sentence. And so I was like holy shit, I can spend the rest of my life in prison. And then they’re like, but if you plead guilty, we have the leeway as prosecutors to combine all these 71 acts of fraud into one act of fraud. So the max you you’ll be able to get is five years in prison. And because you’re cooperating and you pled guilty, will tell the judge to give you the low end of the guidelines. So maybe we’ll do a year in prison, maybe you’ll do nothing, you know, we’ll you know, maybe just probation. And so that was the choice, either the rest of your life in prison, or maybe nothing, but as long as you plead guilty. And so of course, I mean, with those kinds of choices, we pled guilty, all three, three of us pled guilty, and Efraim probably would have gotten so I ended up getting sentenced to seven months of house arrest, which was a huge relief. I thought he was gonna get like a decade or two in prison and, and ended up just getting seven months of house arrest and do any prison time. I’m extremely grateful for that

David Packouz  1:28:06

effort and probably would have gotten somewhere in the same neighborhood maybe a little more, but you know, nothing too crazy. But he while he was awaiting sentencing. So it was a three year period from when the New York Times article came out until we got sentenced. And the reason it was so long was because Ralph decided to take it to trial. And then they had to do the whole trial preparation, and then the trial and he had a hung jury is that to do another trial. And and so that’s why it’s stretched out to like three years. But during that that period, we were out on bond, right? So we had to go down to the courthouse, they arrested us for like a few hours. And then we had to post bail and so but part of the bond agreement is that you can’t leave the district you can’t leave South Florida. And they also told us you guys can’t do any business in this industry. You can’t do any business in the in the the defense industry, and which really sucked because I was about to win my first multimillion dollar contract. I was like literally again one day away from I was in the final stages of getting this contract awarded to me I was gonna make like a million dollar 1.5 million and a half a million and a half on it. And the day that I was about to like, get the contract awarded, The New York Times article came out. And so then the army put that contract on hold and eventually cancelled it because of the pending illegal issues. So yeah, so once again, I was so close to making a lot of money and it was just snatched away from under me. And so of course you know, I couldn’t we couldn’t be in that business. And but Efraim, of course being from decided that he’s going to stay in the business just do that do the business under someone else’s name. So he got a new guy I had already screwed over Danny and the guy he replaced Danny with, he just went through people, you know, one after another. And he had a new guy that he was going to work with. And he registered a company under that guy’s name and started doing deals under that company. And eventually, he tried to do a deal with someone in with a knight industries, I think it was, it was based in like Central Florida, and EFRAIM’s, like such a control freak that when it came down to negotiating the details of the business, he couldn’t let his friend who was the frontman do the talking, he insisted on getting on the phone himself, and doing the negotiations himself. So he, so the guy eventually finds out who he is, and Google’s him and realizes that this guy’s got, you know, he’s already pled guilty to this, and he’s probably, you know, it’s pending sentencing. And so the guy who’s talking to is prob, I assume, was thinking, well, he’s probably trying to entrap me into something in order to get his sentence reduced. So the gun dealer who he’s talking to, calls up the ATF, right? The alcohol, tobacco firearms administration, who’s in charge of regulating guns. And he tells them about what’s going on. And the ATF tells him, Oh, that’s really interesting. Why don’t you introduce one of our undercover agents as your business partner. And so he introduces the undercover agent, the undercover agent insists the EFRAIM come up to Orlando to do to shake hands to meet in person to do this deal, knowing that Efrain was not legally allowed to leave South Florida. So Efraim agrees to come up to Orlando. And the agent tells him, hey, you know, why don’t you bring some of your hand guns with you? You know, because he knew that effort, you know, as as a as a convicted felon, you’re not allowed to be in possession of a firearm, that’s a felony, you can get up to 10 years in prison for that. So the agent is like, why don’t you bring up some of your handguns, we’ll go shooting at the range. and EFRAIM tells him he’s like, look, you know, I can’t be in possession of a gun. I already pled guilty, you know, so don’t ask, I can’t I can’t bring anything. I’m not gonna bring anything. He’s like, Yeah, come on, come on. Let’s do it. Let’s do it. And he’s like, no, no, he’s like, stop doing this. You’re gonna ruin the deal. You know, don’t don’t keep insisting I bring guns to the meeting. And he’s like, okay, fine, fine. Just come to the meeting. Comes goes up there. The agent, the undercover agent, you know, shakes his hand, he’s like, hey, you know, it’s like, Hey, I didn’t know you didn’t bring any guns. But check this out. I just bought this latest HK handgun is the latest cool thing on the market. Check this out. and EFRAIM is like, oh, yeah, heard about that. That’s super, super cool. Oh, I’m so glad you brought that is like, he’s like, let me see that thing. And he picks up the gun. And he’s like, Oh, I gotta shoot this thing. Let’s go to the range and pop off a few rounds. It’s like goes, What can I say, you know, I mean, once a gun runner, always a gun runner, am I right? And the agent slaps cuffs on him, and he’s like, you’re a felon in possession of a firearm, you’re under arrest. And so he got arrested for that. And he could have gotten 10 years in prison for that one thing, plus an additional five years for the fraud charge, which he had pled guilty to. He hired the best attorneys in Miami spent like $2 million on attorneys. And got it negotiated down to four years. So he ended up serving four years in prison. And now he’s out and about screwing people left and right as he usually does, he I every once in a while someone contacts me. It’s like, oh, I just got I just got screwed over by effort. I tried to do this deal. And now I have to sue him like, yeah, you you’ve got yourself into that you didn’t know that you didn’t know that about him before you got into business with this guy, you know, so he’s still hips, old self is still doing deals. I heard that, that currently, he’s mostly involved in funding lawsuits, because he so many people have sued him and he sued so many people that he’s really well versed in the, in the legal system. So So now he’s in business of funding lawsuits, and I’m sure he takes 90% of the money and probably 100% When all is said and done, because that’s just how he rolls. But yeah, I mean, that’s that’s that’s how that ended. But for me, it’s it actually was a huge blessing. Because while I was under house arrest, it house arrest actually set me up for the business on it, which which is a really amazing turn of events. Because while I was under house arrest, I was obviously I had like the ankle tracking thing. And if I like once left my apartment to go throw the trash down the garbage chute and I get a very angry phone call from like my, my probation officer, you latitude and so that you’re not allowed to be out of you know. And so anyway, I was you know, at home bored, and I’m a musician I play guitar, I’m a singer as well and, and I was playing a lot of music to pass the time inviting my musician friends over, it is not like a COVID lockdown, you can have people visit you, you know. So it’s not so bad, definitely has a million times better than prison. And,

David Packouz  1:35:22

and so I invite my friends over. But of course, you know, none of my drummer friends were going to bring their drum set. So because that’s a huge pain in the butt to move and I was living in a small apartment, it would, my neighbors wouldn’t have been happy about it either. So I bought a, a drum machine, which is an electronic device, it goes on the table and has a bunch of buttons on it, you can make different drum sounds with it and make a beat out of those sounds and play it back in a loop so that you can play your guitar to it. And so I did that. But every time I wanted the beat to change, I had to stop playing my guitar, press a button on the machine to change the beat and go back to playing my guitar. And it just interrupted the flow of the music. And so I thought, Man, I really need this drum machine in like a pedal format. So I could use my foot to change the beat and not have to stop playing my guitar. If I was sure someone made something like this, so I went online to look for it, but couldn’t find anything like it. And so I asked my musician, friends if they’d seen anything like it. And they they said all of them said like, I haven’t seen anything like that. But let me know when you find it because that sounds super cool. I want one too. And so I figured, well, if everyone wants it, nobody’s making it. This is you know, this is a huge opportunity. So it took me eventually it took me three years. But I had it made it was it’s a product called Beat buddy like your buddy that plays the beat, you can Google it one word beat buddy. And it’s the world’s first guitar pedal drum machine that allows you to control a beat hands free while you play. And you can be a one man band. So it’s a lot and it has, you can do that for the musicians in the audience. You could do drum fills by tapping the pedal, you hold the pedal down, it does a transition fill, you let go it goes to the next beat. So you can you can control the Beat LIVE while you’re playing. You could also add your own beats on it with comes with software, you could add your own drum sets to make different sounds. So it’s a pretty complex device. I mean complex in I should say sophisticated, but simple to use. And we won. I of course, I had no money to do this, I was completely broke from paying all my lawyers to keep me out of prison. So I launched a crowdfunding campaign for it. And I’m extremely lucky the crowdfunding campaign did really well raise $350,000 In one month, it would became like a record breaking campaign in the music world. And that launched my company singular sound. And since then, come out with six other music related products. For the musicians in the audience, I’ve mentioned what they are, because no one else will know what I’m talking about. But it we have the world’s most advanced Looper pedal, it’s called the aero sleep studio, we have the world’s most versatile and easy to use MIDI controller called the MIDI Maestro cable management device called the Keightley. You can find it all in singular sound.com. It’s all if I do say so myself brilliant products that musicians will really enjoy the one issue. So about five years ago. My brother and I, who helped me my brother, I got into business with my brother when I started singular sound. And you know, I figured I you know, I’m done with these nasty partners, I need someone I could absolutely trust with my life. And so I started that business with my brother. But one thing we were always complaining about to each other anyway, is that the music business the I should say the musical instrument business, which is you know, the business aimed at musicians is relatively small, because it’s only like maybe 10% of the population would consider themselves musicians. And we make, you know, high end products. So only a portion of those musicians can afford our products and are interested in our products. So it’s a very niche market that we’ve done very well I’m not complaining, you know, we’ve won a whole bunch of awards, I’ve got to meet very famous rock stars who I admire who use my products and that’s super cool. And, and so yeah, and I’ve made literally millions of dollars from this company. I’m not really not complaining, but there is a limit to how much a company like that can grow. And so we were always thinking we need to come up with a product that is relevant to the to the general market, not to the musician market, we need something that anyone can use. And so one day we were hanging out at my house and we’re smoking weed as we do and got the munchies and started eating mangoes because their mangoes are juicy and delicious. and sweet, great, great food for when you have the munchies. The problem with mangoes is that they have a very fibrous, so you get these fibers stuck in between your teeth. And so my brother asked me, he’s like, Hey, and do you have any dental floss, I need to get rid of these fibers in between my teeth. So I’m like, Yeah, I need some to. So we go to my bathroom, we’re both flossing our teeth in the mirror. And I’m, and I’m complaining them. I’m like, Man, this is such a pain in the butt. Like, if we could invent a machine that can floss your teeth for you. We would make so much money, everyone would want that. And he looks at me he’s like, yeah, that is the ultimate general market product, we have to come up with something like that. And so we start brainstorming, and we come up with all these crazy ideas. That would have never worked. But event, but eventually, we come up with with a design, and I’ll show I’ll show it to you, I’ll hold it up to the screen. For people who are watching this on video. It’s called the Insta floss like You’re like Instagram, but flossing, and what it is it’s uses 12 water jets, it’s in an H shaped manifold, it shoots the water jets both from both sides from the outside of the teeth and the inside the teeth both top and bottom rows. So you just have to bite into it like this. And it turns so it swivels with your teeth. And you’re done. Right. So 10 seconds, you just slide it across your teeth. And, and the water jets, get rid of all this stuff in your teeth. So in 10 seconds, you can have a full floss. So it’s the floss, it’s the floss.com. Tell your friends. Check it out online. So we’ve been working on that for five years. And it was the hardest product I’ve ever created. Because it’s a lot of water pressure and vibrations. And we had a lot of issues with making it not leaking and making it function properly. And the water droplets had to be shaped in certain ways. The channels is actually way more complicated than we thought going in. But that’s everything. But we are just starting to deliver it we actually just delivered to the first 5000 customers. So we did a crowdfunding campaign to for that. And we raised a million dollars for that product. Yeah, so it was a very big success. And we just delivered to the first 5000 people who supported us in the campaign. And so now and now we’re getting ready to ramp up. So anyone who’s interested in its to floss, go to Insta floss.com. And recently, I just started my latest venture, which is more relevant to the word dog story. So one of one thing ever since the movie came out, I’ve had a lot of people contact me, like send me like messages on Instagram, and you know, various other places. And nine out of 10 times people are they’re like, please, he’s like, they’re they’re like I, you know, I want to learn the business, please teach me the business, you know, I’ll work for free, I’ll give you 90% of the profits. I don’t care. Just teach me you know, and I, you know, I’m running these other businesses singular sound, and it’s the philosophy, I don’t really have time to take on apprentices. And anyway, I’ve been banned from doing government contracting for 15 years. That was part of my sentencing is I was not allowed to do government contracting. I can now in 2022, is when it expired at the end of 2022. So I am legally allowed to do it now. But but you know, I’m busy with my other businesses. But then I get in about six months ago, I get a message from a guy named Logan. And he tells me and his message was different than the usual he tells me, it’s like, you know, hey, I just want to let you know, that, that my partner and I both watched war dogs around six years ago. And when we were both 21 years old, and we were so inspired by the movie, we figured if these guys can do it, and they’re our age, why can’t we do this? So we went in we we started got into it, and we bashed our brains against the wall for like six months, until we finally won our first contract. And ever since we’ve been winning contracts, and nowadays we have a multimillion dollar government contracting business. And it’s all thanks to the inspiration for more ducks. So just wanted to reach out and say thank you. And I was like, Holy crap, that’s amazing. You know, that’s, that’s really incredible that they managed to do it on their own without anyone’s help. And, and, you know, and so and so they were like, you know, maybe we can do something together. And I said, you know, I have so many people who want to learn how to do this business want to learn how to do government contracting, and you don’t I mean, there’s the vast majority of government contracting is legal, right? I mean, all of it should be legal. If it’s you only find out if it’s illegal if someone got in trouble, but you know, but most of the stuff that even that we did you know as in with a Why frm and I, all of it was legal until it wasn’t. And it’s there, it can be argued that even the Chinese ammo should have been legal, because it didn’t really violate the embargo. So the federal government has a budget of like $6.7 trillion.

David Packouz  1:45:17

And they are the single biggest purchaser of anything on the planet. So if you know how to sell to the federal government, you can make a lot of money. There’s enormous, enormous opportunities. And so people ask me, you know, why would the federal government buy from some random guy, right? Why don’t they just go directly to the company, you know, who’s making it. And there’s a few different reasons for that. First of all, sometimes there’s goods on the market, that have just been sitting there that aren’t owned by the company that manufactured it anymore, you know, like, so for example, ammunition, ammunition oftentimes gets bought by militaries, just in case something happens. But most of the time that nothing happens, and their ammo starts getting older, and they aren’t comfortable having ammo beyond a certain date, and so they are willing to sell it. And so there’s all this ammo that’s being sold at well below the manufacturing cost by these different militaries. And sometimes other you know, like, in our case, for example, like for example, with the Albanian case, they were looking to get rid of all their ammo, because they wanted to join NATO. And the US Army was happy to take that ammo because they were giving it to the Afghans. And they didn’t have as stringent quality controls requirements for the Afghan allies as for their own US troops. So they were perfectly okay with taking ammo that was a few decades old, which to be clear, was fully functional, and it was good quality. And I’m not saying that there was any issue with the ammo. But but most first world countries do have requirements and how old they’re, they’re willing to give the ammo to their troops. So there’s opportunities such as that, where the government won’t get the best price from the manufacturer, they will get the best price from the open market. And sometimes they want to buy a whole bunch of things that not one manufacturer makes. So they’ll want to buy like 10 different items and have it all shipped to this particular place by a particular time. And there isn’t one company that makes all that so that opens the opportunities for middlemen to put together to find all the sources put together the package, figure out the logistics, and offer that to the government. And the way it works is they posted on the website on sh m.gov, everyone can go check it out, if you like sa m.gov, they post what they want to buy. And then if once you are registered properly with the government, you are qualified to make that bid. And if you have the best possible the best price, it’s not always the best price. Sometimes it’s a combination of factors. Sometimes they take into account delivery times and your past performance, your history of like, you know how reliable they think you are, and, and etc. And there’s a depending on each contract has its own set of requirements. But if you provide the best overall value to the government, as they call it, and then they award you the contract, then you can deliver those goods. And then 30 days later, they pay you that’s how it works. So it’s a pretty complex system, it’s not easy to learn on your own, which is why I was so impressed that Logan and his partner James taught themselves this on their own. So we realized that there is a huge need for for people who want to get into this business. And so we are launching word dogs Academy, and which is an online course, to teach people how to get into government contracting and how to be successful at it. We’re dogs academy.com, you could check it out. And we are not only building a course, but we’re putting up a forum so that we can create a community around it so that people can find potential business partners. And the biggest stumbling block for people getting into this business is financing because you have to pay your supplier in advance, and you have to pay your logistics provider in advance, but the government only pays you 30 days later. And so that’s something unless you have a lot of money or some or you know someone with a lot of money. Even if you win the contract, you won’t be able to deliver it unless you get it financed. So that’s another service that we are providing through word X for our students in Word X Academy is access to financing to investors to make sure that they are set up and the thing that’s beautiful about this is that we expect to make a lot more money from the financing than from the course. So we will only succeed if our students succeed so we have a very large incentive to help our students succeed in setting up a successful government contracting business. And so I’m really excited about this. This is brand new where it’s actually hasn’t launched yet. We are well, I don’t know when this podcast is going to be published. But it’s going to be launched in the next few weeks. But you could already you got already sign up to the course we actually have a little discount for people who sign up in advance. And just go to war dogs academy.com In fact, I’ve got some awesome yeah, yeah. The mugs there. I’ve got we’ve got the bling, the swag. Yeah, the swag. War Dogs. academy.com. Yeah.

Dan LeFebvre  1:50:37

Yeah, I’ll make sure to include a link to that into floss, as well as singular sound. I really appreciate your time coming on to chat. Before I do let you go. I want to ask. Because you with with singular sound being a musician, you actually do make a cameo in the movie itself at the very beginning. So do you have any fun stories from being on set that you would like to share? Sure.

David Packouz  1:51:02

Yeah, that was really cool, actually. So they offered me they offered to me to do the CAMEO and they wanted me to play as in the movie, don’t fear the Reaper, to a roomful of 90 year old people. Because that that was the that was the joke. I personally, I thought at the time, I’m like, oh, man, I’m a musician. I’ve also recorded original music. If anyone’s curious, you could hear it on Spotify, Apple Music, just search for my name, David packhouse. And I record so I’ve recorded I’m a original music recording artist. And so I figured, well, this is my big chance. There’s a movie being made about me. So I I insisted on playing one of my own songs. And I was like, I should I want to play you know, one of my own songs here. So I get my music into the movie. And they told me You either play don’t fear the Reaper, or we’re gonna get someone else to do this. This is not an option. This is not a negotiation. This is this you don’t have a choice. So I said, Okay, fine. I’ll do I’ll do don’t fear the Reaper find. And so that was cool. Went out to LA for like, for like three days. The way it worked is first recorded the song in the in a recording studio. And then on the day of the shoot, it was it was actually really cool. They had said that that scene is recorded in this old church in LA. And it doesn’t doesn’t look like a church in the movie, but like it was recorded in this old church in LA. And there it was on the second floor that and there was like steps going up to the second floor. And the staircase was like really nice and ornate wood. And they covered the entire pathway. From the front door of the building all the way to the room where they were shooting the scene with paper, like like the floor, the walls, the banisters, everything was covered in paper, like they taped it down so that all the people walking back and forth would damage the floor and the walls, because there’s literally hundreds of people walking back and forth. And so yeah, I thought that was pretty cool. They that the way they prepare it. And the thing that was that was really cool was they had outside of the building. They had these enormous like construction cranes, like three of them, holding these enormous mirrors that they angled to catch the sun and shine it and beam the sunlight into the windows. And then they sprayed like some like spray inside the the the room so that the sun beams would be very visible. So it was just amazing. Like that tiny little detail of just having some beams sunbeams through the window, they only see for a few seconds on screen. They had like three construction cranes, you know, it’s just like, it was just amazing the amount of money and effort they put into even the smallest little details. So yeah, so like I the way they did it was, you know, got up there with my guitar and pretty much did more or less karaoke, guitar karaoke, where they would play the song on like speakers, and I would like play along with it. And, and then while they were filming, at the end, after we were done at the end, they wanted to do a few more shots of me like some close ups and stuff. So they didn’t need the crowd. So they let all the old people leave. And but the only the only way to leave the room was they all had to file pass the stage password I was sitting, so they all were filing past me. And it was so funny. Like most of them just went right by and didn’t say anything, but a few people stopped and like one guy was like, Oh, I heard the lyrics of that song. I don’t think it’s very funny. I don’t think it’s funny. And I was like, Oh, I’m sorry, I didn’t it wasn’t my choice. And another guy another guy had the exact opposite. He was like, he was like, Oh, I just realized what you were saying. That’s pretty good. Because we’re a bunch of old folks don’t fear the Reaper.

1:55:06

That’s a

David Packouz  1:55:08

good one, you know? And then some, like, older lady was like, do you

1:55:12

perform I would love for you to come living facility and give us a performance. Yeah.

David Packouz  1:55:17

And so yeah, it was really cute. It was it was really nice. So yeah, so that was really neat. Met miles Taylor. He’s super tall, by the way. He’s like, six, three or something. He’s like, ridiculously tall. Bradley Cooper is even like taller. He’s like, six, four. And so yeah, Miles was nice. And when they were filming in Miami, they invited me to go on set a few times, just to like, hang out. And that was cool. I was there for the scene where Dan was Arian punches Jonah Hill in the face in the nightclub, okay. Okay. She’s like, hit hit. Hit it on his girls girl. Yeah. Yeah. So that was cool that that scene was is so interesting to see them film that scene, because in the scene, they’re in a nightclub, and they’re like, you know, they’re talking to each other, like yelling over the music. They wanted to get their recording them they want to get the vocals really clear. So they’re yelling, there’s actually in real life. There was no music playing. It was dead silent. And they’re yelling as if there’s, there’s there’s talking over the music. And everyone in the club is dancing as if there’s music, but it’s completely silent. And all you hear is them yelling at each other in this in this room. It was so bizarre. It was so bizarre. And of course you know when in the movie it’s like comes out great. And yeah, and it looks like they’re in a nightclub and all that but it with like loud music and everything. But it was just so bizarre to see them like filming that. Yeah, and I was also there for the for for two other scenes. I was there for the scene where where they get arrested and get put into the cop cars. That’s actually where I met Ana de Armas. And I got my I got my picture with her had to write you know, my wife, right? Exactly. She was she. And people always asked me that asked me this and I can confirm she is just as beautiful in real life. She really is. You know, it’s not camera tricks or anything. The girl is dropped dead gorgeous in real life just as just as gorgeous. In fact, I would say even more gorgeous in real life because she’s you know, it’s real. So yeah, I mean, she’s she’s really stunningly beautiful. And, and very, very sweet and very nice. I mean, everyone was nice to me. But like, of course they would be why wouldn’t they be nice to me? I’m the guy that movie was made about. So I make no judgments on anyone’s characters based on the way they treated me in particular, but, but I have no complaints. They were all very, very nice.

Dan LeFebvre  1:57:50

Fantastic. Thank you again, so much for your time. And before I just real quick, can you give links to your what you’re doing right now again?

David Packouz  1:57:58

Yes, so my music company is singular sound.com Am I the flossing company is in stiff loss like Instagram, but flossing and stuff. floss.com. And if you want to be a word dog, you can join me at word dogs academy.com and learn how to do government contracting.

Dan LeFebvre  1:58:18

Fantastic. Thanks again so much for your time.

David Packouz  1:58:22

My pleasure.