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Thu, 25 May 2023 00:00
David Packouz is a former arms dealer whose story was portrayed in the movie War Dogs with Jonah Hill, Miles Teller, and Bradley Cooper. This is part 2/2!
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So literally 15 years ago, almost to the day, the New York Times published this front-page article about us. They had both mine and Ephraim's mug shots on the front page. We did not look good. Welcome to the show. I'm Jordan Harbinger. On the Jordan Harbinger Show, we decode the stories, secrets and skills of the world's most fascinating people and turn their wisdom into practical advice that you can use to impact your own life and those around you. Our mission is to help you become a better informed, more critical thinker through long form conversations with a variety of incredible people. From spies to CEOs, athletes, authors, thinkers, performers, even the occasional former G-Hadi four-star general or legendary actor. And if you're new to the show or you want to tell your friends about the show, the starter packs are the place to do it. We got sets of episodes like negotiation and communication, China and North Korea, disinformation and cyber warfare, crime and cults and more. Just visit JordanHarbinger.com slash start or search for us in your Spotify app to get started. As I mentioned before, we got an AI chat about on the site. It's recently been updated to GPT-4, which is cool. It's a lot more useful. You can find any info from any episode of the show, any feedback, Friday question, any sponsor promo code. JordanHarbinger.com slash AI is where you can find it. I would love your feedback on this thing. Sometimes it says weird stuff, but it's really, really freaking useful and cool. So definitely go ahead and check it out. Today part two with David Packaus, if you haven't heard part one, go back and have a listen to that one if you have not done so yet. Part of the inspiration for the movie War Dogs became an armed dealer as a kid, almost went to federal prison for a really, really, really, really long time. And avoided that. But the story is a damn good one. So here we go with part two with David Packaus. You guys won the contract. Tell me how you find out and what that moment is like because there's got to be, it's like finding out you won the lottery. I was just getting home, I remember. This was in late January of 2007. I just got home and I get a call from Eifframe. He's like, I've got good news and bad news. And I said, what's the bad news? And he's like, our first task order is only 600K. And I said, well, we won the fucking contract. He's like, fuck yeah, we won. He's like, he's like, get dressed. We're going out to celebrate. And so what he meant by the task order just to give you a little background. The way the contract was structured was it's a $300 million contract, but that's estimated to be ordered over the course of two years. Right. And what they do is they give you like many contracts under that contract and they call that a task order. And legally, actually according to the contract, they only were legally required to order the first task order. And we weren't informed what the size of that first task order would be. So obviously we bid the contract with the idea that they were going to order the full amount over the course of two years. And that's what the logistics costs we put in and the way we negotiated with suppliers. If the government was going to drastically reduce the quantity, it would really screw us we would not be able to deliver. And so when we saw that the first task order was only 600K, we're like, well, unless they order something additional, we're fucked because we can't deliver 600K worth of ammo at the prices we offered them. So it turned out that that was just, you know, there a way to just get the contract rolling in a few weeks later that they gave us like, I think it was like a $30 million task order. So that's like the Trader Joe's sample where it's like, you can have that little like exactly exactly. Exactly. Just to make sure you like it. Yeah, they probably they wanted to see the M own be like, is this real? Because did they audit where they like, oh, this is a legitimate company, not just dudes in their garage because they didn't know. Yeah, they gave us several audits before wearing the contract. So, okay, which we've never gotten before for any other contract, even the $15 million contract we didn't get this. So for this one, they actually asked Ephraim to go meet them in person that there's a scene of us in the movie. I think this was in the trailer where we're, you know, stoned out of our minds and talking to the US to the military contracting officer. It didn't happen like that in real life. I actually didn't even go to that meeting because Ephraim wanted someone because he was so young, he decided to take Ralph with him because Ralph is an older gentleman. So he felt that Ralph would give him more credibility. He took Ralph with him and as far as I know, he didn't smoke weed before that though, that wouldn't surprise me either. I mean, he was doing drugs all day, you know, regardless of the situation. So, that wouldn't surprise me if he actually did that. But so they wanted to meet him in person. They also sent a team of financial auditors down to our office and they asked to see our accounting system to make sure we had a good accounting system to support this contract. And the funny thing was that it wasn't so funny at the time, we didn't actually have any accounting system. Ephraim never kept any records whatsoever. He just did everything by the seat of his pants. So he had to hire a forensic accountant to come in and build the entire accounting record for his company for the past like two or three years, I think two and a half at that point. And so they had to like pretty much create this paper trail and make it look like it had always been there. Oh my God. Yeah. Wow. Stress. Yeah, it took several weeks to do that. Several weeks to create an entire paper trail for that whole thing. So they had to hold for it like a whole accounting audit to make sure that accounting system was in place, which we put together at the last second. They also had a sources audit. They actually wanted to know where we were getting all the stuff. Okay. Good. I'm glad to hear that. Yeah. They wanted us to list everyone we were getting it from. However, with that being said, there was nothing stopping us from changing our sources afterwards. Okay. We were not legally required to use the sources that we told the government we were going to use. They just wanted to know that we had contacts with sources that had the capability of supplying us. That's almost like a plausible deniability thing. They told us that we're getting it from this South Korean arms company. And then they couldn't get it from there so they went to this warlord in Albania. In their defense, there is some logic to it because you don't want to limit your supplier's capabilities. If a new source, sources sometimes drop off. They end up selling it to somebody else before you or someone who you thought was a good connection to the government gets arrested for corruption. Surprise, surprise. So sources can dry up and sometimes new sources arise. And you want to be able to have the flexibility to do that. So with that in mind, they did not limit our capabilities of choosing our sources. But they didn't want to see that we had real sources that they believed could supply it, lined up. And so that we had a real plan that we were just blowing smoke and pretending and doing everything by the seat of our pants, even though we were doing about half of it by the seat of our pants. But it sounds like you were just you're back stopping it a little bit. Some people might have questions about why the Albanian mo was Chinese. So I'm going to do like a two sec an aside here and feel free to jump in. But basically Albania was crazy during the Cold War. So the dictator and Verhogia and pride butchering the name. He kind of just said like, I don't trust the Soviets. Certainly, you know, but I'm a communist. So I'm I don't trust the West either. And I'm near Yugoslavia, which is kind of also in between the Soviets and the United States and playing both sides. So he was a paranoid Kookie dictator and he built I think 800,000 bunkers all over the country. And so when you go to Albania today, there's still tons and tons and tons of these little gun torts that stick out of the ground on farmland near the highway at every bridge in the middle of towns. They'll be like a garbage filled gun emplacement. Yeah. 800,000 of them each one cost about as much as an apartment. They had a housing shortage, surprise surprise. His thing was when I get invaded by either the US or the Soviet Union, I'm going to pull every man, woman and child into one of these bunkers and we're going to shoot them until there's nobody left. And they're so I'm going to stay in power. Total war. Total war. Yeah. And so in order to get the ammo, this is a little hazy, but basically he just said, hmm, who's communist and isn't Russia and isn't, you know, but of course no capitalist. Oh, China. Let me get some help from China. And China was like, great, we have an ally that's not Tibet or somebody we've invaded. And they gave them a foothold in the Mediterranean. So they were thrilled to get the Albanians as their ally. And it was actually now Chairman Mao who made that alliance with the Albanians and supplied them with massive amounts of Chinese military equipment. He even gave them whole factories like that they were able to set up in Albania, which was actually came out in court later that how do you even know that this was made in China when the factories were shipped over to Albania and they could have made what looked like Chinese ammunition in Albania. So that became a matter of legal debates later on. Interesting. Yeah. There's not even really any way to prove that the ammunition was originally from China at all. How much ammo was this again? The total amount. So the AK-47 ammo was about 150 million rounds. That is so much. How much fits in like one plane load or whatever? So I recall correctly it was about 2.7 million rounds was in 45 tonne, IL-76. You need, I'm not great at math, but you need like 50 planes. Just for the AK-47 ammo. These are massive freight planes. Yeah, 45 tons each. Wow, okay. That's a lot of freight cost. Yeah, it's about like two container loads, you know, like what those 40 foot containers that you see on ships, like it's like two tractor trailers about 45 tons, a little more. We ended up delivering before the contract was canceled about 70, I believe it was 71 aircraft loads of ammunition. So there's one or more every single day is just landing? Yeah, we were unloading. We were unloading three to four a week at one point. Oh my God. And so repackaging it, that saved you guys a bunch of money and somehow ended up with a margin on each one of those. It actually saved us a lot of money. So the repackaging, I think we spent like $100,000 to get a repackage and that saved us around three or four million dollars in air freight costs. Oh yeah, that's a really good return then. Yeah. Wow. And you're getting the ammo through Heinrich or Henry. There's a part of me that's like, if from didn't try to screw over Henry, like there's the one guy. Oh no, he did. He did. Okay. All right then. And how did that go? Well, actually, which actually was this, that led eventually to the downfall of the contract. Oh. Yeah. So what happened was, is that once we made the deal with the Albanians and I mean with Henry and we made the deal to repackage it and things were starting to get repackaged and we're starting to go and starting to get delivered. Of course, you know, as Ephraim's natural tendency to be, he was looking for a way to squeeze more profit out of it. And so the guy who was doing the repackaging for us, Costa Trebyschka, was his name, Alex founded because he owned a cardboard box factory in Albania. And so we were looking for massive amounts of cardboard boxes. So we found him to supply the boxes and then we're like, hey, you have a bunch of workers in your factory. Would you be willing to do this job for us? And he, you know, he agreed to do it. Ephraim went over to Albania to try to convince the Albanians to give us a better price. The way he did it was he, before leaving, he, he tells me he's like, hey, listen, I've got to convince the Albanians to give us a better price. So the only way they're going to give us a better price is if they think that we have better options than them. So why don't you take all the quotes that we got from like the Kazakh stannies and from Ukrainians and just, you know, doctor those documents. So it looks like the prices are much better than they are. Okay. Better than the Albanians. And I'm like, okay, yeah, that's what you want me to do. I'll do it, you know. So I, you know, edited some PDF documents, made it look real, you know, and gave them copies of it. He gets, he, Alex told me, you know, he met him at the airport. Alex goes with Ephraim to meet Yili Pinarri, who was the head of the export company in Albania who's in charge of selling these, this ammunition. And Ephraim shows them the papers and Yili takes one look at it and he's like, that's all fake. He didn't even look at it. He's like, don't bother me with your fake documents. Wow. Yeah. And so Ephraim was, you know, begging and crying, saying, ah, you know, the freight, you know, like it's going to kill me. I can't do this. I can't deliver profitably. You know, you need to do via favor, you know, so we can do war business in the future. And every excuse you could think of. And the Pinarri was like, look, you know, you, you and I both know that this is the best deal that you can get. There's no one else in the market that's going to sell you out of this cheap. And it was true because Albania at the time was trying to join NATO. And one of the requirements NATO has is that they get rid of all their old Warsaw Pact ammunition. So the Albanians actually hired someone to start destroying the ammunition. They actually hired an American company to do this. And later, this is months after us that turned into a huge political fiasco, tragic disaster, there was a huge explosion at the plant that they were disassembling the Zamo. And it killed like I forgot the exact number, but like something like 30 people. Oh, man. Yeah, like men, women and children, you know, civilians from the surrounding town is an enormous explosion. Nothing to do with us. People think that has to do with us because it was Pinarri and some of the other people who we were doing business with were also involved in this other contract. So the Albanians often, you know, they combine our stories. They think that we had something to do with that. I've gotten a lot of hate on YouTube for that reason, but it is where it is. So Ephraim asked Costa, who was doing those, the box guy, if he had any connections with the Albanians to get him like, you know, information about what the Albanians are actually getting paid for the ammo. So Costa actually had some connections in the Ministry of Defense. And he found out that the Albanians were getting paid two cents around for the AK-47 ammo. And we were paying Henry four cents around. Oh, okay. So Ephraim lost his shit, right? Because he's like, Henry's making so much money on us. You know, fuck that guy. He screw with us. He screw with us. And I told Ephraim, I'm like, actually, I mean, we're making around the same amount of money as Henry. Yeah, we're making about the same amount. More or less the same. And the margin is different, but the total amount of money is the same. And because we had to pay for Ephraim. And he's like, yeah, but it's our contract. Fuck him. I want to make more money. I'm going to buy it directly from the Albanians. And that's when he flew to Albania and tried to do this deal directly with Penari. And Penari was like, he actually brought him into a meeting with another guy whose name was Dili Orgy, who it turned, we found out later, was part of the organization. It's a crime element of Albania. He was like the mafia boss. Surprise, surprise. Yeah. And as soon as Ephraim enters the, this is what Alex told me because he was there. As soon as Ephraim enters the room with Dili, you know, Ephraim is the kind of character he's always talking shit, you know, like no matter who it is. And I've seen him talk shit to some, like, you know, tough-looking characters, you know, like, we've gone out, like, you know, to clubs in Miami and he'll like, you know, go up to like a, like this big buff guy and grab the girl's hand who's with him, say, hey, bro, I think she's better off with me. You know, like, like, things that are just insane that an unnormal person would just not do, you know? And like, he's gotten to many fights that I've had to like pull him out of. Got to a point where he only went out with him because I felt like almost obligated as part of our business relationship to keep him at trouble. He's dead. We probably not be able to do any more deals. And so, all right. It was very, very frustrating to go out with him. Anyway, so he's a big talker. But like, the second he stepped into this office in Dilly-Yorgie was there. He got really quiet because he could tell right away that it was like this building, this high rise that was still under construction, but they like, go through this construction, you know, this under construction dusty area. And suddenly they entered this office and it looks like like a Wall Street board group, you know, like super-shade, you know? Like what's this doing here? Yeah, like this office doesn't exist, but it's also like well equipped. Exactly. Yeah, like this, definitely there's movers and chancers here. And he gets into the office and suddenly Ephraim who's usually a big talker, suddenly is real quiet and doesn't say anything. And Dilly-Yorgie tells him, he's like, look, you know, I hear you want a better price. And Ephraim's like, yeah, yeah, we need a better price. He's like, well, we can't give you a better price. And we know that you're hiring this other guy, this Costa Trevishka guy, to do the repackaging and you're paying him money for this. So why don't you give us that contract to do the repackaging? We'll make some money on that. And then we give you a little better price on them. So that way everybody wins, wins, right? And Ephraim's like, yeah, fuck Costa. Here's, you know, you've got the contract. Let's do this. And Costa got stuck with $20,000 worth of cardboard boxes that now he had nothing to do with. And he called me up, Costa called me up and he's like, hey, listen, you know, I understand business is business, but can you at least make arrangements to buy these boxes? And I said, yeah, yeah, I'll talk to Ephraim. I'll make sure that he'll cover you. Yeah, we'll cover you. And I told Ephraim, hey, you know, like make sure that you buy these boxes from Costa, you know, so because the, and Ephraim's like, yeah, yeah, yeah, I'll take care of that. I'll take care of that. Of course, he never did anything. He just didn't give a shit. That really pissed off Costa and Costa, we found out later, decided to go to the New York Times and tell them what we were doing. And he went to the FBI and told them what we were doing. And his biggest mistake was that he went to the Albanian press and told them what was happening. And that ended up getting him killed. Oh, wow. Yeah. Because like a few weeks later after that, he died in very mysterious circumstances in a car crash when there was no, he was driving down this like road that was like a flat road in this open field. There was no other cars around, but somehow he crashed. I don't know into what. And he got thrown from the car like 30 feet and he ended up dead. Yeah, that's pretty sketchy. Yeah. Oh, man. So, yeah, so that, unfortunately, is what happened to Costa. I wonder why they killed him for that probably because where the ammo came from was not supposed to be selling ammunition, right? Well, no, when it was the main issue was that he told the Albanian press that the Albanian politicians were getting kickbacks. Oh, yeah. And they gave the contract to the mob, which it's like these guys knew about, oh, man. What about the... Because Albania, like in any country, like third world countries, they have like a big problem with corruption. It's one of their major problems. And so he said, hey, you know, there's this conduit, the government is selling the ammo, they're pocketing all the profits, the politicians are in the league with the organized mob. They're going through the Swiss arms dealer. They say he told them everything like he, you know, and then he ended up dead. That's kind of sad because he really like ended up dead because of... Yeah. Well, because of you guys in a way, because of from screw to mover. Yeah. Well, because of from screw to mover. And then he felt it was, I guess, his moral duty to blow the lid off this. Yeah. He still involved, so there's that, but it's also like, well, he wasn't going to die. Yeah. Yuck, that sucks. And Henry was never cut out in the deal. I mean, when, when Efer made that deal with the Albanians, they still had everything go through Henry. And I assume, I don't know for sure, but I assume it was because Henry was doing the payoffs to the various politicians, because that's how they managed to shield the money trail. Yeah. And, you know, other deals, you know, who knows? I mean, it's really hard to cut somebody like that out when they're better connected than you, because if someone's playing the long game, they see that it's not worth it. They know they're going to play again. They need to not piss off that person. True. Versus like some dude bro from Brooklyn or wherever you guys are based at the time. We're from Miami, but yeah. Miami, yeah. So Eferum had a different philosophy than that. He felt everyone was expendable. So actually, I got this story from Matt Cox. Matthew Cox was in prison with Eferum and became Eferum's ghost writer. Oh, that might have been who I was talking to earlier. Yeah. Must have been Matt Cox. Yeah, Matt Cox. So he was Eferum's ghost writer in prison. And he told me that when he was writing Eferum's story, and Eferum was telling him the whole story, he tells, you know, he realized Eferum, like, screws pretty much everybody. He's ever done business with literally everybody's business with. And, you know, Matt tells him, Matt told me that he told him. You know, he's like, I told him, you know, Eferum, you can't keep him burning all your bridges, man. And Eferum said, there's a lot of bridges out there, bro. Oh, yeah. That's the complete opposite of how I do anything in my life. And most people who are successful, yeah. That's very cringy and gross to hear. Because it's like, I know, but I don't care. That's really, it's like sociopathic sort of level of empathy. That's exactly it. Yeah. Is shipping the ammo mostly smooth sailing or is it like, oh, this, now the Russians are stopping this or this country is trying to not let it happen? So in the beginning, it was a real challenge. Like we didn't ship anything for the first, like, three months. And because it was to ship ammo over internationally, it's a lot harder than shipping, like just any random commodity. You need a bunch of documentation. You need an end user certificate from the buyer, right? It's a document saying that, you know, this ammo is going to the government of Afghanistan, to the military of Afghanistan. And we, the military of Afghanistan promises not to re export this to any other party without the supplier's permission. That's the first thing you need. And each document takes time because every bureaucracy, you know, has to go through its procedures. And oftentimes, various people, you know, hold things up. And, you know, it's always a headache. So you need to get your end user certificate or UC, as they call it. And once you have your EUC, you take that and then you get the export permit from the supplying country. They have to go through their government and their procedures to get that. And once you have both of those documents, then you need to get a flyover permit if you're shipping this by air for every country that the plane flies over, you need to get their permission to transport these goods over their airspace. Okay. So the flyover permits turned out to be a real nightmare to get for this because, yeah, we were flying over Central Asia. And a lot of those countries are very much aligned with Russia. As we found out later, the Russians were pressuring them to not approve these permits because they wanted us to fail in supplying the US Army. And we eventually took several months, but eventually we got every flyover permit. So the way we would do it was when a country would not want to give us a flyover permit, what we would do is we would contact the military attache, the US military attache within the government. And when the United States has an embassy in the country, they have a military attache that's a representative of the US Armed Forces in that embassy. And so we would contact that military attache and say, hey, where US government contractor is, we sent up a copy of our contract, so they see we're real. And we need your help in convincing this government to give us a flyover permit. And then that military attache would apply diplomatic pressure as they were able to within that country to make them approve this permit. And that worked for almost all the countries that we worked on except for Uzbekistan, Uzbekistan just refused to give us a flyover permit and no matter how much pressure we tried to exert. And then I had the idea, I told Efer, well, what if we hire the Uzbekistan national airline to do the shipping? And he was like, yeah, that's a great idea. And so we asked them for a quote and they actually gave us a quote. And it was actually relatively reasonable. It wasn't even outrageous. And suddenly our flyover permit was granted. Right. It's like, we would love to hire you, but there's just one problem, one of the wealthiest men in the Uzbekistan who owns this area. We can't seem to get flyover permits. Because you know anything about that and he's like, let me make one quick phone call and solve this whole problem. Exactly. Skin and the game. That's some motivation exactly. They need some skin in the game. That's impressive. My question was, how do you even start the process of figuring out who to talk to the person that's going to give you this permission? And this kind of knowledge is so specialized that it's no wonder there are riches in these little tiny, well, and these little tiny niches where it's like, okay, I can get ammo from this place, from this other place over these places. And it's just like, well, that's where the cash is because it's a huge pain in the ass. You need a ton of connections. Yeah. And you can't just hire some one stop shop that's going to be able to do this. Exactly. You learn as you go. I mean, that's like any business. Every business has its quirks. And I think that a lot of people stay out of the arms business because there are hazards both moral business and possibly physical at times. Sure. Definitely political. So that hazards are significantly more than just basic commodity businesses. You're listening to the Jordan Harbinger Show with my guest, David Packaus. What will you write back? This episode is sponsored in part by Grammarly. There are a few tools that I use every day, kind of all day, every day. And I can't live without. Grammarly is one of those. I've been a user of theirs for years. It's like having somebody over my shoulder gently reminding me ways that I can improve my written communication, which Jen used to have to do. Hey, that's really unfriendly. This comes across really abrupt. Now Grammarly does it automatically. So it's saving Jen a ton of time. But it also helps you become and write more clearly, concisely, professionally. I think you should start using this if you work in an office environment or if you're someone like me who's firing off emails all the time. And you don't necessarily think about how it might be perceived on the other end due to the speed that you're drafting them. That's been super helpful. This is their tone detector. It gives you feedback on how your message comes across. And it is just absolutely invaluable. Like I said, I got a tendency to be curt, not always great. This thing runs in the background. It's like an extra set of ears or trusted eyes that I can rely on to help me be more mindful of how I'm coming across, which again, super helpful and professional settings, super helpful if you're running the team. And you don't want people to think that you're kind of a dick. And it's easy to implement because again, it runs in the background of everything that I write, my email program, my browser, everywhere on my computer, it Grammarly will underline incorrect words and grammar and show you what to replace it with. And here's what I love about it. It also tells you why. So you're like, oh, that's why this works like this. Not just, oh, I just fell that wrong every time, right? Never hyphenate that. You hover over it and tells you why. Awesome. The right tone can move any project forward when you get it right with Grammarly. Go to Grammarly.com slash tone to download and learn more about Grammarly Premium's advanced tone suggestions that's g-r-a-m-m-a-r-l-y.com slash tone. This episode is sponsored in part by apartments.com. Do you fantasize about who you'd be if you lived somewhere different? Maybe you'd surf if you lived by the ocean. Or if you lived by a coffee shop, maybe you'd finally write that novel. If you had a dishwasher, maybe you'd actually cook a proper dinner at home instead of doing takeout every day and get fat like me. With over one million available units for rent on apartments.com, the U-Abilities are endless. And with instant alerts, you'll never miss out on seeing what could be your new perfect place. Visit apartments.com, the place to find a place. If you're wondering how I managed to book all these great thinkers, authors, creators, arms dealers every single week, it's because of my network and I'm teaching you how to build your network for free over at jordanharbinger.com slash course. This course is all about improving your relationship building skills and inspiring other people to want to develop a relationship with you. It's all done in a very easy, non-cringy, down-to-earth way. It's not awkward. It's not cheesy. It's all practical. Takes a couple minutes a day. And many of the guests on our show subscribe and contribute to the course. So come join us. You'll be in Smart Company where you belong. You can find the course at jordanharbinger.com slash course. And no, I don't want your credit card information. You're not going to get billed. There's not a ridiculous upsell. That's just something that I think does well for everybody and makes you appreciate the show just a little bit more. So enjoy. Now, back to David Packhouse. Look, I've been in North Korea. I've been in Albania. It was at the time the poorest country in Europe. Now I think it's moldova. But like these are not places where when you're 40 and you have kids, you want to just be schlepping into and you're just like, who you can meet? This gangster, this corrupt politician, this arms dealer, we're all going to meet in a warehouse in the middle of nowhere and inspect this product. Right. Like no way. It's a bad idea. Even if they're like, no, we're just going to do business. It's just you're going to draw the short straw at some point. You're going to meet an F-Rame. Except for Henry, he manages to skate by somehow. Nothing seems to touch him. But again, he's a broker. He's probably like, I'm not inspecting the product. I'll meet you at the four seasons in Geneva. I'm not going there. You're coming here. I'll get you a visa. I mean, Henry would be on the ground. Really? Yeah. Yeah. I mean, to inspect the product, I don't know about the delivery aspect, but he has been on the ground and the sources to be there. So he gets his hands dirty. Yikes. Yeah. That's a guy I'd love to talk to, although he'd never tell me anything. He wouldn't. Yeah. All the most interesting people are the ones who are like, I don't know you're talking about Jordan. No. We are merely an importer, exporter of textiles. Yeah. I mean, if he told you everything he'd ruin his business. Sure. Maybe once you retire, if he ever does that. This is probably a ridiculous question. It feels like one. But is this stuff insured? Because it's three loads per week. What happens if some of it goes bad or isn't working or the plane doesn't make it? I mean, it seems like you should have that. But can you even insure that? I think there might be insurance that you could buy, but it would be extremely expensive. And I know that at least as far as we were concerned, we did not insure anything. This all seems like a really fun and interesting business. And there's a lot of wheeling and dealing, which I would have loved in my 20s. I'm way, way too old for this kind of stuff right now. I don't know about you. Same. I'm out of that business with no intentions of going back. I do picture you guys walking around with silk suits and metal briefcases and sunglasses. Just the straight up Nicholas Cage circa 1996 aesthetic period. That's exactly what we did. It wasn't silk. It was regular suits. But we did have, yeah, we did have a something like those cool shades and metal briefcases. Because we specifically tried to look like Nicholas Cage, because that's who we were basing our look on. We were able to take us seriously, you know? Yeah, maybe that wasn't the way to go. But at the time it works, yeah. Right, because everyone's like, oh, that guy, he looks like an arms dealer. All right, fine. More than anything, it was that we always carried documentation proving that we had active contracts. And once you show them that and they're like, okay, I mean, regardless of how young these guys look, they actually have, they're doing business. So you want to do business with them or not. How did you start to smell that Ephraim was going to screw you over? So after, of course, after the logistics issues were taken care of and we started delivering on a regular basis, three, four aircraft a week started going into Afghanistan. And I had more or less taken care of all the issues. And my, the only things I really need to do is more or less just like babysit the logistics companies and make sure that the receiving contracting officer at the, at the, in Afghanistan signed off on the documents. So my workload went way down because I had already set everything up and I stopped coming into the office as much because I didn't have to to do my job. And he started complaining and he's like, hey, you know, he goes to, I remember I was staying at the office late one night where everyone else had left. I still had some stuff I had to do. And Ephraim comes into my office and he says, you know, a lot of the guys around the office are complaining that you're not pulling your weight. At this point, we had about about like 15 people working for us. We had started just us two, but like after we won the $300 million contract, he decided to spend two grand a month on an office. Now that was when we actually moved that. You're like a we work. Exactly. AK 47s and missiles. Yeah, pretty much. So he, he comes into my office and he's like a lot of the guys around the officer, like, you know, saying that you're not pulling your weight around here. And I'm like, what are you talking about? What guys are saying that? Because I'm doing what I need to do. And, you know, I don't know what you're talking about. He's like, yeah, you know, because you, you're not coming into the office that much. I'm like, well, I'm taking care of what I need to do, right? You know, this is my job is to babysit the Afghan contract. And that's what I'm doing and things are smooth. So what's the problem? He's like, yeah, but, you know, you're not like helping out with our other contracts that we're going for. And I said, well, I told, first of all, I told you not to go for those contracts because he was like chasing literally every fucking thing. He was chasing, you know, two million dollar contracts, you know, a half a million dollar contract. And I'm like, dude, why are you wasting your time with that? We got a $300 million contract. Let's concentrate on delivering the successfully and, you know, pulling as much profit at it that we can out of this. And then that's going to make us the vast majority of the money that we're more than, you know, getting distracted by, you know, going after a whole bunch of tiny, big contracts that we might not even win. But he was like, hey, man, you know, we're on a roll of everything's money. You know, I'm going, I'm going for it all. So you take care of the Afghan contract, you leave the rest to me. I'm like, okay, I mean, that's what you want to do. So he started chasing all these other contracts. And, you know, a lot of them, as these things tend to do, got to be a bit of a logistical headache. And he's running around like crazy screaming at everyone in the office, you know, to do this that and the other. And I'm like, listen, you know, we have a deal by deal basis. I'm not responsible for, you know, I'm responsible for the deals I work on. That's what I'm getting paid on. So if you decide to do other contracts, I'm not getting paid on that. You know, why should I work on that? And he's like, yeah, but like if the company, you know, goes bankrupt, then the Afghan contract gets destroyed too. So you got to make sure that the company is taking care of it. And I said, well, in that case, are you willing to give me a percentage of the company instead of just the contracts I work on? And he's like, come on, come on, don't be ridiculous. I mean, I want you to work for free one. Yeah. That's exactly it. He wanted me to work for free. And I said, well, in that case, you don't give me a piece of the company that I'm not going to do it. And he's like, well, how about this? I'll give you 1% of the company instead of the like massive amount you're going to get from the $300 million. Yeah. I'm like, well, you know, we have a deal as for the Afghan contract, it was I was supposed to get 25% of the profit initially. So I was like, well, 95% of the money that the company is going to make is going to come from the Afghan contract. So I think I'll just stick with our deal on the Afghan contract rather than going to 1% of the company. Yeah. For all the headaches. Yeah. Exactly. And he's like, well, that's my offer. Take it or leave it. And I said, what's are you not going to pay me what we agreed on the Afghan contract? And he's like, you're a breach of contract. You're not doing your job. I'm like, I am not in breach of contract. I'm doing my job. And if you're not going to pay me what you agreed on, I'll see you in court. And so then I left. And that was the end of that. And I sued him. I was getting my lawyer lined up and everything. And two months later, the Fed's rated his office. I was already long gone by that point. Two months ahead of the company. But one of the secretaries in the office called the up and she's like, hey, because I was on good terms with everybody. I was like, I was considered the nice guy. And he was the asshole. So like when people would have problems with him, they would come to me and complain about him. So I wasn't nice, remained in good terms with them. I'm still good friends with some of the people I worked with back then. So one of the secretaries calls me up and she's like, hey, I just want you to know that the Fed's just rated the office. And they're told us all to step away from our computers. And they told us to leave and they're gathering up on everyone's computer and they're packing up all the files, all the filing cabinets. And they're taking it all. And I'm like, oh shit, we're fucked. And so I called up Alex who is still in Albania, supervising the repackaging job in Albania. And I told him what happened. I'm like, hey, you know, just FYI, the Fed's just rated F from office. So Alex calls up F from a guy, a new guy named Danny answers the phone. Danny is the guy that F from replaced me with one side left. He ended up screwing Danny over to. I'm so surprised to hear that. And he ended up screwing the guy he replaced Danny with as well. I mean, it's just like a never ending succession of people that he promises the world to and then screws over. So yeah, and he's, but I just heard recently that he just recently got into some big lawsuit with somebody. So he's the same guy doing the same thing. Yeah, he's the same guy. So Danny answers the phone. Alex want to, you know, want to feel him out. See what was going on. And so Alex is like, hey, Danny, I need, you know, I need some of documents, you know, or shipment that's coming in today, that's going to be leaving today to Afghanistan. I need these documents. He is sending over to me and Alex told me that he hears Danny cover the phone, the mouthpiece of the phone. And he's still can hear Danny talking and he's like telling F from, hey, it's Alex. He says he needs this documents. What should I tell him? And he hears F from saying, oh, don't tell him anything. Just tell him that there was a bomb threat. Yeah, yeah, there's a bomb threat. So we had to leave the office and so we can't get the documents. The soon, you know, they clear things up. We'll get it to him right away. So, so, you know, don't worry about anything. And so Danny gets on the phone and repeats exactly what Efram told him. And Alex is thinking, why are they lying to me? Why are they lying to him? Who cares? Right. Just say, hey, I got rated. Like, it's not good. But we're going to, whatever, we'll figure it out. So in Alex's mind, I don't know the real reason, but in Alex's mind, Alex is thinking, well, maybe Efram is thinking that he's going to throw him under the bus. Oh, yeah, good point. Efram is going to claim he had no idea about the Chinese. And so, this is what Alex is thinking. And Alex is like, there's no way I'm fucking going down for this motherfucker. Alex isn't getting paid such other, he was getting paid a straight salary. He wasn't getting a commission or anything. He was getting paid a straight salary and it wasn't even a particularly high salary. So Alex is like, you know what? This is not worth it. I'm out of here. And he saw the next flight home. And so Alex and I, both hire lawyers and our lawyers, the first thing they tell us is, go look through your emails and look for the keywords of what you're worried about. Make sure there's no evidence in their life. Smoking gun emails saying, cover up all the Chinese documents. Yeah, God. Exactly. Well, they're like, well, you know, if there is smoking gun evidence, we should know about it. And so we don't let you gather all the things that you think could be damaging and send it over. And so we both look through our emails and we realize how much smoking gun there is. We were not careful at all, unfortunately. I mean, I think in the beginning, Ephraim was like, hey, we should only do talk by phone, you know. But then after a few days, we were still also frazzled. And we had to, we were all on different time zones. So we had to, you know, get time-sensitive information to people who might be asleep and we were super tired. So eventually someone just started, you know, writing, hey, you know, do this, this, and make sure you read back to the out. Make sure there's no Chinese documentation. And that came out there. And we were all copied out these emails. So there was literally rock-solid evidence that we were aware of the whole situation at the time. And our lawyer said, hey, you know, this evidence is pretty strong against you. It's not like, uh, Ephraim is going to pay for your legal defense. So if you're going to fight them in court, you're going to need, do you have like a few hundred K? Because that's what you're going to need. And I didn't have a few other K because Ephraim didn't give me a penny. And Alex Sherden had a few hundred K. He wasn't getting paid very much. So really our only option was to, uh, cooperate. And the government told us that they're like, hey, you know, if you guys cooperate, we don't think that you're not really a target. So we're not even going to charge you. We're really just going forever. You know, we're like, great because, you know, he tried to screw us over. So we owe him nothing. Um, we're not making any money off this whole thing. So why should we go down for it? And six months go by and nothing happens. And we're like, okay, well, maybe they decided not to pursue this case, you know, because, you know, always bring charges with every investigation they do. About six months later, I think it was in, uh, it was March, I remember it was March 27th of 2008. So literally 15 years ago, almost to the day, the New York Times published this front page article about us. They had both mine and Ephraim's, uh, mug shots on the front page. We did not look good. And it was right next to a big picture of a rusty looking ammunition. And the New York Times said that we were delivering low quality defective ammunition to the Afghanis and we were putting all the soldiers in danger, you know, and that this was all George Bush's fault because he hired these two stoner idiots to do this $300 million contract. So that was like the whole narrative. Um, and the reason they got that picture on the front cover was because Ephraim had bought, I think it was 30,000 rounds of Bulgaria. It wasn't even the Chinese stuff. It was Bulgarian ammo. He had bought its side on the sea because he had gotten like a super, super good deal, like even better than the Albanian deal. It was like literally, like, I think like maybe 20% the cost of the Albanian ammo. Oh, wow. Yeah. So it was super cheap, practically free. And but he didn't have, it was a small quantity, like very small, like 30,000 rounds. And, you know, 2.7 million rounds fitted in aircraft. So that, you know, it was something that we were already shipping grenades from Bulgaria. So we figured, well, buy these rounds. If it, if it, we didn't have time to inspect it. If it's good, we'll make some money on it. If it's margins, if it's bad, the government will just reject it. And, you know, it's not such a big loss because it was so cheap. And we had room on the plane anyway. So Ephraim decided to go for that. And when it got to Afghanistan, the government inspected it and it turned out to be total shit. And they rejected it. And they're like, we're not paying you for this. We're not just giving this to any soldiers. And so the US Army had nowhere to put that 30,000 rounds. So they just put it to the side of the airport, run away, where they had unloaded it. And they just left it there. Oh, and that's the photo that New York Times takes. Is this rusty moldy? Yeah. Out in the weather for months at a time, even though it's already 20 years old or 40 years old ammunition. Oh, man. Exactly. So that's the ammo that the New York Times saw because all the other ammo was already issued to the troops. I don't think they went very deep into, into Afghanistan, probably not a safe thing to do. So they just asked the local people, hey, can you show us some of the stuff that AY. They delivered and they go, yeah, that's some of the stuff they delivered. So they took pictures of that and they extrapolated and said, oh, this is the sum of the stuff that they delivered, implying that this is all the stuff that we're delivering. And so that became a huge political scandal. And there were hearings in Congress. You could look this up on YouTube. There's like, I think it was Henry Waxman who was like one of the lead congressional people at the time. Like, he's talking about us on the floor of Congress. And they said that Congress contacted us and said that they wanted us to testify in front of Congress. And our lawyers said, well, if you make them testify, they're just going to plead the fifth because they're under criminal investigation. So Congress said, well, on second thought, we're not going to bother with that. So we didn't end up testifying it in front of Congress. And the US Army was like, well, we had no idea about any of this. We're taking the contract away. Even though it came out later in court, that day were informed by the Justice Department who were doing the investigation. As soon as they raided the office, the Justice Department found Henry notes on Diveroli's desk. One of the two do items was repackage Chinese ammo. So that kind of tipped them off. And the Justice Department knew what was going on. And they told the Army that this came out in court later. They sent the Army an email saying, hey, this ammo is Chinese. It may be illegal. You should probably stop taking delivery on this. And the Army said they needed it. Yeah, the Army said, well, this is mission critical supplies. And we're going to continue taking delivery on it unless we get a letter from the Attorney General of the United States requesting that we stop taking delivery on it. And the Attorney General never sent that letter. Why they never sent the letter? I don't know. Maybe they made the political calculation that, hey, as long as there isn't a political stink about this, let's just keep it quiet and continue taking delivery. Maybe they didn't care. I don't know. But they only started caring once the New York Times published that article. And suddenly the Army pretended like they were shocked and appalled. Right. And man, they had no idea the whole time. And then they immediately canceled the contract with AEY. And they put it out for open bid. And then the Justice Department brought charges against us right after that, like a week later. Nothing like a good public humiliation to get the government to take action. And by the way, this is, this is when people crap on journalists. This is why good journalism is so important, by the way. It's not the focus of this conversation. But it's like, really, the only thing keeping a lot of this stuff in check is stuff, is articles like that. Even though the photo is a little disingenuous, this kind of deal would be the least of our concerns if people weren't worried about getting exposed. Right. And maybe you see that in countries with no free media. It's just a mess. That's very true. I fully support free journalism and the freedom of the press and freedom of speech. I do wish that journalists would be less disingenuous. That's the internet man. Click farm crap. Yeah. You know, obviously did a lot of harm to us. Not that we were totally innocent or anything like that, but it definitely skewed the story. And once one publication publishes something, none of the other journalists bothered to check whether it's true or not. They're just like, oh, as reported in the New York Times, this and this happened. And it's the gospel truth from then on, no matter, even if there's counter, you know, evidence to it. So what do they charge you with? Just that one specific act of fraud, which was repackaging the ammunition, is that it? So the way they work is, and this is kind of speaks to how the justice system works in the United States, was they said to us, you know, first they had told us they weren't going to charge us with anything, right? And we initially agreed to cooperate. They're like, oh, you're cooperating. You're not even a target. We're not going to even charge you. But then once it got into the newspapers, they're like, oh, we need to charge you because you're too closely associated with the actual, you know, acts of, you know, that we're charging to Verily with. So we can't just let you go and charge him only. The initial thing that they charged us with was they said, you know, you delivered 71 aircraft loads of this Chinese ammunition. And each aircraft load had a document, right, that stated what was in the aircraft. I know where this is going. Right. So like it states, you know, what, what the type of ammunition is in the aircraft, the quantity of the ammunition, the year it was manufactured, and the place of origin. And under place of origin, you guys put Albania and you knew that the real place of origin was China. And not only did you put this false information on the document, you actively covered it up. You had a whole pat repackaging operation to hide the fact that it was Chinese origin. And then you lied on the documents. So each time you lied on this document and you submitted it to the government, and from signed the document, but I'm the one who was submitting it all to the government. So I was liable. You know, you submitted a document that you knew was false to the government. And each one of these documents is an act of fraud. That's terrifying. Yeah. And so we're going to charge you a 71 acts of fraud. And each of these acts of fraud could get you five years in prison. So you can get 355 years in prison. Or you can plead guilty and they use their discretion as prosecutors to combine those 71 acts into one. I'm scared for you right now, even though I already know the outcome is difficult because I'm here. And you had kids at this point, right, which makes it 100 times scarier. Yeah. And then my daughter had just been born. She was actually born like a month after that we won the contract. Oh, man. And my daughter was one year old at the time. And so they're like, if you plead guilty, then we'll combine it to one act so you can get maximum five years. And because you plead guilty, we'll tell the judge, it's not up to us what sentence you get, but the judge will tell the judge she was going to give you the sentence that you should get on the low end of the range. So maximum you could get legally as five years. But we're going to recommend the judge that gives you one year or even less who knows maybe you'll only get probation. So let me think about that. I could get probation for 355 years in prison. And even if I do win the case, if I fight them in court, I need to have a few hundred thousand dollars to fight that. Even have a fighting chance because you use a public defender or as the private lawyers love calling them a public pretender. Yeah. I'm afraid that the public defenders are usually better than these private lawyers, whatever. Well, not to shit on public defenders. Yeah, they're busy with the private lawyers. Yeah, exactly. This is another issue with the system. The public defenders often have one to two hundred cases they're working on at any one time. Prosecutors have fiber tape. So the level of distraction and focus between the prosecutor's side and the public defender, it's just not equal. You're lucky if your public defender even knows your name, let alone the details of your case, you know, skill wise though, it's not fair to say public defenders don't know what they're doing. They're way more experienced a lot of the time than these other guys. But yeah, the level of focus that you're going to get, I mean, do you get better service in first class on an airplane or do you or an economy? It's not because the flight attendant's first class knows the job better. Yeah, I 100% agree. Not, you know, saying that the public defenders don't have their hearts in the right place and aren't skilled. That's not what I'm saying. I'm saying that the system is stacked against them. It's true. I just like to stand up for those types of attorneys because they're way more idealistic and frankly, I think you have to be. Yeah. And I went to law school with a bunch of those people and they were the best people in law school. The A-holes like me became podcasters or like, you know, went into private practice. Right. Look, I completely believe it. I think you have to be idealistic to be a public defender. But from a defendant's point of view, you get more attention. Yeah. The chance of going to prison for 355 years, I wouldn't feel comfortable being case, you know, 199 on a public defender's, you know, caseload. And if I wanted to get a private defender, then it cost two to three hundred thousand dollars, which I didn't, which I didn't have. So it wasn't really much of a choice. Even if I had the money, I probably wouldn't have the same choice, but I didn't even have the money. So, you know, I didn't have the money. So I didn't even really have a choice. But of course, I pled guilty and eventually F from pled guilty as well. Alex pled guilty as well. Ralph did a plea guilty. Actually, he went to court and he ended up using. Oh, yeah. So he got Ralph got sentenced to four years, you know, because he fought them. Yeah. Well, at least it wasn't 355 years. But he spent all like every penny he had, he spent defending himself in court. I think he spent like a million dollars plus. Oh, geez. Yeah. And I got very, very lucky. I went back to school. I started working at a nonprofit. I, you know, tried to say good move, man. What are you doing now, sir? Are you still in the arms business? Actually, I work at an orphanage for no money. It was actually a food bank. But yes, food bank. I wasn't even that far up. Yeah. It's like, I go to church every day, even though I'm Jewish and I go to synagogue and also, yeah, like I sweep the streets outside the school as a hobby. You know, when you have that kind of, when you have years of prison hanging over your head, you're going to do anything that you think even gives you some slight chance. So, you know, I told myself, there's no way I'm going to miss out years of my daughter's life, you know, for this, for every different role of all people. Not going to knock it down. Exactly. Exactly. This is the Jordan Harbinger Show with our guest, David Packaus. We'll be right back. This episode is also sponsored in part by Simply Safe. Spring is in bloom. You know, it comes next vacation season. But before you pack your bags, be sure to secure your home with Simply Safe Home Security. While you're basking in the sun, sipping on some piniacalatas, don't you want to be completely relaxed knowing that your property and belongings are safe? 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Guys, I want to give a shout out to one of my favorite YouTube channels. It's called the China show. It's run by two of my friends of La Y86 and serpent Z.A. Imagine picking those names a bunch of years ago and being like this will never be cringey Winston and sea milk. Really good guys. I guess it's another name. Sea milk. There's the story there. These are great guys. They lived in China for 10 years, 14 years respectively. They are incredibly versed with Chinese news. They do a roundup of things going on in China like AI and why people are going bonkers over ice cream, but also things like the Pentagon leak and what those documents have to do with Chinese policy. So it's not super nerd alert when it comes to in the weeds policies and politics, but it's really interesting. They try to keep it funny and light as well. I watch pretty much everyone of their videos that they put out, all these guys, especially the China show episodes. If you want to stay up to date on China, if you want to get an idea for the threat that the Chinese come in as party has or just get a really cool and funny look into Chinese culture itself, then I definitely recommend the China show. One recent video they did was on the state of AI in China and it just kind of devolves into this funny cultural critique. So definitely check out the link in the show notes. It's called the China show. You can literally just search for the China show on YouTube and you will find it. And let me know what you think. Good guys. Great show. Hey listeners, we want you to know how important it is to us to make sure you're hearing about brands and products that matter to you. And the best way for us to do that is to get your opinion. And we like to reward our listeners, which is why we're offering a $10 gift card for the first 150 people who fill out a quick survey. And I mean that quick at podcast one dot study. So please take a few minutes to visit podcast one dot study and tell us what you think. If you like this episode of the show, I invite you to do what other smart and considerate listeners do, which is take a moment and support our amazing sponsors. All the deals discount codes and ways to support the show are at Jordan Harbinger dot com slash deals. You can also always search for any sponsor using the AI chatbot on the website at Jordan Harbinger dot com slash AI. Thanks so much for supporting those who support the show now for the rest of my conversation with David Pac-House. So how do they catch ever? Man, I mean, he doesn't seem like a guy who learns from his mistakes. So I assume he's just like busy selling rockets and missiles and guns. So from, from probably, if I had to guess, he probably would have gotten maybe a year in prison just because he was the ringleader, but he pled guilty. So he's they also reduced his counts down to one, just like mine. But when he, he signed his plea agreement, the way it works, you plead guilty, you sign a plea agreement admitting to all your crimes and promise not to do any more crimes. And then the government promises the prosecutors promise to give a, a positive recommendation to the judge saying this guy's been cooperative and he feels really bad and he's a changed person. He'd be a good citizen for now on. So go easy on him, judge. But part of that agreement is you can't commit any more crimes before your sentence because if you commit more crimes, you know, the judge isn't going to lie. They can't tell the judge, hey, you know, go easy on him. From God for years. So what other crimes did this moron fricken commit after he pleased? This is like Billy McFarland from Fire Fest. Like, hey man, just stay out of trouble for one second. Cool. I'm going to go scam people with fake, yeah, I'll take it. It's be right back pretty much. Yeah, it is pretty entertaining, at least for me. I'm sure not for effort. But so what happened was they told them to stay out of the arms business while he was away at accepting, but of course he couldn't do that. He created some shell companies being run by like one of his new employees that he promised the world to who he replaced Daniel with. But of course, he's such a control freak. So he couldn't let his employees do all the talking. When it got down to it, he was trying to sell these magazines, these high capacity magazines to some gun dealer in central Florida in the Orlando area. And when it got real close to making this deal, Ephraim wanted to negotiate. And so he insisted that his employee put him on the phone as a consultant, right? And he gets on the phone and the guy he's talking to who's a gun dealer in central Florida realizes who he is and he Googles it. And he realizes, hey, this guy is in a lot of trouble right now. What if he, I assume this is what he was thinking? I don't know for sure, but I assume he was thinking, what if he's trying to entrap me into doing something illegal? That's a reasonable assumption actually. Yeah, a very, very reasonable assumption. This is pretty much how these things work. And so he calls up, so he's nervous and he calls up the ATF. Wow. Not wouldn't be my first call, but okay, I just be like, I don't know if I could go to the feds, but you know, whatever. Yeah, the ATF are the people who are responsible for licensing gun dealers. Oh, so he's probably, yeah. Look how good of a dealer I am. I'm proactive. Exactly. Like I'm being, you know, clean cut here. Yeah. You know, I don't want to get in any trouble. I want to make sure I'm not breaking any laws or regulations. So advise me what to do on this ATF. And the ATF is like, oh, that's so interesting that this guy wants to do business with you. Why don't you keep on talking to him and why don't you introduce one of our undercover agents as your partner. And so the undercover agent gets on the phone with him and he says to F from, you know, I'd love to do this deal with you. I really, you know, I'm the kind of guy who really has to meet someone in person and shake their hand and look them in the eye before I could do a deal. Okay. Why don't you come up to Orlando and we'll shake on it and do this deal. And F from's like, yeah, totally understand him like that kind of guy. I'm that kind of guy too, you know, so sure I'll be up there, you know, this weekend, we'll shake on it and, you know, do this deal. And so F from goes up to Orlando, which breaks the conditions of his prop, uh, uh, probation or his, yeah, or his, yeah, or whatever his bail, exactly. And, you know, he was not allowed to leave the Miami date county. And so he goes to Orlando, which is, it breaks his, the conditions. And he meets this undercover ATF agent and the agent tells him, hey, you know, I just picked up this cool new HK handgun. It's the newest thing on the market. Check this out. And F from's like, oh, I heard about that. That's so cool. I've been wanting to try those out. Hey, give me that. Let's go to a range. Huh, let's go shooting. And, and he like picks up the, you know, the ATF hands him the gun. He's like, let's go shooting. And, and then he tells the ATF agent, it's like, what can I say? You know, once a gun runner, always a gun runner. Am I right? Yikes. Right. And right after that, right, right after that, the ATF agent slaps Kufzad and he says, you're under arrest, you're a felon in possession of a firearm. Oh. Because he has a red guilty, which makes him officially a felon. And if you're a felon, if you have, if you're in possession of a firearm, you can get up to 10 years of bruising. So they arrested him. They told the judge, hey, this guy's a flight risk because he already did respect the conditions of the bail he's on. Sure. So why should we give him bail for this and the judge agreed. And so they kept him in county jail, actually, in central Florida for like a year. Oh, wow. Like Ralph's trial was getting worked out. And eventually, I think after a year, he got sentenced. He hired the best lawyers in Miami. He spent, I heard from somebody, spent like $2 million on his lawyers over the course of like three years. Oh my God. That's insane. I mean, these guys were hardspensive. I mean, I, I, Roy Blacks, Furman. He's like one of the most famous lawyers in Miami. I think he doesn't even like talk to you unless you put down a million dollar retainer. Wow. Okay. And he got the best lawyers in Miami. I mean, he could have gotten 15 years total five for the fraud charge and 10 for the gun charge. But he, his lawyers convinced the judge to give him a combined sentence of four years. Man, it's so classic, right? Like he can't help screwing people over, screws over the guy, gets the New York Times piece written. That's what exposes everything. Get some in trouble. Hey, you can't do this. Well, nobody's going to tell me what to do. There's no consequences that I'm going to have ever faced. Yeah. And he's like, Shakespearean in that the gun is also his undoing at the end of the day, right? Yeah. It's great out of a movie. The whole once the gun around her always, it's just like, you know, he's got his movie Hollywood line right at that critical point. It's, it's like almost made for the screen. Yeah. It's like watching blow with Johnny Depp where they look, man, I feel so bad. We have to arrest this guy. And he's like, where's my knife, right? It's like the same thing. Yeah. Do you think if you'd made all that money in that deal that you would have actually quit being a arms dealer, or would you just keep going? I mean, we in Law and Wall Street, we say golden handcuffs. You're like, I'm done after this. And then you're like, except I'm got the sweet boat and the house in the end of it. And my wife likes sending the kids to the super private expensive private schools. Maybe I'll work for a few more years. I mean, it's, yeah, you're not going to quit if you made 15, 20, whatever million on a deal. You're not going to. I would have to agree with you. I mean, I, you know, my plan was always to quit. My plan was five to 10 million. That was my number, you know, like I thought above five million, I'm probably set for life as long as I don't spend ridiculous money. And you know, 10 million, I'll be really set. And I could, you know, maybe use half a million and start jumpstart a music career. That was my dream because I'm a musician. I play guitar. I'm a singer. I write songs and, you know, I realize that you need money to have any sort of promotion and to get out there. And so my dream was I was going to make a bunch of a few million dollars and use some of that money to jumpstart a music career. But in reality, when I think about it, I'm like, I don't know, man, you know, like if I had made 10 million dollars and I had 50 million dollars coming, if I just stuck out one more year, would I really not stick out one more year and make another 50 million? Yeah, I mean, it's just... And then once you make that 50 million, are you going to not stick another year and make another 100 million? You know, it's just like it never ends. So I have to say that in retrospect, I'm actually really happy with how things ended up going. And I had a real kick in the ass and it really, really showed me what was important in life and set me on a much better path, which I'm much happier on now. Do you mind if I ask how much you actually made as an arms dealer? It's embarrassing to say. That's good. Then, people won't do it. You know, come on. That's the point. Well, I mean, I would have made a lot if I hadn't been screwed over, but in the end, in the end, I actually only pulled out, in fact, it's so embarrassing to say, but I only pulled out about $30,000 out of the whole thing. Oh my God. You would have been better off working at Chipotle or something like that. I would have. And the reason for that was, it wasn't that I didn't make any money. It was that Ephraim insisted on rolling the money I made into the next deal. So he was like, hey, I'm using my money to fund this. So why don't you know, you're making money on this contract? So why don't we use some of your money to fund this? So he kept them. He never let me pull the money out, which should have been an obvious clue that he never really intended to pay me. But he kept them rolling the money into the next deal to the next deal. But the next deal, so by the time that he ended up screwing me, that was like all of them. Yeah. No, it makes sense. I mean, I wouldn't even be that embarrassed about it. You're literally like a kid. And also you were being taken advantage of by somebody who manipulated the governments of multiple countries. It's not like. That's true. And you're probably getting fleeced when you should know better. Twenty-twenty hindsight, of course. Like, oh, he wanted me to do this. That was the first red flag. I don't know, man. I wouldn't be so hard on yourself. Well, I mean, I'm over it. Fifteen years will do that. Yeah, of course. Look, yeah. What are you doing now? Because actually, I want to know what you're doing now, and if any arm dealer skills overlap with it. But also I think what you're doing now is awesome. Thank you. Thank you. Actually, it's an interesting story of how I got into my current business. Well, I'll give you a slightly longer version. Yeah. Because I know what you're talking about, which we'll get to. But the first, so what happened was the way I got into my current business is I was under, this actually led directly from the whole War Dog story. I was under house arrest. I got seven months of house arrest, which is a breeze. I mean, I have no complaints about that. Even now, and now in the days, I'm basically under house arrest right now. I got two little kids in DoorDash. Exactly. That's fine. Sign me up. Yeah, yeah. It's a million times better than prison. Sure. That's for sure. So I was staying home for seven months, and I was playing a lot of guitar. And I really missed playing with the drummer because the drums give the music, the energy, and you dance to a beat. But I could obviously couldn't go to the studio because I couldn't leave my house and no drummer was going to. Yeah. I'm under house arrest. I can't make the meeting. Yeah. That's a valid excuse. And of course, no drummer had a few friends who were drummers, but they wouldn't kind of like pack up their entire drum set into a van and bring it over my apartment. And there's barely any room in my apartment at the time for a drum set. And even if we did, it would wake up the entire neighborhood. So it wasn't exactly something I could do. So I bought a drum machine, which is like for those who don't know, it's like an electronic device that is a tabletop thing. It has a bunch of buttons. Each button makes a different drum sound. You could tap the buttons to make a beat and it plays it over and over in a loop. And then, you know, aside to make beats and I play it, but my guitar to it, but every time you can make different beats on it, but every time I wanted to change the beat on the drum machine, like when you go from like verse to chorus, the beat changes, I'd have to stop playing my guitar. Oh, yeah. Press a button on the machine. Blame. And go back to playing my guitar. Exactly. It interrupted the flow of the music. So I thought, man, I really need like a hands-free drum machine, a drum machine in the form of a guitar pedal, like, you know, something I could tap with my foot. Guitar pedals are a common device that guitars use to create a sex on their guitars. So like, you know, like when you change the sound of the guitar from like clean to distorted, it's most of the time you're hitting a guitar pedal and it changes the sound. So I thought, I need to combine the drum machine and the guitar pedal. And I went online to look for it and I couldn't find anything. I asked my musician friends and they're like, never seen anything like that. But if you find it, let me know because I want one too. That sounds super cool. And so if I, nobody's making it, everybody wants it. This is going to be my, my, my ticket to redemption here. Sure. And so it took me three years, but eventually I got a working prototype. It's called the beat buddy. This thing is, as Gizmodo says, a genius idea. Yeah. I love that line. I mean, yeah, you can dine out on that one. Exactly. It's a pedal that you can press with your foot, goes on the floor and it moves according to the beat. And when you tap it, it does like a drum fill. If you hold down the pedal, it does a transition. When you let go, it goes to the next part. So you can go from like verse to chorus back to different parts. And you could also plug in. It also has a thing you can plug in more buttons to have more capabilities. Oh, very cool. Like a midi control and whatnot. Exactly. It stops midi control. So yeah, so that's, that was my first product came out in 2014 and it became a very big success in the musical world. I had some of my musical idols that did up buying it. Super cool. Really? That's friggin cool. That was to felt great. Yeah. It was amazing. It's actually, so one of my favorite bands that I grew up learning to play guitar was Alice and Chains. Oh, I love Alice and Chains too. Yeah. Yeah. People are going to be like, what? Jordan likes Alice and Chains. Yeah. That's going to surprise a lot of people in there. So Mikey Nez, the basis of Alice and Chains came up to me at like our second trade show in 2015 and he was like, oh, you make the beat buddy and I'm like, yeah, he's like, yeah, I just bought one two months ago. I've been writing all my new music with it. Wow. And I was like, dude, I learned to play guitar listening to your music. Yeah. That's super cool. It's so friggin cool. So cool. You're much smarter than they made you look in the movie. Do you get that all the time? Well, thank you. I appreciate it. People have said that. Yeah. I also get that a much more handsome than they portray me in the movie. I say I have way better hair. I'll leave that up for a bit. Yeah. I like that. Like, holy hollywood could give me a full head of hair. That's right. So. But yeah. Yeah. Thank you. I do appreciate that. I mean, you know, the movie they changed a lot. I love the invention. I was actually talking about the other one that I is going to change the world. You know, the guitar thing is cool, but this stand back everyone. Yeah. Yeah. So this is what I actually am really excited about now. That was the reason I mentioned that was because that was my first invention. Sure. And since then, I've come out with six other products, musical products. I don't know if we have time to get into them, but like I just very short one. This is the simplest one. It's a product that organizes your cables. She's called a cable. Excel. How does that not exist already? Yeah. That's amazing. I was playing some shows and I had like seven cables and it was taking me forever to wrap it around my arm. And I was like, I just need like a freaking table and, you know, a wheel and boom. That's one of those that's so because you go, how does, wait, that doesn't exist. Okay. And you make it and immediately everyone needs it who uses that. Exactly. So that's our simple version. We also came out with the world's most advanced looper pedal for the musicians. They'll know what I'm talking about a looper pedal. So it's a common thing, but we came out with, it's like almost like a digital audio workstation in a looper pedal. It's like a hybrid of like pro tools or logic. We can link to the singular sound site and the show notes as well. But show me the InstaFlas man. That's where I'm like, I don't want to floss my teeth again after this interview. The InstaFlas as you mentioned is the first product that is not music related. I came up with this with my brother and we were eating mango and you know, mango gets all those fibers stuck in your teeth. And so we were flossing our teeth afterwards and we're like, man, this is such a pain in the ass. I wish we had a machine that could floss our teeth for us. Yeah. No kidding. Because everybody hates the floss. So we started batting around ideas and eventually we came up with this. It's called the InstaFlas and it's like a improved version of a water pick water floss or the difference between this and a water pick. A water pick is a single jet of water that you have to trace your gun line both the top and the bottom and the inside which is very difficult to do from behind your teeth. And you also have to keep it at an exact 90 degree angle to the tooth. So what we did was we created this like eight shaped manifold and it has 12 jets of water instead of one and they shoot from the sides. So all you have to do is bite in this terms as well. So all you have to do is bite in over here and you're done in 10 seconds. You just sweep it across. I know people are like, wait, is Jordan kidding about this? I want, first of all, you have to send me one of those. Of course. I will absolutely use it every single day because I floss. I hate doing it. I do it every night. I try to do it in the morning but I'm too effing lazy because I just woke up. It just looks way better and way more efficient. I want one for my kid. You probably don't have kid sizes yet. Not yet, but we it is on the miracle to make that. And I'm thinking like, oh, what if we don't need to throw plastic string in the toilet or which are not supposed to do or in the garbage anymore every night? And then I'm going to throw it on my dirty fingers. Of course, I wash my hands but I'm still shoving my fingers in my mouth. Right? Like it's all thing. Yeah. Instead, I have this device that actually does it even better and works in 10 seconds instead of five minutes or however long it takes me to floss while I'm watching YouTube. Exactly. Really good. I'm definitely, I'm not kidding. I'm emailing you my mailing address after this for example, one of those things. Yeah, please do. I'd be happy to send you one. Thank you very, incredible story. Thanks so much for coming on the show, man. I hope we sell enough Insta floss to have made this worth your time. I think we'll probably we'll. I hope so too. Yeah, thank you. Yeah, yeah, yeah, anyone who wants to see it can go to Insta floss.com. It's like Instagram, but floss Insta floss.com and you can see we have a video showing how it works and you could also order it. We're actually in the middle of producing it right now, the first production run and we are going to deliver the first units to customers in June. David, thank you very much, man. Really appreciate it. My pleasure. My pleasure. Thank you. I've got some thoughts on this episode, but before we get into that, here's a preview of my conversation with an expert who spent more than two decades rooting out the counterfeit goods and services that fuel a trillion dollar industry that only benefits petty crooks and organized crime networks. It's not just handbags or designer clothes, alcohol, makeup, even cancer medication are just the tip of the iceberg of what gets counterfeited. Here's a quick listen. Anything and everything is counterfeit from automobile parts, cancer medication, alcohol, kids cough syrup. I mean, anything that somebody can fake to make money, they're going to do it. I mean, we found human feces, rat feces and carcinogens in some of the counterfeit makeup. It's really, really scary. I mean, people can actually die. I really get harmed over this stuff. The general public thinks, oh, it's poor people just trying to get by, trying to make a living, but somewhere down the chain, a criminal organization is involved in that counterfeit item. The counterfeit goods is actually listed in Alcatas training manual on a quick and easy way to raise revenue for operational purposes. Because why? It's a crime that's completely worth doing for them where they can make huge amounts of money. And then let's look at the human impact. Where are these goods made? Chinese kids and these factories in the middle of nowhere, there was an investigator online who said he was about to do a raid with the police and he heard children's music and he thought, oh, wow, they have child care for their workers. And then when they came in, they found a bunch of kids at sewing machines, handcuffed to the machines and he said the smell was unbearable because they weren't allowed to go to the bathroom. The common perception, oh, it's poor people just trying to get by or trying to make a living. It's really not the case. I mean, this stuff's tied to organized crime, criminal cartels. I mean, there's a whole big picture behind this stuff. You will see law enforcement decisors where they're 0.3 million cash out of someone's house. And that's all the proceeds from counterfeit goods. When you're buying that item, you are contributing to that child labor. You're contributing to that terrorist organization. That is where the money is going undoubtedly. Even if you don't care that the Gucci bag you got for just 20 bucks can't be spotted as a knockoff by the snoodiest in your circle of friends, here why the trillion dollar counter fitting industry should concern you. Check out episode 308 of the Jordan Harbinger Show with Chris Buckner. A lot here, but I don't want to make the episode any longer than two parts with my giant clothes. This kind of business is a feast or famine sales cycle because you can bid on 100 contracts. You can lose all of them and you get one that's like $100 million and that's your income for the whole year. Of course, you're only getting a percentage of that. It's like any sales cycle for any big B2B company, although they made way less money doing this than they would have if they were not cutting corners everywhere. As you probably heard or picked out from the show, the Albanian ammo turned out to be Chinese. Albania is a crazy place. I've been there, really great people, cool food, everything, but they had a dictator named Enverhoja and he pulled out of the Soviet Union or at least the agreement with the Soviet Union and he was convinced that the West was going to invade and the Soviets were going to invade. So he built something like 800,000 bunkers throughout the country and you can still see them. They're filled with garbage and water and dirt and they'll be in the middle of a farm field and all along every road and they cost as much as an apartment to build because they were really, really fortified and had a communication system in them and everything absolutely wild. These bunkers are again, they're still there. There's gun emplacements and places where you can shoot out of. He expected total war, right? Every man, woman and probably child in the country to be fighting the Soviets and or the West at the same time, NATO at the same time. It's just a really interesting factoid about well, unchecked cookie power in a dictatorship like Albania and that's where they had gotten that ammunition and it turned out to be from China and oops, the consequences thereof. I love stories like this. If you guys know anyone I should talk to who's the subject of a book or wrote a book or a subject of a movie then definitely suggested to me, especially if you're able to introduce me to them. Big part of the show is fan guest suggestions. I always appreciate it and I hope you enjoyed this conversation as much as I enjoyed it as well. I thought it was a trip. All things David Packhouse will be in the show notes at jordanharbinger.com or ask the AI chatbot transcripts in the show notes, advertisers, deals, discount codes, ways to support the show all at jordanharbinger.com slash deals. Please consider supporting those who support the show. I'm at Jordan Harbinger on Twitter and Instagram. You can also connect with me on LinkedIn and speaking of connection, the best things that have ever happened to me in my life and business have come through my network and I'm teaching you how to build the same type of network for yourself in our six minute networking course. It's 100% free. It's not shmuzi. It's not gross. It's free on the thinkific platform at jordanharbinger.com slash course. It really just takes a few minutes today. I spend like two minutes a day doing this stuff. Maybe not even that. I wish I knew this stuff 20 years ago. It's changed my entire life, my business, everything. Dig that well before you get thirsty folks. Build those relationships before you need them. Jordan harbinger.com slash course. The show's created an association with podcast one. My team is Jen harbinger, Jason sanderson, Robert Fogarty, Millie Ocampo, Ian Beard, and Gabriel Mizrahi. Remember, we rise by lifting others. The fee for this show is you share it with friends when you find something useful or interesting. The greatest compliment you can really give us is to share the show with people you care about. So if you know somebody who'd be interested in a story like this, love the movie war dogs, read the book, aspiring arms dealer, maybe share this episode with them. In the meantime, I hope you apply what you hear on the show. So you can live what you learn and we'll see you next time. Finding great candidates to hire can be like, well, trying to find a needle in a haystack. Sure, you can post your job to some job board. But then all you can do is hope the right person comes along. Which is why you should try Zipper Cruder for free. At zippercruder.com slash post. Zipper Cruder doesn't depend on candidates finding you. It finds them for you. It's powerful technology identifies people with the right experience and actively invites them to apply to your job. You get qualified candidates fast. 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