Efraim Diveroli: 1-3-11 Sentencing Hearing Transcript, Diveroli

Case 1:08-cr-20574-JAL Document 1052 Entered on FLSD Docket 01/10/2011 Page 1 of 70
UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA
MIAMI DIVISION
CASE NO. 08-20574-CRIMINAL-LENARD
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UNITED STATES OF AMERICA,
Plaintiff,
Miami, Florida
January 3, 2011
vs.
4:53 p.m. to 7:10 p.m.
EFRAIM DIVEROLI and AEY, INC.,
Defendants.
Pages 1 to 70
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SENTENCING HEARING
HELD BEFORE THE HONORABLE JOAN A. LENARD,
UNITED STATES DISTRICT JUDGE
APPEARANCES:
FOR THE GOVERNMENT:
ELOISA FERNANDEZ, ESQ., and

FRANK TAMEN, ESQ.
ASSISTANT UNITED STATES ATTORNEYS
99 Northeast Fourth Street
Miami, Florida 33132
FOR THE DEFENDANT

EFRAIM DIVEROLI:
HOWARD SREBNICK, ESQ.,

BLACK, SREBNICK, KORNSPAN & STUMPF, PA
201 South Biscayne Boulevard
Suite 1300
-andCYNTHIA HAWKINS, ESQ.
150 North Orange Avenue, Suite 414
Orlando, Florida 32801
FOR THE DEFENDANT

AEY, INC.:
HY SHAPIRO, ESQ., and

MARKO CERENKO, ESQ.
HOGAN, GREER & SHAPIRO
2400 South Dixie Highway
Suite 200
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FOR US PROBATION:
SARA GARCIA
REPORTED BY:
LISA EDWARDS, CRR, RMR

Official Court Reporter
400 North Miami Avenue
Twelfth Floor
(305) 523-5499
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THE COURT:
United States of America versus AEY Inc., and Efraim
Good afternoon.
You may be seated.
Diveroli, Case No. 08-20574.
Good afternoon, counsel and Probation.
State your appearances, please, for the record.
MS. FERNANDEZ:
Eloisa Fernandez and Frank Tamen on behalf of the
Good afternoon, your Honor.
United States, along with Special Agent Bob Koons.
THE COURT:
Good afternoon.
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MR. SREBNICK:
Good afternoon, Judge.
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Howard Srebnick on behalf of Efraim Diveroli; Hy
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Shapiro on behalf of AEY, Inc.
Also with us, Attorney Marko
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Cerenko, Attorney Cynthia Hawkins, who represented Mr. Diveroli
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in the Orlando matter.
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THE COURT:
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MR. SHAPIRO:
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THE COURT:
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THE PROBATION OFFICER:
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Sara Garcia with probation.
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THE COURT:
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Good afternoon.
Good afternoon.
Mr. Diveroli is present.
Good afternoon, your Honor.
Good afternoon.
And Happy New Year to
everyone.
We are here for the sentencing of both the corporation
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AEY, Inc. -- and does Mr. Diveroli also represent the
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corporation, Mr. Shapiro? --
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MR. SHAPIRO:
Yes, your Honor.

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THE COURT:
-- and we're here on the sentencing of
Mr. Diveroli as an individual.
Mr. Diveroli, have you read the advisory presentence
investigation reports for both the corporation and for yourself
individually?
THE DEFENDANT:
THE COURT:
Yes, I have, your Honor.
And have you and your attorneys discussed
the advisory presentence investigation report for the
corporation and for you individually?
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THE DEFENDANT:
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THE COURT:
Yes, we did, your Honor.
My examination of the file indicates that,
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in both of these cases, there are no objections filed.
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correct?
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MR. SREBNICK:
Is that
Actually, there was one objection to
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the acceptance of responsibility issue.
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to the Probation Office, and it is documented in the addendum
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to the PSI.
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THE COURT:
Okay.
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acceptance of responsibility.
That was communicated
So there's an objection regarding
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Is that the only objection?
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MR. SREBNICK:
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THE COURT:
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MR. SHAPIRO:
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THE COURT:
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MS. FERNANDEZ:
Yes.
No objections from the corporation?

No, your Honor.
From the Government, any objections?
No objections.
We just agree with the

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Probation Office not to grant the -THE COURT:
All right.
Well, I'm going to let
Mr. Srebnick make his argument in regard to acceptance of
responsibility.
Mr. Srebnick, go ahead.
MR. SREBNICK:
I'd like to present for the Court's consideration
Good afternoon, Judge.
Mr. Diveroli himself; his psychologist, Dr. Strumwasser; Rabbi
Sholom Lipsker; and his uncle, Rabbi Shmuley Boteach, to
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comment on Mr. Diveroli's acceptance of responsibility not only
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for the crime for which he stands before you, but for the
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lifestyle that he has chosen to live up to today.
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And if we could begin, then, by having Mr. Diveroli
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himself address the Court, if that would be acceptable to your
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Honor, and he approach the podium.
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THE COURT:
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MR. SREBNICK:
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Would you like him to stand, Judge?
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THE COURT:
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THE DEFENDANT:
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He can stay right there.
No.
As you wish.
That's fine.
He can remain seated.
With your permission, I'm going to
read from my notes.

Your Honor, thank you very much for allowing me to
speak for a few moments.
I can quite honestly say that, after five months of
incarceration, they've been very eye-opening for me.
I can

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finally begin to appreciate the devastating effect that my
selfish actions have caused upon me and my family.
My young brothers, my sister, who looked up to me so
much, I now realize that, instead of the big brother taking
them bowling or out to eat, they'll be forced to visit me in a
federal prison.
And my beautiful mother, my biggest fan, my father and
the rest of my extended family -- there are no good words to
express how truly and deeply sorry I am for dragging them
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through the hell that has been my life the last three years.
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And to think it was all for a little bit of money, which I
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didn't deserve or need, is even more shameful.
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It is clear to me that, in prison, you are nobody.
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And whatever material success I may have enjoyed on the
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outside, it is completely meaningless in here.
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In here, I'm just another convict, a number, an
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embarrassment to my family and my community, so much so that,
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when the occasional prison guard looks at my paperwork and
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says, "Wow, how did you get such a large contract with the
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Army?", I have no answer.
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But I think about how hard I worked and how devoted I
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was to winning that contract, performing on it and not failing,
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to prove to myself and my family that I could be a success.
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I had choices to make.
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twice, I made the wrong choice.
More than once, more than

I chose to ignore the

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direction of the State Department when I asked about the
legality of shipping Chinese ammo.
of a firearm in Orlando even though I knew I shouldn't have.
I can blame alcohol.
other additions of mine.
can only blame myself.
I chose to take possession
I can blame drugs.
I can blame
But after five months in prison, I
I say this because now I've begun to realize that
business success, although once everything to me, doesn't hold
a candle next to me being back with my family, my religion.
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I'd like to apologize and, at the same time, say thank
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you to Dr. Strumwasser, Rabbi Lipsker and my attorneys, who I
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know tried their absolute best to intervene in my life as best
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they possibly could in the past few years regardless of how
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frustrating and fruitless their efforts may have seemed.
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Finally, I would like to apologize to the Court and
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the Government for consuming so much of your time and
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resources.
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US Army financially or otherwise, I certainly could have done
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things differently.
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Thank you.
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MR. SREBNICK:
Although it was never my intention to harm the
Your Honor, I'd like to turn the podium
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over for the moment to Mr. Shapiro for some comments he would
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like to make on this subject.
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MR. SHAPIRO:
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THE COURT:
Your Honor, may I stand at the podium?

Sure.

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MR. SHAPIRO:
Thank you, your Honor.
Your Honor, AEY, through its president, Mr. Diveroli,
and Mr. Diveroli individually has fully cooperated with the
Government and, indeed, accepted responsibility for his
actions.
He met on no less than 25 occasions with the agents
from the United States Government who were investigating this
case after he entered his plea.
He spent hundreds of hours with them going over
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evidence, going over e-mails, going over information that he
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was going to provide and was prepared to provide at the trial
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of Mr. Merrill.
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He explained how, as a 21-year-old president, he was
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able to secure a 300-million-dollar contract and how he gained
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employment from the United States Government to help the United
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States Government build the Afghan National Army.
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He went on fedbizops on a computer and found that the
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Government was soliciting bids for this overwhelmingly large
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contract.
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He told the Government how many hours he worked and
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how hard it was to put together all of the munitions that were
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needed in order to satisfy this contract and to win it.
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He told the Government how he traveled to multiple
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countries -- to Albania, to Germany, to France, to the United
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Kingdom, to Yugoslavia, to Bulgaria, to Montenegro, to

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Slovakia, to Hungary, to Ukraine, Romania and the Czech
Republic -- in order to secure the ammo that the Government was
seeking in this contract.
He told the Government how he was able to secure the
various task orders that were required.
It is Task Order 2,
your Honor, that I've always found to be most amazing in the
two years of my representation of AEY and Mr. Diveroli, where
Mr. Diveroli was asked to secure and to deliver to Afghanistan
over 100 million rounds of AK-47 ammunition, over 550 grenade
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launchers with HE impact, over 550,000 HE bounding grenade
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launchers, 16,200,000 ball ammunition.
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He talked to the Government and he told the Government
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how he was able to contact foreign governments and to be able
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to secure those arms for delivery.
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And he told them how he first found out that the
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ammunition that he was sending from Albania was Chinese.
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Originally, it was Albanian-manufactured ammunition, but the
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Albanians ran out of that ammunition and, instead, he learned
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from Mr. Podrizki that the ammunition was Chinese.
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He sent e-mails, as your Honor knows, to the State
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Department to find out whether or not it was permissible.
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Honor is aware of the response.
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Your
They told him it was not.
He had two choices to make:
the right one or the
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wrong one.
And, unfortunately, he chose the wrong one and he
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decided to send the Chinese ammunition.
He told the Government

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how that came about.
admitted that to the Government.
And he chose to violate the law, and he
But Mr. Diveroli did not want to fail.
want to disappoint.
want to fail his friends.
to provide what the Government had asked him.
He did not
He didn't want to fail himself.
He didn't
He didn't want to fail in being able
He also told the Government about the involvement of
Co-Defendants Podrizki, Packouz and Mr. Merrill.
your Honor, he was prepared to testify at Mr. Merrill's trial,
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And, in fact,
despite the arrest in Orlando.

And, your Honor, but for that arrest in Orlando, I
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believe we would be standing here discussing what the
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appropriate sentence for a 5K1 or a Rule 35 would be.
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Instead, Mr. Diveroli made the wrong decision.
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Unfortunately, he got arrested again in Orlando.
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prepared to cooperate.
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But he was
So I suggest to you, your Honor, that AEY, its
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president, and Mr. Diveroli have cooperated fully and have
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accepted responsibility for what he's charged with today.
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Thank you.
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MR. SREBNICK:
And so, your Honor, it is clear that,
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with respect to the instant offense for which he stands before
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the Court, Mr. Diveroli has acknowledged his responsibility,
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pled guilty, cooperated.
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his plea in the Orlando case, there would be little doubt that
But for his subsequent arrest and now

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he would qualify for acceptance.
And so this is the rare case where we're going to ask
the Court that, notwithstanding a subsequent act which violated
the law, the holding of a gun brought to this meeting in
Orlando by an undercover agent and Mr. Diveroli takes
possession of it and, therefore, violates the law, that the
Court nevertheless award him the acceptance.
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And we'd like the Court to hear for a few moments and
we would request that it be at side-bar, if possible, from
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Dr. Steve Strumwasser regarding Paragraphs 67 through 81 of the
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PSI which documents mental health and substance abuse issues.
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It would seem to me that, since the PSI is
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confidential and since those matters are deemed confidential,
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that we address them at side-bar, of course, with the
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Government present.
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I would request permission to approach with Dr. Strumwasser and
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the Government counsel.
If that would be acceptable to the Court,
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THE COURT:
What's the Government's position?
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MS. FERNANDEZ:
Your Honor, with respect to these
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paragraphs, I thought most of this became part of the public
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hearing before Judge Turnoff on the Defendant's prior violation
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of conditions of release, unless it's something specifically
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new.
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MR. SREBNICK:
There are some family issues that we
think are best addressed in private, Judge.

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THE COURT:
acceptance of responsibility?
Well, how does this all relate to
MR. SREBNICK:
I think Dr. Strumwasser, who worked
with Mr. Diveroli for two-plus years, could explain to the
Court, in his professional opinion and that of the other
doctors he's collaborated with, the kind of struggle that
Mr. Diveroli day in and day out has to overcome to accept
responsibility for his own addictions and his own mental health
issues and how it makes it infinitely more challenging for
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someone with his condition to manage his own conduct and
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behavior.
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And it's certainly Mr. Diveroli's failure to manage
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his behavior while out on bond that will be the linchpin in
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depriving Mr. Diveroli of the acceptance-of-responsibility
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adjustment, and it is for that reason that I would ask that the
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Court hear from Dr. Strumwasser, for what it's worth, as to his
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view of the Mr. Diveroli that sits before the Court today in
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2011 versus the Mr. Diveroli he's been working with for over
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two and a half years to try to help Mr. Diveroli manage these
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very difficult circumstances in terms of addiction and mental
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health issues.
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THE COURT:
I will grant the request to have this
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matter heard in a sealed portion of this hearing.
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I don't want to do it side-bar.
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It really makes it
much too difficult for Lisa on an extended basis for her to be

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able to get everything down.
It's just not the ideal way.
So I'm going to order the courtroom to be sealed at
this time except for the Defendant, his counsel and the
Government counsel and the witness.
MR. SREBNICK:
THE COURT:
(Whereupon, certain sealed proceedings were held and
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I think with that --
The courtroom is now sealed.
have been filed under separate cover.)

(Whereupon, the courtroom was duly unsealed and the
follow proceedings were had in open court:)
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THE COURT:
Yes, Mr. Srebnick.
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MR. SREBNICK:
Go ahead.
Judge, I think the question posed
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regarding why Mr. Diveroli, while on bond, would put his bond
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at risk and sentence at risk is the question.
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I agree.
I'd like to just have Ms. Hawkins, who represented him
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in Orlando, address the Court very briefly right from there
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just so she can answer a question or two and address the Court.
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MS. HAWKINS:
Cynthia Hawkins.
May it please the Court:
My name is
I'm a criminal defense lawyer in Orlando.
Before that, I was an AUSA for 20 years plus in the

Orlando office in the Middle District.
I represent Mr. Diveroli in the case that occurred in
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the Middle District, and I think I have some information that
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would assist the Court in this -- in the determination of the
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acceptance of responsibility issue as to what happened there

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and why he would be involved in an offense while he was out on
bond.
In that case, it was an undercover sting case and
there were many recordings made.
of every one of them.
I've listened to every minute
And during the case, as it unfolded, the undercover
agent asked Mr. Diveroli to do several things which
Mr. Diveroli declined to do.
a couple of months.
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This was an ongoing situation for
For instance, he asked Mr. Diveroli to import
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something which might be an ITAR violation.
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declined to do that.
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Mr. Diveroli
What Mr. Diveroli was trying to do was to sell
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magazines for weapons, not -- ammunition, not weapons, but a
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magazine, which is -- which would be legal for him to do
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because it's not a federal firearm.
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He says on the tapes to the undercover agent many,
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many times, "I don't have a license.
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anything illegal.
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want to go through that again.
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100 percent right.
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it."
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I don't want to do
I've been arrested at gunpoint and I never

I want to do everything
It's not worth it.
I don't want to risk
Eventually -- but the calls were continuous.
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Eventually, Mr. Diveroli agreed to come up to Orlando.
But
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before that, on the phone, on the tapes -- and I have excerpts

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of it, if anybody would -- wants to hear them.
But as an officer of the Court, I tell the Court that
he says on there, "I cannot leave.
than Ft. Pierce.
District."
I can't go further north
I'm circumscribed by matters in the Southern
And the agent said, "If you don't come up here" --
this is a 10-million-dollar deal -- you're not going to get the
deal."
He's tried to abide by the bond, your Honor, but he
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was persuaded to leave.
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wrong.
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agent.
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That was wrong and he knew it was
But he did leave after being encouraged to do so by the
Now, he also says, when he comes to the Middle
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District, the night before he had a conversation with the
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undercover agent who said, "Why don't you bring some guns," you
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know, "Bring some guns, some ammunition."
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And Mr. Diveroli says, "I'm coming up there to do this
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business deal about the magazines.
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play with toys."
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I'm not coming up here to
And he comes to the Middle District and the agent says

to him, "Did you bring any guns?"
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And Mr. Diveroli says, "No, I didn't."
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The agent said, "Oh, no problem.
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So Mr. Diveroli also had his -- one of the guys that
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And he didn't.
I did."
worked for him bring some ammunition and then they purchased

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some more ammunition that day.
Mr. Diveroli was trying to do the deal with the
magazines.
ammunition to play with the toys, to shoot the guns, because
that's what he thought the agent wanted him to do.
That was his primary mission.
But he did bring
So he did -- as I explained, he did take
responsibility because he did possess the ammunition.
wasn't what he was trying to do, your Honor.
to sell ammunition to the undercover officer.
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But that
He was not trying
He had set up a corporation after consulting with
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attorneys, which I've verified, and they told him that he would
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be able to be a consultant, but that he could not really
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control the business.
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And that's where he crossed the line.
He did have
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control over the business that had the ammunition.
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he pled guilty.
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But I just wanted the Court to know that he was trying
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to do a legal deal.
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accepted responsibility for it.
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mission.
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That's why
And he did do something illegal, and he

But that wasn't his primary
And it took a couple of months to get him to come up
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there and do it.
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look at them and put them down and walk away from them.
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would have fired them, I think.
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And he did pick up two of the weapons and
So he's accepted responsibility for that.
But he

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He sat down with the agents and ATF.
He has
cooperated with them.
extent, in a way that could be dangerous for him as to other
inmates, et cetera, that were violent.
He's cooperated with them, to some
He's given any information that they want.
He's
agreed to forfeit ammunition that has been seized by the
Government, and I've been in negotiations with them to do that.
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From the minute that we sat down with the Government,

he agreed to plead.
"No.
He pled to an information because he said,
You don't even need to indict me."
He waived indictment.
So, your Honor, I think that -- when the doctor said
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"easily lured," I kind of wrote that down on my pad.
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not entrapped.
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liability offense.
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There was not an entrapment.
He was
It's a strict
But he was manipulated and he did the wrong thing.
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had already -- took responsibility for that.
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Court to know that it wasn't something he set out to do.
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MR. SREBNICK:
He
I just wanted the
With that context and understanding
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that -- from a personal level, I did everything I could to
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encourage Mr. Diveroli while he was out on bond to change his
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focus, because his focus has always been on how to make a buck,
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always trying to prove that he could be a success; and he
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didn't define success the way he should have.
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On that point, someone who can speak to that much

better than I can is his spiritual advisor, Rabbi Lipsker, who

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has talked to Efraim about regret, remorse, what the definition
of "success" is.
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I would invite him to come forward, if the Court would

hear from him, to comment on the evolving Efraim Diveroli.
THE COURT:
RABBI LIPSKER:
THE COURT:
RABBI LIPSKER:
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I will hear from the Rabbi.

Good afternoon.
Good afternoon, Rabbi.

It's always a very awesome
responsibility to be in this environment.

I find, usually, that to really find a balance between
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the spiritual, moral, human elements sometimes and the legal
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obligations that are thrust upon us in a positive manner is not
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always the easiest thing.
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Just to give you some clarity about my relationship
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with Mr. Diveroli, I've met with him on many occasions, regular
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meetings, and have actually sent some of our rabbis to work
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with him regularly for approximately two and a half years.
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In the almost 30 years of working in the prison
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environment with men and women that are facing these
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difficulties, it's the first time I said to a defendant, "You
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need to go to jail," because for multiple reasons of his own
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environment, his own background, he chose a path that was
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driven by other than the most noble causes.
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You might have some kind of an excuse where you define

insanity in a certain fashion.
Most geniuses have some element

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of that, out-of-the-box feelings and thinking.
Efraim is one of those.
Brilliant person.
A mind
that far exceeded his maturity and extroversion that came from
a deep sense of lack of security, deep sense of insecurity, of
lack of personal pride.
be the loudest voice, the biggest partier, the flashiest guy.
It came easy to him.
He had to prove himself, had to always
The evil factors that dwell in our animal souls and
our animal instincts many times are much more powerful than the
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spiritual factors that have to come to us through a lot of work
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in exercising that extraordinary human concept of intellect,
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being able to have control over emotions.
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And the basic foundations of cognitive psychology and
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thinking, that tape recorder that continues to play in our
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inner beings, that starts playing from the time we were born
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and maybe before that, we often just react to it like an
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autonomous system without knowing that we can change the tape.
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He didn't think he could change the tape.

even think about it.
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He didn't
THE COURT:
He probably didn't want to change the
tape.
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RABBI LIPSKER:
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the tape.
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way.
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moment.
It's true.
He didn't want to change
He was having too much fun, and luck was going his
He always was just on the other side of the unlucky

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Mr. Diveroli has enormous capacity.
He's a man with a
great heart, a great soul, and corrupt behavior.
The worst thing in his life -- I don't know if I
should be so blunt, but I told Mr. Diveroli that I will -- he
told me one day, "You know, Rabbi, if you could keep me out of
jail, I'll give you a million dollars."
I said, "You know, Efraim, just for saying that, I
want you to go to jail because you've got it all wrong.
not about that.
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It's about life.
God gave you a gift.
It's about being productive.
Use it in the right way."
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THE COURT:
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You have seen him since he's been in jail?
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RABBI LIPSKER:
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THE COURT:
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It's
Let me ask you a question, Rabbi.
Yes.
And what have you observed as far as a
change or a lack of change in Mr. Diveroli?
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RABBI LIPSKER:
Three elements that I find to be
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extremely fundamental in the human behavior patterns is
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arrogance, selfishness, hedonistic pleasure principles, power,
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jealousy and always thinking, "The other guy's wrong.
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make it happen.
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at him," et cetera, or her or whatever.
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I can get it done.
I'll
I can throw enough money
What I was looking for throughout the two and a half
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years, I finally saw it.
And I said to him -- the first time I
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saw him in jail, I said, "I'm not going to go talk on your
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behalf."
I said, "This is an extremely honorable and

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well-intentioned judge who knows the work of Aleph.
going to jeopardize her credibility because of someone like
you.
anything for you."
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I'm not
Unless I see some change, I'm not going to come and do
We talked for a while.
I said, "Talk is not enough.
I want you to write me a letter."

He wrote me a letter, and I saw him again.
For the
first time in two and a half years, I saw three things:
acknowledgement, real acknowledgement.
10
Everybody comes in here and says "I'm sorry" because,
11
if you don't say "I'm sorry," you're going to get hit a lot
12
harder than if you do say "I'm sorry."
Everybody knows that.
13
So he was going to come in and say "I'm sorry."
14
I said, "That's not enough."
15
I saw the fact that he was cognizant, he was aware, of
16
the destruction.
17
it's what he brought upon himself.
18
More than what he brought upon his family,
Sometimes when God gives you a gift and you not only
19
squander it, but continue to destroy it -- I said, "What right
20
do you have to have a good mind?
21
idiot and put away somewhere because your good mind can be used
22
to better society or to destroy society.
23
Tubalcain that creates armaments for destruction or you can be
24
his brother that becomes a shepherd of history."
25
I believe he can.
You should be some kind of an
You can be a
So the first thing was

22
1
2
acknowledgement.
The second thing I saw was humility.
I told his
attorney when he came out -- I said, "You know, I think he
still thinks he can fool some people, but he was humble."
felt a sense that he's not that all-powerful person.
6
7
8
9
10
11
And the third thing was a serious commitment, in my

eyes, of change.
Now, the reason I'm speaking on his behalf -- and I
know these five months to him was worse than purgatory.
It was
going to be the worst thing.

My son was one of my assistants whom I assigned to
12
work with Mr. Diveroli and went to visit him in Orlando.
13
came back, my son.
14
what I saw.
15
This is a broken person."
To him, prison was the ultimate negative.
Trapped.
Captured like a common criminal, which he was, and is.
17
wrong things.
He did
When I saw the fact that he had a serious desire for
19
change -- and I made a list in Hebrew.
20
minute because I'll just translate it quickly.
21
He
He said, "Ta," he said, "I didn't believe
16
18
He
It'll only take me a
Five levels of remorse and repentance:
22
acknowledgement to know that you did it, just to acknowledge
23
that you did it.
24
commitment never to do it again.
25
same circumstances and not to do it.
Remorse.
Acceptance of responsibility.
And to be confronted with the

Those are the five

23
levels.
I said it must be domination of your negative forces.
The answer is "no."
"Don't do it."
why we put on tefillin, because the head should control the
heart.
The heart says "yes."
The head says
It's like the Jewish myths of tefillin.
That's
Transformation, where the mind controls the heart.
Naturally, our natural instinct is, "Give me, give me, I want"
from the time a child is born.
10
I said, "You're no different
than anyone."
11
And when that is not answered in a healthy way, which,
12
in some instances -- I suppose it was discussed earlier; it may
13
not have been -- the physical desires become enormous and
14
overwhelming.
15
When they start to be fed, it's not drug addiction.
16
It's not alcohol addiction.
17
food addiction.
18
need more and more and it's never satisfactory.
19
It's not sex addiction.
It's not
It's just addiction for everything.
You just
The capacity to know that you can change, that you
20
have the potential to be good, requires a tremendous effort, an
21
effort that sometimes it's easier to be in prison than to put
22
forth that effort.
I've had that experience as well.
23
I believe that we can save this person.
I'm a rabbi,
24
but we're not talking about saving the Jew for Jewishness.
25
We're talking about saving a person for humanity.

24
I think he needs to spend a little bit more time in
prison.
But five years?
experience.
benefits, you start becoming a prison person.
wanting to excel in that environment.
There is a diminishing return, in my
After a certain period of time, instead of the
You know, he got tested.
You start
There were sting programs.
We say every morning in our prayer, "Lord, our God, do not
bring me to test.
Don't test me."
It's said that a repented person who had a problem
10
with morality should not walk down a street of prostitution
11
because you don't want to awaken those factors until the person
12
is healthy enough.
13
I would ask your Honor, in understanding these
14
elements from many perspectives -- the last time I was in this
15
court I talked on behalf of a person with a diminished mental
16
capacity.
17
Today we talk about a person with a diminished
18
disciplinary capacity, enormous mental capacity.
19
spend some more time in prison.
20
He should
I think it should be to the extent where he can -- I'm
21
sorry.
22
it should be -- in my opinion, if a person spends a couple of
23
years in jail -- for him, that could transform him.
24
25
I should not -- I don't know if I can or should.
But
Aleph would have our people in the prisons on a

regular basis, working with them.
Because we're working -- we

25
work across the country, not only in New York, not only in
Florida, but I suppose he would be in Florida.
And when he comes out, to impose a very serious,
strong period of probation -- parole, probation that would
include enormous responsibilities, house arrest, halfway house
where he can be productive, the various types of counseling
elements that we would participate in.
I believe -- and I would not say this by
decredibilizing Aleph for myself -- and I will tell you we
10
didn't get a million dollars from him nor would we accept it.
11
It's not within that range.
It's about human beings.
12
I believe that we can come back here in five years
13
from now with an example and say we saved this person, this
14
productive person of society.
15
16
If I can be of any help or my organization can be of

any help, we're here to do so.
17
Thank you very much.
18
THE COURT:
19
MR. SREBNICK:
Thank you, Rabbi.

Judge, the last person that I'd ask to
20
address the Court is another rabbi who is his family member,
21
Shmuley Boteach.
22
I'd ask him to come forward.
23
He can tell you a little bit about himself.
24
the brother of Efraim 's mother.
25
brother.
But he's
He's Efraim's mother's

26
1
2
THE COURT REPORTER:

record.
3
4
RABBI BOTEACH:
Rabbi Shmuley, S-h-m-u-l-e-y.
Second
name B-o-t-e-a-c-h.
5
6
Pleas spell your name for the
Thank you, your Honor, for allowing me to take a few

precious moments of the Court.
And with your permission, if you would not mind, I
would like to thank Rabbi Lipsker, who began to influence me
when I was a boy of 8, after my parents divorced.
10
In my own state of brokenness, he used to mesmerize me
11
with stories of great men and noble action and, but for the
12
grace of God, where I might have been had I not been exposed to
13
the incredible work of Chabad in this city, which I later
14
joined.
15
You're a true hero of the Jewish people, showing love
16
to those who others and society rejects, and I salute you.
17
Your Honor, I come before you today with pain and
18
humility, pain in seeing my own nephew in such a fallen and
19
disgraced state, humility because I am someone who, since my
20
own parents divorced, has devoted himself to attempting to
21
rescue families in crisis.
22
I broadcast a national show trying to help families
23
who are in pain.
I -- and radio.
I've written many books on
24
relationships.
25
own impotence and my own failure at having helped a member of
And, therefore, humility and acknowledging my

27
my own family.
Indeed, many loving professional and personal
counselors have advised me not to be here today, saying it
would damage my credibility.
But Efraim is my nephew.
He's my flesh and blood.
love him and I will never abandon him because, above all else,
I believe in family and I believe in values.
8
9
There have been several victims to Efraim's crime.

Foremost among them is the American military, which is
10
particularly excruciating, because I have trained my kids to
11
walk over to every person wearing the uniform and thank them
12
for their service.
13
I'm the father of six daughters and three sons.
I was
14
raised by a single mother.
15
mothers.
16
especially, the theater of war with which this case is
17
involved, and to see how these -- how Afghani women are saved
18
by the brave men and women of the military from being
19
brutalized by men is, in my opinion, God's work.
20
that my nephew could have deceived the military is particularly
21
shameful.
22
I have two sisters that are single
And to see the work of the military in Afghanistan,
And the fact
But there's another victim that has been overlooked, I
23
believe, and that is my sister and her children.
24
kids.
25
3,000 miles away.
My mother raised us after she divorced.
We are five
My father was
My sister was always the most selfless and

28
noble of the entire family.
She is known as a saint in the community here in Miami
Beach.
On February the 6th, she will be honored by AMIT, an
organization that raises money for orphan children in Israel.
Three or four times a week she goes to take care of an
elderly couple that live a block away from her who are
childless.
recognize his own wife.
fighting.
10
The man has Alzheimer's and often does not

She has to go and stop them from
She cooks for them.
She cleans for them.
She takes
them to their hospital appointments.
11
When Efraim started making money, she was contemptuous
12
of his success.
13
words, a mensch.
14
wanted him to be respectful to his elders.
15
lead a religious and spiritual life.
16
All she ever wanted was for him to be, in her

She wanted him to honor the Sabbath.
She
She wanted him to
She has been devastated beyond description by his
17
actions.
I cannot tell you about the infinite phone calls she
18
made to me to try to influence my nephew and all the people
19
around, which begs the question:
20
where we were raised by my mother, who is here today, to
21
always -- to never be greedy, to always live righteously, to
22
love our Judaism and to love God and to love all of God's
23
children, whatever color, whatever ethnicity, each and every
24
one of us still today has 30 or 40 guests for the Sabbath
25
dinner -- how could Efraim have done this?
In such a moral environment
That's the

29
question.
I can't claim to be able to answer that, but I do
believe my response and any insight I could offer has a
directed bearing on the decision you will make today, your
Honor.
When my sister and Efraim's father married, Efraim's
father found it very difficult to support his family.
through perhaps 20 jobs in 10 years.
He went
So when my brother finally offered him a job in
10
Government contracts in order to give him a life of dignity and
11
allow him to support his family in dignity and Efraim later
12
joined and started showing a phenomenal business acumen, I
13
believe that -- and I do not wish to be critical -- that, to an
14
extent, his father and perhaps others began to live vicariously
15
through his success.
16
No one stopped his excess.
His mother used to badger
17
him and berate him constantly to be better.
18
for any of his success.
19
She never cared
But he was allowed to get away with it, to an extent,
20
and given very little guidance when he was 16, 17.
21
millionaire by 18.
22
rocket strapped to his back with absolutely zero moral
23
guidance.
24
25
No one cared about his success.
He was a
He had a
When some of us tried to correct him and tell him, as

Rabbi Lipsker expressed so nobly and as even Efraim's dedicated

30
lawyers, like Howard, just said, that success must be defined
by other things, he looked down at us who were less successful
than him as people who could not offer him moral guidance.
was smarter than everyone.
He
This is why I believe, your Honor, if I can plead
before you for leniency, this is the key that has changed.
There's a famous Jewish expression that says that the
difference between the wise man and the clever man is that the
clever man can extricate himself from situations into which the
10
11
wise man would never have gotten himself into.

My nephew has discovered today that he is neither
12
clever nor wise, certainly not wise.
13
consequences of his actions.
14
get out of anything he got into.
15
He never discerned the
But he always believed he could
He always believed, if he threw enough money at a
16
problem, his army of lawyers, very dedicated to him, who were
17
even like father figures to him, that they would rescue him.
18
And today here we sit.
19
save him from the sentence you will impose.
20
All the king's horses and men cannot
I have never seen him as broken.
I do not see the
21
criminal justice system as anything today, sincerely stated,
22
but angels of mercy who have saved my nephew from
23
self-annihilation.
24
But I fear, your Honor, that this moment that we've
25
been waiting for for him to really get it -- and I saw a man

31
broken to the core yesterday.
He spoke to me very movingly about how in jail he now
sees that life doesn't go anywhere, it's utterly stagnant, that
one must relinquish ambition, you become utterly anonymous.
wanted to make himself something and he went the exact opposite
direction.
He
I fear that, if the sentence -- and please forgive me,
because I'm not accustomed to these situations.
But if it's
excessive, your Honor, we will snuff out the light of a bright
10
soul who might, as Rabbi Lipsker said, be able to truly
11
contribute.
12
He's very bright.
He's very smart.
He will come back to a family that is extremely
13
close-knit.
14
saying psalms right now.
15
you.
16
I have nine children.
They are praying for him,
They know that I'm speaking before
My son is 17 and studying to be a rabbi in Germany.
17
have two daughters in Israel, studying at seminaries.
18
love him.
19
most moral people around.
20
synagogue.
21
All his cousins love him.
His mother is one of the
His father prays at Rabbi Lipsker's
He will come into a moral environment with an open
22
heart so we can really begin to influence him.
23
stonewalled us until now.
24
25
They
He has
And I'm not saying that we're not also responsible.

There are things that my family must begin to address.
And I

32
say it to all of them gathered here today.
people, but we must discipline our children.
We are very moral
If you'll forgive me, your Honor, there's one thing I
discovered in marital counseling, that very often -- and my
sister really is a saint.
her actions throughout my life.
I say that sincerely, having watched
But I've seen that, when a woman is in a very lonely
and unloving marriage, she finds it difficult to be as tough as
she should with her own children because they become her source
10
of affection.
11
and she's afraid to bite the hand that feeds her.
12
existed early in Efraim's life.
13
They become the only thing that she has left,

I think that
I also ask you to please consider, your Honor, the
14
extreme youth.
15
21 when he started with the contract, he was barely allowed to
16
buy a beer.
17
is startling, that at that age he was doing business this big.
18
He had a rocket strapped to his back with absolutely no
19
guidance system.
20
At the time that this was committed, I believe,
He was doing contracts none of us even knew.
And, finally, I'm asking you to please consider my
21
nephews and nieces, Efraim's siblings.
22
Efraim always was a loving brother.
23
tremendous affection to his younger siblings.
24
25
This
The one thing that
He always showed
There were other acts of kindness that just came to my

attention.
Outside a man walked over to me and said to me, "I

33
needed a job.
offered me a job."
I couldn't support my family and Efraim came and
There is goodness in him.
He has an open heart.
don't want my sister to be -- life to be destroyed by him
sitting for so many years where the entire family is revolving
around going to prison visits.
We'd like to teach him the beauty of the Jewish faith,
of Jewish values.
rejected it.
10
Yes.
Yes.
He
Unfortunately, he needed to hit rock bottom.
He
That is all true.
11
cannot sink any lower.
12
shamed us.
13
money.
14
15
He was raised with it.
He has lost everything he has.
He has disgraced himself.
Thank you for considering my petition for leniency,

your Honor.
May God bless you.
17
MR. SREBNICK:
19
He has lost all of his
He has lost his very freedom.
16
18
He has
Your Honor, that is all the testimony
on the issue of acceptance.

I know it's a bit novel of an approach we've taken.
20
But I think you've heard not only from Efraim, the acceptance
21
of responsibility from him, but, frankly, I think the entire
22
community is trying to do everything they can to help Efraim
23
reach that awakening that is so important.
24
25
And I will say that, on this point, your Honor said

something today that I can't help but being reminded of.
It

34
would have been the best thing that happened to Efraim had he
gone to jail right when he got arrested the first time.
And Mr. Shapiro and I advised him that that would be
the best course for him.
take -- we can't tell our client to go to jail and ask the
Court to take him to jail if that's not his request.
But, of course, as his counsel, we
And I think he knows, sitting here today, that he'd
have been much better off.
He would have been able to
successfully complete his cooperation.
He would be here today
10
on a 5K, not on a quarrel over two points for acceptance of
11
responsibility.
12
Having said that, Judge, I do believe in this unusual
13
circumstance, given his mental health issues, substance abuse
14
issues, the other issues that you've heard from the fact that
15
he's pled in both cases, that whatever punishment is coming to
16
him in Orlando will be meted out by the Judge there.
17
I do think that today, January 3rd, 2011, that
18
Mr. Diveroli, after five months in prison, has reached that
19
point of awakening of acknowledgement, of acceptance, not only
20
for responsibility for the crimes he stands committed, but for
21
a wasted existence.
22
And I've told him that.
23
met in prison very recently.
24
waste.
25
deserves some adjustment.
And he knows that.
And we've
And he knows he's been a total
His ability to finally acknowledge that, in my view,

35
1
2
Unless Mr. Shapiro wants to add to my comments, I

think that's all we have on this point.
THE COURT:
Let me hear from the Government.
MS. FERNANDEZ:
Your Honor, with respect to the
acceptance of responsibility, we ask the Court to focus on two
primary issues.
First of all, in looking back, from the time that this
Defendant was released on bond, there's a pattern of continuous
violations of his conditions of release.
10
Even after those conditions were modified back in
11
October of '09 in front of Judge Turnoff, this Defendant once
12
again stood in front of that Court and said, "I recognize what
13
the conditions of my release are.
14
mistake.
I will abide by the law."
15
And even as he was --
16
THE COURT:
17
I will not make another
What had happened before Judge Turnoff?
Remind me.
18
MS. FERNANDEZ:
Your Honor, before Judge Turnoff,
19
there had been a positive testing of cocaine in September of
20
'09 by the Defendant.
21
reports.
22
There had been a number of failure to
And so, while the Defendant again -- and he had the
23
assistance of a number of these experts and clinical
24
psychologists all throughout who came forward and said, "If we
25
give the Defendant another chance and have an opportunity to

36
increase the number of psychiatric visits, the number of
Alcoholics Anonymous visits, we believe we can help him."
He was given a chance then.
And without the
Government even knowing, as he was meeting with the Government,
he was violating conditions of his release.
I bring that to the Court's attention because, in
looking back, it appears as a total disregard for the law.
that has been the pattern that we have seen from Mr. Diveroli.
And
He's had the assistance of many professionals, many
10
loved ones, oftentimes to deal with the same issues that many
11
of the Defendants that this Court sentences has to deal with:
12
Substance abuse issues, mental health issues and broken homes.
13
There's nothing unusual about any of that.
14
15
But what is striking is that there's a continuous

pattern to disregard the law.
16
And I guess the climax of that is, again, this
17
Orlando, the new offense, which the Court, I'm sure, has seen
18
the description in the PSI as well as we moved to revoke his
19
bond, illustrates the number -- the continuous phone calls,
20
engaging -- and the Defendant finally admitting and knowing
21
that he had no way he could have been involved in that kind of
22
conduct.
He had to find other ways to evade the law.
23
And that's been the pattern that we've seen.
24
I submit to you that, under 3E1.1 and the notes that
25
accompanied that acceptance of responsibility section, there's

37
two bases for not granting that acceptance, number one, the
failure to voluntarily terminate or withdraw from criminal
conduct.
And I would submit that the rehabilitative efforts
that many have tried to provide for the last two and a half
years to this Defendant have not been successful to that end
because there's continuous evasion and disregard for the law.
8
9
THE COURT:
What was the second provision?
You
mentioned, one --
10
MS. FERNANDEZ:
Post-rehabilitative efforts.
11
THE COURT:
12
Well, I will tell you that, while the Doctor was
Oh, okay.
13
testifying in the sealed hearing, Mr. Srebnick referred to it,
14
the one thing that I stated, which was exactly what Rabbi
15
Lipsker said:
16
He had to be in jail.
17
He had to go to jail.
It's unfortunate.
He needed to go to jail.
First of all, it's unfortunate that
18
he was involved in all this, unfortunate that, while he was out
19
on bond, he was not able to realize either the seriousness of
20
the conduct that he had been involved in or have the ability to
21
make some change in his life and accept responsibility at that
22
time.
23
And as Mr. Srebnick said, it is unfortunate that
24
Mr. Diveroli now stands before the Court to be sentenced
25
without giving himself the opportunity for -- I don't believe

38
the Government intends to bring forth a motion for substantial
assistance, while, in fact, that had been contemplated.
I know he was on the witness list and they made some
changes in the presentation of their case twice, two times, in
the case against Ralph Merrill.
But having heard from the psychologist who testified
and the rabbis who have been involved with Mr. Diveroli and
spiritually advised him and the statements that Mr. Diveroli
has now stated, which -- I think he himself said, "I'm in jail
10
now.
I have so limited my existence.
11
everything."
12
That's what jail is.
I am in denial of
We deny everything.
Under 3E1.1, the Court is to determine whether a
13
defendant qualifies under Subsection (a), which is clear
14
demonstration of acceptance of responsibility.
15
And there are appropriate considerations that the
16
Court is to consider, including, but not limited to -- and some
17
of that is voluntary termination or withdrawal from criminal
18
conduct.
19
As far as post-offense rehabilitation and counseling,
20
I think it's been made very clear from everybody who has spoken
21
here today that Mr. Diveroli was not able to see himself for
22
what he was until he was in jail.
23
be there.
24
before me who had to be there.
25
As sad as that is, he had to
He's not the first Defendant that I've seen stand
In fact, I recently got a holiday card from a

39
defendant who I put in jail who said to me, "Thank you.
you so much for putting me in jail" -- it's the most unusual
holiday card I have ever received -- "because you changed my
life.
5
6
7
Thank
I changed my life because of what you did."

And I think now that Mr. Diveroli, now that he is in
jail, is accepting responsibility.

So in the exercise of my discretion, in considering
all of the factors under 3E1.1, I am going to grant him the two
levels for acceptance of responsibility.
10
I would say that he chose a very difficult road to
11
receive these two levels.
12
mental health status and given the way he was and the way he
13
now is in jail, that being in prison has forced him to really
14
look at himself for maybe the first time in his life.
15
But I do believe that, given his
And I do believe that people can change and they can
16
realize things about themselves for the better and become
17
better people.
18
Now, that is not to say that I am not going to
19
exercise my duty and punish Mr. Diveroli for the acts he
20
committed.
21
But I do believe and I do find that he is entitled to
22
the two levels off for acceptance of responsibility because, as
23
now sits before me, I find that he has accepted responsibility.
24
So I will order that the advisory presentence
25
investigation report be modified to reflect two levels off for

40
1
2
3
4
5
acceptance of responsibility under 3E1.1.

Is that the only objection that you have,
Mr. Srebnick?
MR. SREBNICK:
One moment.
I need to consult with
Mr. Shapiro.
THE COURT:
The corporation received two levels.
MR. SREBNICK:
I was just consulting with the
Government because, frankly, I confess ignorance on the
application of that third level.
10
THE COURT:
11
MR. SREBNICK:
12
That's the Government's choice.
won't be receiving their motion on that.
13
THE COURT:
14
MR. SREBNICK:
15
And I understand from them that we
One cannot be surprised.

So with that, Judge, we understand that
the guideline would be reduced by two levels.
16
THE COURT:
17
Are there any other objections?
18
everything with you.
Right.
I'm going to review
Any other objections?
19
MR. SREBNICK:
20
THE COURT:
No other objections for the guidelines.
The Court will adopt the factual findings
21
and guideline applications as contained in the revised advisory
22
presentence investigation report as modified at this hearing.
23
Before going further, I would ask counsel to review
24
with me, with the assistance of Probation, the major
25
calculations contained in the advisory presentence

41
investigation report as modified.
The offense level is now a 24; the criminal history
category remains at Roman numeral I; the advisory guideline
range is now 51 to 60 months.
THE COURT:
Because the statutory maximum is
60 months.
But the statutory maximum is 60.
9
10
Yes, your Honor.
The advisory guideline range is actually 51 to 63.
The supervised release period is still two to three

years.
11
How does the potential fine change?
12
13
The fine range is now 10,000
to 100,000, your Honor.
14
THE COURT:
15
Restitution in the amount of $149,279.28.
16
Is that correct in its totality as it relates to

Efraim Diveroli?
19
20
And
$100 special assessment.
17
18
10,000 to 100,000-dollar fine.
MR. SREBNICK:
I believe that's a correct computation,
Judge.
21
THE COURT:
Do you agree, Ms. Fernandez?
22
MS. FERNANDEZ:
23
THE COURT:
Yes, your Honor.
Mr. Diveroli, you are in court today to
24
receive your sentence.
Before that happens, I must ask you if
25
there's any legal cause as to why the sentence of the law

42
should not be pronounced upon you.
THE DEFENDANT:
THE COURT:
No, your Honor.
No legal cause having been shown, the
Court will consider whatever you may wish to say in mitigation.
Mr. Srebnick?
MR. SREBNICK:
Judge, I need to address one housekeeping matter
8
9
10
Thank you, Judge.
because that might affect the final sentence.

I did discuss this with the Government.
The Court, because Mr. Diveroli violated his bond,
11
ultimately revoked his bond in December.
12
Entries 1001, 1002.
13
on December 7 of 2010.
14
One moment.
It's Docket
And according to the docket sheet, it was
Because Mr. Diveroli was on bond, my concern is that
15
we clarify whether Mr. Diveroli will get credit for time served
16
from the point of his arrest, August 19, 2010, when he was
17
incarcerated in Orlando.
18
And so that it is clear, if the Court were to make the
19
order of December 7, 2010, nunc pro tunc to the date of his
20
arrest, meaning it's effective as of the date of his arrest,
21
then I'm confident that, in computing his time, the Bureau of
22
Prisons would give him credit for all the time beginning on the
23
day of his arrest, August 19, 2010, in the Orlando matter.
24
25
Failing that, there may be significant confusion over

whether or not he gets credit for that time served because,

43
technically, he was on bond in your case until your Honor
entered the revocation.
So that's a concern I have.
I don't know if it's
going to affect your decision in terms of how much more time
you had in your mind to give him.
But the request I would make -- I think there's no
objection -- is that the Court make that order of revocation
effective -- I think the Latin phrase nunc pro tunc --
THE COURT:
10
I'm familiar with the phrase.
MR. SREBNICK:
I know that.
I thought the audience
11
might not be and they think I'm speaking in gibberish here.
12
have a few people listening in behind me.
13
THE COURT:
14
MS. FERNANDEZ:
15
We would typically just have Bureau of Prisons
What's the Government's position?

Your Honor, we have no objection.
16
calculate time for -- credit for time served.
17
incarcerated since the arrest in Orlando.
18
19
THE COURT:
22
23
He's been
Normally, they do -- the Bureau of Prisons
calculates that.
20
21
I will amend -- what are the docket entries, please,

again?
MR. SREBNICK:
By my record, it's 1001.
another one, 1002.
24
Thank you, Judge.
25
THE COURT:
Let me make sure.
And I see

44
MR. SREBNICK:
Judge, I just spoke to Ms. Fernandez.
If the Court would prefer, we can conclude the sentencing and
then clarify that, making sure we reference the correct --
THE COURT:
I'm almost there.
Just wait a minute.
They are Docket Entries 1001 and 1002, granting the
motions -- Docket Entries 953 and 954, motions to revoke bond.
I will make them nunc pro tunc.
8
9
What was the date of the arrest in Orlando?

August 19th?
10
MR. SHAPIRO:
Yes.
11
THE COURT:
12
MR. SREBNICK:
August 19th.
Ms. Fernandez notes Docket Entry 1040,
13
I believe, the arrest warrant, to the extent that that's
14
relevant.
15
I'm not sure.

THE COURT:
16
arrest warrant.
17
August 19th.
I'm not going to make any changes in the
I will make my orders nunc pro tunc to
18
MR. SREBNICK:
Thank you.
19
THE COURT:
20
MR. SREBNICK:
21
So where we stand now, Judge, given the Court's
We'll enter a docket entry as to that.

Thank you, Judge.
22
finding, under the findings of the Court, the guideline range
23
would be 51 to 60.
24
25
Had Mr. Diveroli not found himself in trouble in

Orlando and gotten the full credit for acceptance, he would be

45
at 46 months, which is one level lower.
Under the plea agreement, counsel is not allowed to
request any departures or variances.
Nevertheless, I would
like the Court to hear from Mr. Diveroli's mom, who would like
to address the Court.
At this time I would introduce Ateret Diveroli.
THE COURT REPORTER:
for the record.
MS. DIVEROLI:
A-t-e-r-e-t.
10
THE COURT REPORTER:
11
MS. DIVEROLI:
12
And please spell your first name
Diveroli.
13
Thank you.
Hi, Judge Lenard.
My name is Ateret
I'm Efraim's mother.

And Efraim -- you know, ever since Efraim was young, I
14
always taught him to be an upstanding citizen.
15
the most important thing.
16
his mother and his family were all upstanding citizens of the
17
community for many years.
18
To me, that was
And he knows better than anyone that
In fact, I've worked downtown, the Seybold Building,
19
which is two blocks from here, for over -- almost 30 years
20
already.
21
a very close-knit family.
22
most important thing.
23
We have a very good name, a good reputation.
We are
And Efraim knows that that was the
And when Efraim got these Government contracts, they
24
never meant anything to us in the family.
25
what kind of money he's making.
We didn't even know
The family never benefited

46
from anything.
And not only that, but I also -- Efraim was -- I knew
he was doing alcohol, drugs, gambling.
office once because I'm not familiar with -- you know, nobody
in our family has ever gone to prison.
the ropes.
drinking and I needed help.
8
9
I even called your
I wasn't familiar with
So I called your office because he was gambling and
I wanted him to go to jail.
And I know every time I
say that he hates me for saying it, but I love my son more than
10
anything in the world.
11
felt like a lucky person.
12
I have my son with me and he's okay.
13
And he needed to go to jail.
Okay?
I can sleep at night because I know
And I just want to say that, you know, I took him
14
to -- many times, I was in and out of the courthouse so many
15
times for his alcohol and drug use.
16
And my sister went with me to the Hard Rock to pull
17
him out.
18
Rock one night.
19
name to not gamble anymore.
20
You don't know what it was to pull him out of Hard

I went back the next day and made him sign his
Your Honor, you know, like, I understand the
21
Government's point of view.
22
shouldn't have done.
23
say he got counseling, he really didn't get what he needed.
24
25
Efraim did something illegal he
You're 100 percent right.
But when they
You know, he was still in the same neighborhood with

the same friends, the same -- nothing really changed.
He

47
needed to go away for at least a year, 18 months.
He had so many alcohol and drug and gambling issues,
he couldn't be where he was, you know.
involved with his lawyers and the case and he couldn't leave in
the middle.
And then he got
And he never got what he needed, believe me.
got it.
never -- his issues were never addressed.
addressed correctly.
10
And that's why he got back to Orlando, because Efraim
And believe me, I tried.
They weren't
I was hoping the Marchman
11
Act would put him in jail, but it didn't.
12
another chance, another chance.
13
I feel lucky that my son -- that I have my son.
14
He never
They kept giving him
And, believe me, like I said,
But on the other hand, your Honor, I see how Efraim --
15
when I go to visit him now, how he's talking differently, how
16
he sees things differently.
17
looking in.
18
He's finally able to be out,
He wasn't able to do that before.
And he finally realized all those people which he gave
19
up his family for are not really his friends.
20
of them have come to visit him since he's been in jail.
21
family are the only ones.
22
have been there to support me through all this.
23
Okay?
Not one
His
And thank God for my family, who
And I just think that, as little as -- you can be
24
lenient with his prison time because Efraim really is a good
25
boy with a good heart and he really needs another chance.

48
know, with another chance, he can -- he could really be a good
member of society.
He comes -- you know, I believe in the old cliche:
The apple doesn't fall far from the tree.
nice, upstanding family, and I know he can be the same way.
know that, if he's given the chance, he has the opportunity to
be that way.
Thank you.
MR. SREBNICK:
Efraim has a very
Having to follow Rabbis Lipsker and
10
Boteach is not easy as a lawyer, and certainly having to hear
11
the heartache of his mother.
12
I remember when Efraim got arrested in August and
13
there were all these "I told you so's" going on because we all
14
were worried about him.
15
And, finally, his mom called me and -- and, of course,
16
you heard the suffering in this woman's voice.
17
telephone, we had a conversation.
18
And over the
She was just distraught.
And I said to Ateret -- I said, "Let me ask you,
19
Ateret.
20
Tell me, if I had the power to get him out tonight, would you
21
want him to come home tonight?"
22
Tonight is August 19th.
Your son has been arrested.
And a mother who can say to me, "No.
No.
I'd rather
23
just tonight that my son spend the night in jail," not because
24
she's angry at him or -- it's because she loves him and she
25
knew that he needed the brakes put on him.

49
And Ateret and I struck a deal.
once a week.
question."
Next week I'm going to ask you the same
And each week we've had the conversation:
ready to come home?
to come home?"
I said, "Let's talk
"Is Efraim
Has he gotten to the point where it's time
And so now we're having that conversation in January
of 2011, and we all know today's not the day that Efraim is
going to come home.
10
We know that.
We don't think he's going to come home in 2011.
But
11
as Rabbi Lipsker pointed out, there comes a point of
12
diminishing returns, when another day in jail becomes a wasted
13
day in jail, a waste for him as an individual and a waste for
14
us as taxpayers.
15
And so we leave it to your wisdom, Judge.
You've got
16
much more experience than any of us, more than Rabbis Lipsker
17
and Boteach, more than Hy Shapiro, who's got a lot of
18
experience and a few more gray hairs than I do.
19
And he knows I say that with a lot of love.
20
But we ask you to find:
Where is that point where
21
hope turns into despair?
Where is the sentence where it goes
22
from Efraim looking forward to going back to his family with
23
hope versus looking at life with despair?
24
And given what you've heard about him, the potential
25
he has, we ask you to find that point for us so that his life

50
will be better and so that we can have Efraim back with clarity
of thought, healthy and productive.
Thank you, Judge.
THE COURT:
5
6
7
8
9
Mr. Diveroli, is there something you wish
to say, sir?
THE DEFENDANT:
I think I've already said my piece,
your Honor.
The last thing I would say is that some people in my
position, you know, who've had the experience that I've had --
10
and I, also, for my short life have had many.
11
probably done more things than most people would dream of -- I
12
would have done it differently.
13
differently.
14
I mean, I've
I really would have done it
I would have just -- the money, the -- almost
15
notoriety in my industry and the good times -- and there were
16
some -- were not -- no way could ever be worth the suffering
17
that I've endured and that my family has endured as a result of
18
my actions.
19
And I have nothing else to say.
20
Thank you.
21
THE COURT:
22
MS. FERNANDEZ:
What does the Government say?

Your Honor, we ask that the Court
23
consider the seriousness of this offense and sentence the
24
Defendant within the revised advisory guideline range.
25
THE COURT:
If you would, stand with your client.

51
Come March of this year, I will have sat on this bench
for 15 years.
sentencing has always been the hardest part of my job.
is no different.
From day one until that day, and going forward,

Today
I certainly did hear the anguish of an uncle, who sees
his flesh and blood acting in a way that he knew was wrong and
would not consider his guidance or his love.
8
9
And I did hear the anguish of a mother who, in fact,

in a conversation with her attorney -- her son's attorney,
10
said, "Today was an okay day, a good day, for my son to be in
11
jail."
12
Sentencing is always very sad because there are so
13
many victims.
Certainly the family of Efraim Diveroli are
14
victims here.
As his uncle stated, certainly the United States
15
Army and its assistance to the Afghani National Army and Police
16
is a victim.
17
willing to put all of those persons in the theater of war in
18
peril for his own greed:
19
And certainly the fact that this Defendant was
They were victims, also.
And putting aside for the moment, as it is not my duty
20
today to sentence Mr. Diveroli on the basis of any outrage or
21
concern that all of us, as citizens, must have in the
22
Department of Defense granting a 290-million-dollar contract to
23
a 19-year-old -- or 20-year-old, who in a contract -- and I've
24
heard this case twice; so, I'm very familiar with the facts of
25
this case -- in a contract in which the compelling

52
determination for the granting of such contract was prior
experience, where Mr. Diveroli and others lied to obtain that
contract -- they lied about their prior experience.
about their references.
another day and for others to consider.
They lied about AEY.
They lied
But that is for
I must consider the appropriate sentence for a young
man who has gone so wrong, who has taken paths that certainly
his family, his mother, his father, his sisters, his large
amount of cousins, his rabbis, did not want him to take, but he
10
11
chose to take for a very serious crime.

For what?
For money?
For prestige?
To say you're a
12
big macher?
13
money, that that was how you evaluated your own self-worth?
14
is a sad day when anyone, any person, values their own
15
self-worth by a dollar sign.
16
You are a man, not a mensch, a man who could make

It
Under Title 18, United States Code, Section 3553(a),
17
there are factors that the Court shall consider in determining
18
a particular sentence to be imposed.
19
and circumstances of the offense and the history and
20
characteristics of the Defendant.
21
They include the nature
And here, as I've indicated, the Defendant stands
22
before the Court having pled guilty to a conspiracy in which he
23
participated with others to sell Chinese ammunition when he and
24
his co-conspirators knew full well that such ammunition was
25
prohibited by this very large contract that they had obtained,

53
a contract for which they intended to make very large amounts
of money.
And they made a determination at some point, when they
knew that the ammunition that they were going to be supplying
was in direct violation of the contract, to repackage that
ammunition extensively so it would bear no semblance of the
origin of the country from which that ammunition came and to
provide certificates of conformance to the Government that said
directly that they were not in violation of the contract that
10
11
12
they had signed with the Government.

And under 3553(a)(1), the Court also shall consider
the history and characteristics of the Defendant.
13
And certainly Mr. Diveroli's a very young, very
14
immature young man, who somehow -- how could he? -- have
15
developed the life skills necessary to administer a
16
290-million-dollar contract.
17
would laugh that such a young man would obtain such
18
responsibilities.
19
If it wasn't so amazing, you
And his uncle, the Rabbi, told us about a clever and a
20
wise man and the difference between the two.
21
Mr. Diveroli may have been clever, but not wise.
22
And, yes,
And then, while out on bond, rather than realizing the
23
magnitude of what he was involved in, he got involved in more,
24
more criminal activity, more drugs, more alcohol, more
25
gambling, more torture for his mother and his family.

54
And, unfortunately, it was not until the arrest in
Orlando and physically putting him in a cell that he decided to
stop, that he had to stop.
He had no choice but to stop.
The Court also has to consider the need for the
sentence imposed to reflect the seriousness of the offense, to
promote respect for the law and to provide just punishment for
the offense, to afford adequate deterrence to criminal conduct.
8
9
And this is not just criminal conduct and adequate

deterrence regarding the criminal conduct of this Defendant,
10
but, also, deterrence to the community at large, that this type
11
of fraudulent activity in contracts with the Government of the
12
United States will not be tolerated.
13
My gosh.
People -- young men and women from our
14
country and from around the world are losing their lives in
15
Afghanistan.
And I am sure that Mr. Diveroli may not be the
16
only person.
When one reads the news, one hears about all
17
kinds of fraud that's going on in Afghanistan.
18
may not be the only one.
19
Certainly he
But to participate in such a fraud when people are
20
putting their lives on the line, it makes it so much sadder.
21
It makes the heart ache.
22
For money.
For money.
That's why he did it:
Not to support the war effort.
23
In fact, there was evidence in this trial that, when
24
the co-conspirators realized that they couldn't make it work,
25
the shipping was too much, they stated in their e-mails to each

55
other, "We don't want to donate money to the Government.
That's not what we're about.
effort."
We're not donating to the war
They wanted to make sure that, by hook or by crook,
they would supply whatever they could get, even if it violated
the contract, because they wanted that payday.
I see a lot of people like that, people who are not satisfied
with their portion in life.
Unfortunately,
The Court has to consider the kinds of sentences that
10
are available, the advisory guideline range, the need to
11
provide restitution to victims of the offense and the need to
12
avoid unwarranted sentencing disparities among Defendants with
13
similar records who have been found guilty of similar conduct.
14
Having considered all of the factors under Title 18,
15
United States Code, Section 3553(a), and being especially
16
mindful of the nature and circumstances of the offense and the
17
need for the sentence imposed to reflect the seriousness of the
18
offense, promote respect for the law and provide just
19
punishment for the offense and to afford adequate deterrence to
20
criminal conduct, I find that a sentence of incarceration of
21
48 months is sufficient for punishment and deterrence.
22
I'm going to place Mr. Diveroli on supervised release
23
for three years.
24
Office and by the Aleph Institute.
25
He is to be cosupervised by the Probation
He will be on house arrest for the first three

56
months -- home detention for the first three months that he's
released from prison.
he will have to be in home detention.
advisory guideline sentence.
5
6
7
After probably being in a halfway house,

So it will be an
And there will be some other conditions, as you will

hear.
The Court has considered the statements of the
parties, the revised advisory presentence investigation report
as modified at this hearing, which contains the advisory
10
guidelines and the statutory factors set forth in Title 18,
11
United States Code, Section 3553(a)(1) through (7).
12
It is the finding of the Court that the Defendant is
13
able to pay restitution and a fine.
14
restitution is mandatory and a fine shall be imposed.
15
And, therefore,
Pursuant to the Sentencing Reform Act of 1984, it is
16
the judgment of the Court that the Defendant, Efraim Diveroli,
17
is hereby committed to the custody of the United States Bureau
18
of Prisons to be imprisoned for 48 months as to Count 1.
19
20
21
It is further ordered that the Defendant shall pay to

the United States a total fine of $100,000.
It is further ordered that the Defendant shall pay
22
restitution, jointly and severally with the other Defendants in
23
this case, in the amount of $149,279.28.
24
25
During the period of incarceration, payment shall be

made as follows:
If the Defendant earns wages in a Federal

57
Prison Industries job, then he must pay 50 percent of wages
earned toward the financial obligations imposed by this
judgment in a criminal case.
If he does not work in a Federal Prison Industries
job, then he must pay a minimum of $25 per quarter toward the
financial obligations imposed in this order.
Upon release from incarceration, the Defendant shall
pay restitution at the rate of 10 percent of monthly gross
earnings until such time as the Court may alter that payment
10
11
schedule in the interest of justice.

The United States Bureau of Prisons, the United States
12
Probation Office and the United States Attorney's Office shall
13
monitor the payment of restitution and report to the Court any
14
material change in the Defendant's ability to pay.
15
These payments do not preclude the Government from
16
using any other anticipated or unexpected financial gains,
17
assets or income of the Defendant to satisfy the restitution
18
obligations.
19
Restitution shall be made payable to the Clerk, United
20
States Courts, and forwarded to the United States Clerk's
21
Office, Attention:
22
Room 8N09, Miami, Florida, 33128.
23
Financial Section, 400 North Miami Avenue,
Restitution will then be forwarded by the Clerk of the
24
Court to the Headquarters, United States Army Sustainment
25
Command, Rock AMSAS-GC, Rock Island, Illinois, 61299.

58
The restitution and fine are payable immediately.
Probation Office and the United States Attorney's Office are
responsible for the enforcement of this order.
Upon release from imprisonment, the Defendant shall be
placed on supervised release for a term of three years as to
Count 1.
8
9
Within 48 hours of release from the custody of the

United States Bureau of Prisons, the Defendant shall report in
10
person to the probation office in the district to which he is
11
released.
12
While on supervised release, the Defendant shall not
13
commit any federal, state or local crimes; he shall be
14
prohibited from possessing a firearm or other dangerous device;
15
he shall not possess a controlled substance; he shall cooperate
16
in the collection of DNA and shall comply with the standard
17
conditions of supervised release that have been adopted by this
18
Court and with the following special conditions:
19
The Defendant shall provide complete access to
20
financial information, including disclosure of all business and
21
personal finances, to the United States probation officer.
22
The Defendant shall not apply for, solicit or incur
23
any further debt, included, but not limited to, loans, lines of
24
credit or credit card charges, either as a principal or
25
cosigner, as an individual or through any corporate entity,

59
without first obtaining prior written permission from the
United States probation officer.
3
4
5
The Defendant shall obtain prior written approval from

the Court before entering into any self-employment.
Upon request of the appropriate regulatory agency, the
Defendant shall relinquish his license to the agency.
Defendant is on notice that such relinquishment is permanent
and will be considered disciplinary action.
The
The Defendant shall submit to a search of his person
10
or property conducted in a reasonable manner and at a
11
reasonable time by the United States probation officer.
12
The Defendant shall perform 200 hours of community
13
service over the period of supervision as directed by the
14
United States probation officer and the Aleph Institute.
15
The Defendant shall participate in the home detention
16
and electronic monitoring program for a period of 90 days.
17
During this time, he shall remain at his place of residence
18
except for employment and other activities as approved in
19
advance by the United States probation officer.
20
The Defendant shall maintain a telephone at his place
21
of residence without call forwarding, call waiting, a modem,
22
caller ID or call back/call block services during this period.
23
He shall wear an electronic monitoring device and
24
follow electronic monitoring procedures as specified by the
25
United States probation officer, and he shall pay the cost of

60
electronic monitoring at the prevailing rate per day or in
accordance with his ability to pay.
It is further ordered that the Defendant shall pay to
the United States a special assessment of $100, which shall be
due immediately.
6
7
Does the Government have a motion to make regarding

any remaining counts?
MS. FERNANDEZ:
Yes, your Honor.
And, in addition, we'd ask -- we had agreed as part of
10
this plea agreement that the Defendant would pay a fine of
11
$250,000.
12
THE COURT:
13
MS. FERNANDEZ:
14
THE COURT:
15
Was that in the plea agreement?

Yes, it is.
So I will order -- do you agree,
Mr. Srebnick, that's in the plea agreement?
16
MR. SREBNICK:
17
THE COURT:
18
MS. FERNANDEZ:
Yes, it is.
I will order that the fine be $250,000.

At this time, the Government would
19
move to dismiss Counts 2 through 72 and 74 through 85 of the
20
superseding indictment.
21
THE COURT:
That motion is granted.
22
Mr. Diveroli, before I go through the colloquy
23
regarding appeal, I want to tell you one thing:
24
to you.
25
while you're incarcerated.
It is all up
You have to decide what your life is going to be like

61
And, most importantly, when you're released from
prison, there are going to be many doors that you can go
through.
want to see you back to tell me that you are doing well.
You have to carefully choose the right one.
THE DEFENDANT:
THE COURT:
I only
Thank you.
It is my duty to inform you, sir, that you
have 14 days with which to appeal the judgment and sentence of
this Court.
Should you desire to appeal and be without funds with
10
which to prosecute an appeal, an attorney will be appointed to
11
represent you in connection with that appeal.
12
13
Should you fail to appeal within that 14-day period,

it will constitute a waiver of your right to appeal.
14
It is also my duty to elicit from counsel from both
15
sides fully articulated objections to the Court's finding of
16
facts and conclusions of law as announced at this sentencing
17
hearing and to further elicit any objections which either side
18
may have to the manner in which sentence was imposed in this
19
case.
20
Are there any objections from the Government?
21
MS. FERNANDEZ:
Just as previously stated, the
22
acceptance of responsibility departure and -- as well as a
23
sentence below the advisory guideline range.
24
preserve that.
25
THE COURT:
We want to
It's noted for the record.

62
Any objections from the Defendant?
MR. SREBNICK:
But we go have some other matters.
THE COURT:
MR. SREBNICK:
THE COURT:
MR. SREBNICK:
Given Mr. Diveroli's documented alcohol and drug
No.
Okay.
Is now a good time?
Now is the time.

Thank you, Judge.
issues, we would ask if the Court might include in the judgment
10
and commitment order a recommendation for placement in the RDAP
11
program, the residential drug and alcohol program, within the
12
Bureau of Prisons.
13
THE COURT:
I will include it in my judgment and
14
commitment order.
It's only a recommendation, as I'm sure
15
you've explained to both his family and the Defendant.
16
Go ahead.
17
MR. SREBNICK:
18
Likewise, I've explained to them you can recommend,
Thank you.
19
but it's not binding, that the Bureau of Prisons attempt to
20
house him in a location as close to Miami as possible.
21
of course, would be the preference, given the number of family
22
members here.
23
24
25
THE COURT:
Miami,
I will also include Florida or as close to
Florida as possible.
Quite frankly, in my mind, the most important

63
recommendation that I can make -- and I will strongly
recommend -- is that he be placed in an appropriate drug and
alcohol abuse program.
And, quite frankly, if that means the best one for him
is away from Florida, as difficult as that may be, I think he
really needs it and would benefit from it.
strongly recommend the RDAP program and recommend Florida or as
close to Florida as possible.
And so I'm going to
I know that you've explained to everyone that that is
10
only a recommendation by the Court and, ultimately, the Bureau
11
of Prisons makes the determination on where a defendant is
12
housed.
13
MR. SREBNICK:
And, finally, to the extent that it's
14
applicable, for the Court to clarify that Mr. Diveroli should
15
receive credit for time served to include all the time since
16
August 19 of 2010, when he was arrested in Orlando.
17
THE COURT:
I'll also recommend, since I've now made
18
my order, Docket Entry 1001 and 1002, that he receive credit
19
time served from August 19th.
20
Is that it?
21
MR. SREBNICK:
22
THE COURT:
23
That's it, Judge.
We're in the recess in the matter
regarding Efraim Diveroli.
24
We now move on to AEY, Inc.
25
Are there any objections to the revised advisory

64
presentence investigation report?
MR. SHAPIRO:
THE COURT:
No, your Honor.

The Court will adopt the factual findings
and guideline applications as contained in the revised advisory
presentence investigation report.
Before going further, I would ask counsel to review
with me the major calculations in the advisory presentence
investigation report.
Probation is one to five years.
10
to $1,018,559.
11
a special assessment of $400.
Restitution in the amount of $149,279.28.
12
Is that correct in its totality?
13
MS. FERNANDEZ:
14
MR. SHAPIRO:
15
THE COURT:
16
The fine is $960,000

And
Yes, your Honor.

Yes, your Honor.
Is there any reason why sentence should
not be imposed against AEY, Inc.?
17
MR. SHAPIRO:
18
THE COURT:
No, your Honor.
19
appropriate sentence.
20
MR. SHAPIRO:
I'll hear now from the parties as to an
Your Honor, if I might, given the fact
21
that the hour is late and we've been here a long time, I would
22
ask that the Court follow the plea agreement and order AEY be
23
on probation for a period of two years and that it be ordered
24
to pay a 500,000-dollar fine, per agreement with the
25
Government.

65
MS. FERNANDEZ:
THE COURT:
That's correct, your Honor.
The Court has considered the statements of
the parties, the revised advisory presentence investigation
report, which contains the advisory guidelines and the
statutory factors set forth in Title 18, United States Code,
Section 3553(a)(1) through (7).
It is the finding of the Court that the Defendant
corporation is able to pay a fine below the guideline range,
which is sufficient to meet statutory requirements.
10
Pursuant to the Sentencing Reform Act of 1984, it is
11
the judgment of the Court that the Defendant corporation, AEY,
12
Inc., is hereby placed on probation for a term of two years as
13
to Count 1.
14
It is further ordered that the Defendant corporation
15
shall pay joint and several restitution with the other
16
Defendants in this case in the amount of $149,279.28.
17
And I believe that, according to information from the
18
probation officer, as of November 30th, 2010, AEY has
19
sufficient monies in a money market account to pay that
20
immediately.
21
Is that correct, Mr. Shapiro?
22
MR. SHAPIRO:
23
THE COURT:
24
25
Yes, your Honor.
Yes.
So the restitution is due in total
immediately.
Restitution will then be forwarded by the Clerk of the

66
Court.
Financial Section, 400 North Miami Avenue, Room 8N09, Miami,
Florida, 33128, and shall be paid within seven business days.
It shall be paid to the US Clerk's Office, Attention:
In addition, there shall be a fine imposed in the
amount of $500,000 which shall also be paid immediately and
forwarded to the United States Clerk's Office, Attention:
Financial Section, 400 North Miami Avenue, Room 8N09, Miami,
Florida, 33128.
business days.
10
And that shall also be paid within seven
11
Probation Office and the United States Attorney's Office are
12
responsible for the enforcement of this order.
13
While on probation, the Defendant corporation shall
14
not commit any federal, state or local crimes; it shall comply
15
with the standard conditions of probation that have been
16
adopted by this Court and with the following special
17
conditions:
18
The Defendant corporation shall make full and complete
19
disclosure of its business finances and financial records to
20
the United States probation officer.
21
shall submit to an audit of its business financial records as
22
requested by the US probation officer.
23
The Defendant corporation
The Defendant corporation shall establish and maintain
24
an effective compliance program which shall comply with all
25
federal rules and regulations pertaining to the reporting of

67
currency transactions and shall employ an appropriately
qualified compliance officer subject to the approval of the
Court.
The compliance officer shall have the responsibility
for implementing the compliance program and overseeing the
compliance program.
The compliance officer shall be a senior-level
management or supervisory-level officer.
program shall remain under the supervision of the Court for the
10
The entire compliance
duration of the term of probation.
11
The Defendant corporation is to inform the United
12
States probation officer of any breach of compliance involving
13
the Defendant company.
14
time of the breach of compliance shall be provided to the US
15
probation officer within three days of the breach.
16
A description of the nature, date and
Within 60 days, the Defendant corporation shall engage
17
the services of an outside independent consultant and auditor
18
subject to the approval of the Court.
19
This independent auditor will audit each aspect of the
20
Defendant's internal controls as to the compliance with
21
applicable rules and regulations to the extent necessary.
22
Subsequent to the first audit, any additional audits
23
shall be performed at the discretion of the probation officer.
24
All audit reports prepared shall be submitted to the probation
25
officer.

68
The corporate representative shall submit its report,
if any, to the probation officer, describing all steps taken to
address any issues in the independent auditor's report, along
with the original independent auditor's report, within 30 days.
In addition to the record retention requirements set
forth in the applicable portions of the Code of Federal
Regulations, the Defendant corporation shall keep the records
required to be retained pursuant to regulatory provisions for
the period specified in the applicable regulation or for a
10
11
period of five years, whichever is longer.

It is further ordered that the Defendant corporation
12
shall pay a special assessment of $400, which shall be due
13
immediately.
14
15
It is my -- are there any remaining counts regarding

AEY, Inc.?
16
MS. FERNANDEZ:
17
We would move to dismiss Counts 2 through 85 of the
18
Yes, your Honor.
superseding indictment.
19
THE COURT:
20
It is my duty to inform the corporation -- is it
21
22
23
24
25
That motion is granted.
14 days for the corporation as well?

MS. FERNANDEZ:
Your Honor, there is an appellate
waiver of both plea agreements.

THE COURT:
But it is the same.
It is my duty to inform you that you have
14 days with which to appeal the judgment and sentence of this

69
Court.
2
3
Should you fail to appeal within that 14-day period,

it will constitute a waiver of your right to appeal.
It is also my duty to elicit from counsel from both
sides fully articulated objections to the Court's finding of
facts and conclusions of law as announced at this sentencing
hearing and to further elicit any objections which either side
may have to the manner in which sentence was imposed in this
case.
10
Are there any objections from the Government?
11
MS. FERNANDEZ:
12
THE COURT:
13
MR. SHAPIRO:
14
There is one more housekeeping matter, though, that
15
None, your Honor.
From the Defendant corporation?

No, your Honor.
I'd like to address.
16
THE COURT:
17
MR. SHAPIRO:
Yes.
At the time of Mr. Diveroli's arrest,
18
there was an account that is presently at Merrill Lynch that
19
contains $70,000 of AEY's money.
20
I believe it was subject to the forfeiture allegations
21
and, pursuant to the plea agreement, the Government has agreed
22
to seek dismissal of the forfeiture allegations as well.
23
24
25
And I would request that that be done so that money

can be unfrozen.
MS. FERNANDEZ:
That's correct, your Honor.

70
1
2
I believe we had unfrozen that.

pursuing the forfeiture.
3
4
But we are not
THE COURT:
The forfeiture count against AEY is
dismissed.
And if you need a written order from me regarding the
70,000, Mr. Shapiro, I'm sure you will make that -- get that to
me.
MR. SHAPIRO:
THE COURT:
Thank you, your Honor.

Anything further?
10
We're in recess in this matter.
Thank you.
11
And we're in recess for the day and the evening.
12
(Proceedings concluded.)
13
14
C E R T I F I C A T E
15
16
17
I hereby certify that the foregoing is an accurate

transcription of the proceedings in the above-entitled matter.
18
19
20
21
22
23
24
25
____________
DATE
/s/Lisa Edwards_____
LISA EDWARDS, CRR, RMR
Official United States Court Reporter
400 North Miami Avenue, Twelfth Floor
(305) 523-5499

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Case 1:08-cr-20574-JAL Document 1052 Entered on FLSD Docket 01/10/2011 Page 1 of 70

UNITED STATES DISTRICT COURT

UNITED STATES OF AMERICA,

4:53 p.m. to 7:10 p.m.

EFRAIM DIVEROLI and AEY, INC.,

ELOISA FERNANDEZ, ESQ., and

FOR THE DEFENDANT

HOWARD SREBNICK, ESQ.,

FOR THE DEFENDANT

HY SHAPIRO, ESQ., and

Case 1:08-cr-20574-JAL Document 1052 Entered on FLSD Docket 01/10/2011 Page 2 of 70

LISA EDWARDS, CRR, RMR

Case 1:08-cr-20574-JAL Document 1052 Entered on FLSD Docket 01/10/2011 Page 3 of 70

United States of America versus AEY Inc., and Efraim

You may be seated.

Diveroli, Case No. 08-20574.

Good afternoon, counsel and Probation.

State your appearances, please, for the record.

Eloisa Fernandez and Frank Tamen on behalf of the

Good afternoon, your Honor.

United States, along with Special Agent Bob Koons.

Good afternoon, Judge.

Howard Srebnick on behalf of Efraim Diveroli; Hy

Shapiro on behalf of AEY, Inc.

Also with us, Attorney Marko

Cerenko, Attorney Cynthia Hawkins, who represented Mr. Diveroli

in the Orlando matter.

THE PROBATION OFFICER:

Sara Garcia with probation.

And Happy New Year to

AEY, Inc. -- and does Mr. Diveroli also represent the

corporation, Mr. Shapiro? --

Yes, your Honor.

Case 1:08-cr-20574-JAL Document 1052 Entered on FLSD Docket 01/10/2011 Page 4 of 70

-- and we're here on the sentencing of

Mr. Diveroli as an individual.

Mr. Diveroli, have you read the advisory presentence

investigation reports for both the corporation and for yourself

Yes, I have, your Honor.

And have you and your attorneys discussed

the advisory presentence investigation report for the

corporation and for you individually?

Yes, we did, your Honor.

My examination of the file indicates that,

in both of these cases, there are no objections filed.

Actually, there was one objection to

the acceptance of responsibility issue.

to the Probation Office, and it is documented in the addendum

That was communicated

So there's an objection regarding

Is that the only objection?

No objections from the corporation?

We just agree with the

Case 1:08-cr-20574-JAL Document 1052 Entered on FLSD Docket 01/10/2011 Page 5 of 70

Probation Office not to grant the -THE COURT:

Well, I'm going to let

Mr. Srebnick make his argument in regard to acceptance of

Mr. Srebnick, go ahead.

I'd like to present for the Court's consideration

Good afternoon, Judge.

Mr. Diveroli himself; his psychologist, Dr. Strumwasser; Rabbi

Sholom Lipsker; and his uncle, Rabbi Shmuley Boteach, to

comment on Mr. Diveroli's acceptance of responsibility not only

lifestyle that he has chosen to live up to today.