The Real “War Dogs” Story: How a 22-Year-Old Helped Win a $300 Million Pentagon Contract

David Packouz wasn't the struggling massage therapist portrayed in War Dogs. When he reconnected with Efraim Diveroli, David says he was 22, studying chemistry, running profitable import businesses, and had approximately $100,000 saved.

Then Efraim, just 18 years old, showed him a bank balance of $1.8 million. David realized his old friend had discovered a lucrative opportunity: supplying the U.S. government.

Their partnership would eventually lead to a $300 million military contract, a financial dispute, and a federal investigation.

David Was Already an Entrepreneur

David began importing inexpensive SD cards from China before expanding into supplies for nursing homes. Contrary to the movie, he was already financially comfortable.

Meanwhile, Efraim had learned government contracting from his uncle and developed a talent for negotiating profitable deals. David watched him negotiate a potential $20 million Xbox transaction, which ultimately fell apart when investors rejected it.

Efraim then introduced David to military contracting.

Entering the Government Contracting Business

Efraim taught David how to bid on government contracts. Within six weeks, David won his first fuel contract, earning approximately $8,000.

They expanded into military equipment and ammunition, with David sourcing suppliers while Efraim managed financing and negotiations.

For their largest opportunity, David says they agreed he would receive 25% of the profits.

Winning the $300 Million Afghanistan Contract

In 2006, the partners discovered a government solicitation to supply ammunition and military equipment to Afghan forces.

David spent months finding suppliers across Eastern Europe and calculating transportation costs. Despite considering their chances slim, their company, AEY, won the contract.

The potential value was approximately $300 million. After receiving smaller initial orders, a subsequent order worth roughly $50 million confirmed the scale of their opportunity.

Two young businessmen were suddenly handling military contracts worth tens of millions.

The Chinese Ammunition Problem

A major complication emerged when their employee discovered that ammunition sourced from Albania appeared to have been manufactured in China.

Their contract specifically prohibited Chinese ammunition.

According to David, Efraim decided to repackage the ammunition, removing Chinese markings and documentation. Although lighter packaging reduced shipping expenses, concealing its origin violated contractual restrictions.

Emails discussing the repackaging later became critical evidence in a federal investigation.

Efraim Attempts to Cut David Out

As the contract progressed, Efraim proposed replacing David's agreed 25% profit share with a $100,000 salary and 1% ownership in AEY.

David refused, believing the change could cost him millions.

Their partnership collapsed, leaving David financially vulnerable despite helping secure the contract. He had been living largely on savings, had a six-month-old daughter, and hadn't received his expected profits.

Eventually, he negotiated a settlement worth several hundred thousand dollars. Before it could be finalized, federal agents raided AEY.

Federal Investigators Discover the Evidence

David learned about the raid when an employee reported agents seizing computers and documents.

Although the original complaint reportedly involved another issue, investigators discovered a handwritten list referencing the Chinese ammunition repackaging. Emails uncovered during the investigation further documented the operation.

Facing serious legal consequences, David consulted an attorney and decided to cooperate with authorities.

He says his damaged relationship with Efraim and limited financial resources influenced his decision.

The Scandal Becomes National News

Months later, The New York Times published a major investigation featuring the young contractors and photographs of the ammunition.

The scandal reached congressional hearings, where lawmakers questioned how such inexperienced businessmen had secured contracts worth hundreds of millions.

The Army canceled the contract, and federal charges followed against Efraim, David, and others.

What began as an extraordinary business opportunity had become a nationally publicized government-contracting scandal.

Was Efraim Really Like Jonah Hill's Character?

David says Jonah Hill portrayed Efraim more favorably than reality.

He describes Efraim as an exceptional negotiator obsessed with winning, sometimes arguing over insignificant amounts of money.

According to David, Efraim's greatest weakness was prioritizing individual negotiations over maintaining valuable relationships.

What War Dogs Changed About the True Story

David acknowledges that the movie captures the overall experience but changes several details.

The relationship drama was largely fictional, and the famous suitcase of cash never happened.

The dangerous drive through Iraq's "Triangle of Death" was based on a real experience, but it happened to screenwriter Stephen Chin rather than David and Efraim.

The Bigger Lesson: Winning Deals Isn't Everything

The real War Dogs story demonstrates how extraordinary business success can collapse through dishonesty, poor judgment, and damaged relationships.

Efraim excelled at finding opportunities and negotiating profitable deals. However, according to David, he repeatedly sacrificed long-term relationships for immediate financial advantages.

When David's share became worth millions, Efraim allegedly began treating his partner as an expense rather than someone who helped build the business.

Efraim knew how to win enormous deals, but his failure to consider the long-term consequences ultimately helped destroy what he had built.

Watch the full video here at the Matthew Cox Youtube Channel