[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

________________________

No. 14-11576

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D.C. Docket Nos. 1:12-cv-20216-JAL,

1:08-cr-20574-JAL-2

EFRAIM DIVEROLI,

AEY, INC.,

 Petitioners – Appellants,

versus

UNITED STATES OF AMERICA,

 Respondent – Appellee.

________________________

Appeal from the United States District Court

for the Southern District of Florida

_______________________

(October 9, 2015)

Before MARCUS, WILLIAM PRYOR, and JILL PRYOR, Circuit Judges.

WILLIAM PRYOR, Circuit Judge: 

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Efraim Diveroli’s story is so outlandish that it has inspired an article in 

Rolling Stone, a book, and a forthcoming comedy film. See Guy Lawson, How Two 

Stoner Kids from Miami Beach Became Big-Time Arms Dealers—Until the 

Pentagon Turned on Them, Rolling Stone, Mar. 31, 2011, at 52; Guy Lawson, 

Arms and the Dudes: How Three Stoners from Miami Beach Became the Most 

Unlikely Gunrunners in History (2015); Borys Kit, Jonah Hill to Star in Crime 

Comedy ‘Arms and the Dudes,’ The Hollywood Reporter (Dec. 3, 2014, 4:56 PM),

http://www.hollywoodreporter.com/news/jonah-hill-star-crime-comedy-753760.

By age 21, Diveroli started his own company, became an international arms dealer, 

and won a $298 million contract with the United States Army to provide 

ammunition to Afghanistan. But his meteoric rise would not last. The contract 

prohibited Diveroli’s company, AEY, from acquiring ammunition from Chinese 

manufacturers. When Diveroli learned that his primary supplier obtained its 

ammunition from China, he and his cohorts concealed the origin of the ammunition

and falsely attested that it was from Albania. A grand jury indicted Diveroli, AEY, 

and his coconspirators on 85 counts of major fraud, wire fraud, and conspiracy to 

commit fraud. After Diveroli’s attorney advised his client about the charges and 

estimated that he faced a sentence of 168 to 210 months if convicted, Diveroli

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pleaded guilty to one count of conspiracy for which the district court sentenced 

him to 48 months of imprisonment. 

Diveroli moved to vacate his sentence, 28 U.S.C. § 2255, on the ground that 

his attorney miscalculated his potential sentencing exposure, which Diveroli argues

was only 70 to 87 months. Diveroli argues that he would have proceeded to trial 

but for his counsel’s error. The district court denied his motion without an 

evidentiary hearing. Because the record establishes that Diveroli faced 

overwhelming evidence of guilt and had no viable defenses, we affirm.

I. BACKGROUND

Diveroli was the president and owner of AEY, Inc., a Florida corporation 

that, from 2006 to 2007, was engaged in the business of procuring arms and 

ammunition. In January 2007, the United States Army Sustainment Command 

awarded AEY a contract worth $298 million to provide ammunition to the Islamic 

Republic of Afghanistan. The contract prohibited AEY from obtaining any 

ammunition “‘directly or indirectly’ from Communist Chinese military 

companies.” 

After Diveroli learned that AEY’s Albanian supplier, Military Export and 

Import Company, obtained ammunition originally manufactured in China, he made 

the following inquiry to the United States Department of State: “We have been 

offered Chinese ammunition that has been sitting for about 20 years with a 

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company in Albania. Is it legal for us (as a US company) to broker this material?” 

The State Department replied, “U.S. policy, per part 126.1(a) of the [International 

Traffic in Arms Regulations] . . . would not authorize the transaction. Exceptions 

to the policy require a presidential determination.” Diveroli then asked if there was 

any exception that would allow the sale of Chinese ammunition if it was stored in a 

friendly country for a sufficient period of time. The State Department responded, 

“[T]here is no way that the transaction which you propose could be so justified.” 

After receiving these emails, Diveroli and his cohorts decided to conceal the 

source of the ammunition. They first considered painting over the metal cases that 

had Chinese writing and scraping the Chinese markings off of the wood crates. 

They eventually decided to repackage the Chinese ammunition in cardboard boxes

to conceal its source. AEY delivered approximately 35 shipments of Chinese 

ammunition in partial fulfillment of the contract, and the Army paid AEY over $10 

million. The contract required AEY to attach a certificate of conformance to each 

shipment. In each certificate, Diveroli attested that the shipment conformed in all 

respects to the terms of the contract and identified Albania’s Military Export and 

Import Company as the “Manufacturer (point of origin).” 

When federal agents discovered the deception, AEY had already delivered 

$6.5 million worth of ammunition. The Army terminated the contract with AEY

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and sustained costs of over $40,000 to reissue the contract to another supplier. 

AEY derived profits of approximately $360,000 from the sale of the 

nonconforming ammunition. 

A grand jury indicted AEY and Diveroli on 85 and 84 counts respectively. 

The indictment charged AEY and Diveroli with 35 counts of making false 

statements to a federal agency, 18 U.S.C. § 1001(a)(2); 35 counts of major fraud 

against the United States, id. § 1031; and 13 counts of wire fraud, id. § 1343. The 

indictment charged AEY with an additional count of wire fraud. It also charged 

AEY and Diveroli with one count of conspiracy to commit the substantive

offenses, id. § 371.

Diveroli and AEY, through Diveroli, pleaded guilty to conspiracy in 

exchange for the dismissal of the substantive counts. The parties agreed that the 

relevant loss amount for sentencing purposes was more than $400,000 and less 

than $1,000,001. See United States Sentencing Guidelines Manual § 2B1.1(b)(1). 

The plea agreement barred Diveroli and AEY from seeking a sentence below the 

guidelines range and from appealing their sentences or collaterally attacking their 

sentences under section 2255. 

The presentence investigation report calculated a base offense level of 6, a 

14-level increase for a loss amount more than $400,000 and less than $1,000,001, a 

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2-level increase because a substantial part of the fraudulent scheme was committed 

outside the United States, and a 4-level increase for Diveroli’s role as a leader or 

organizer. The district court reduced the offense level by 2 for acceptance of 

responsibility. Diveroli’s final offense level was 24, his criminal history category 

was I, and his guidelines range was 51 to 63 months, with a statutory maximum of 

60 months, see 18 U.S.C. § 371. 

The district court sentenced Diveroli to 48 months of imprisonment, 

followed by three years of supervised release, and it ordered him to pay restitution 

and a criminal fine. The district court sentenced AEY to two years of probation, a 

$500,000 criminal fine, and restitution. 

Diveroli and AEY filed a motion to vacate their convictions and sentences, 

28 U.S.C. § 2255. They argued that Diveroli’s counsel had been ineffective under 

the Sixth Amendment because he miscalculated Diveroli’s sentencing exposure.

They alleged that Diveroli’s counsel estimated his sentencing exposure to be 168 

to 210 months, based on a loss amount of up to $30 million. They argued that this 

advice was erroneous because Diveroli’s sentencing exposure at trial would have 

been 63 to 70 months under the correct loss amount. Diveroli and AEY alleged that 

had it not been for the incorrect advice, they would have proceeded to trial. They

requested an evidentiary hearing on their claims. The district court denied the 

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motion, and we granted a certificate of appealability with respect to the following

question: “Whether the district court erred in denying, without an evidentiary 

hearing, Diveroli’s claim that his counsel rendered ineffective assistance by 

incorrectly advising him what his sentencing exposure would be if he proceeded to 

trial and was convicted.” 

II. STANDARDS OF REVIEW

We review the denial of an evidentiary hearing for abuse of discretion. Aron 

v. United States, 291 F.3d 708, 714 n.5 (11th Cir. 2002). “A district court abuses 

its discretion if it applies an incorrect legal standard, applies the law in an 

unreasonable or incorrect manner, follows improper procedures in making a 

determination, or makes findings of fact that are clearly erroneous.” WinthropRedin v. United States, 767 F.3d 1210, 1215 (11th Cir. 2014) (quoting Citizens for 

Police Accountability Political Comm. v. Browning, 572 F.3d 1213, 1216–17 (11th 

Cir. 2009)) (internal quotation marks omitted). “When we review the denial of a 

motion to vacate, we review legal conclusions de novo and findings of fact for 

clear error.” Stoufflet v. United States, 757 F.3d 1236, 1239 (11th Cir. 2014)

(citation omitted).

III. DISCUSSION

As an initial matter, we dismiss AEY from this appeal. The certificate of 

appealability does not mention the judgment of conviction and sentence against 

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AEY. And under section 2255, a movant must be “[a] prisoner in custody under 

sentence of a [federal] court.” 28 U.S.C. § 2255(a). “Because a corporation cannot 

be held in custody, [it] cannot obtain relief under § 2255.” United States v. Rad-OLite of Philadelphia, Inc., 612 F.2d 740, 744 (3d Cir. 1979). AEY instead must file 

a petition for a writ of error coram nobis to challenge its conviction collaterally. 

See id.; see also United States v. Morgan, 346 U.S. 502, 511, 74 S. Ct. 247, 252

(1954) (“We do not think that the enactment of § 2255 is a bar to [a] motion [for 

writ of error coram nobis] . . . .”). 

Diveroli argues that his counsel’s miscalculation of his sentencing exposure 

violated his right to effective counsel under the Sixth Amendment and that the 

district court should have granted him an evidentiary hearing to prove this claim. 

To prevail on his claim under the Sixth Amendment, Diveroli must establish that 

his “counsel’s representation fell below an objective standard of reasonableness” 

and that “there is a reasonable probability that, but for counsel’s unprofessional 

errors, the result of the proceeding would have been different.” Hill v. Lockhart, 

474 U.S. 52, 57, 106 S. Ct. 366, 369 (1985) (quoting Strickland v. Washington, 466 

U.S. 668, 688, 694, 104 S. Ct. 2052, 2065, 2068 (1984)) (internal quotation marks 

omitted). We assume without deciding that Diveroli’s counsel miscalculated the 

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applicable guidelines range and that this error “fell below an objective standard of 

reasonableness.” Id. (quoting Strickland, 466 U.S. at 688, 104 S. Ct. at 2064).

“In the context of guilty pleas, . . . the defendant must show that there is a 

reasonable probability that, but for counsel’s errors, he would not have pleaded 

guilty and would have insisted on going to trial.” Id. at 58–59, 106 S. Ct. at 370. 

“Moreover, to obtain relief on this type of claim, a petitioner must convince the 

court that a decision to reject the plea bargain would have been rational under the 

circumstances.” Padilla v. Kentucky, 559 U.S. 356, 372, 130 S. Ct. 1473, 1485 

(2010). Diveroli argues that it would have been rational to go to trial on the 

defenses of literal truth and public authority, and he requests an evidentiary hearing 

to prove that his defenses were viable. 

Diveroli makes two arguments. First, he argues that the district court abused 

its discretion by not granting an evidentiary hearing on his defenses of literal truth 

and public authority. Second, he argues that the district court used the wrong legal 

standard in denying his motion. We address each argument in turn.

A. The District Court Did Not Abuse its Discretion in Denying an 

Evidentiary Hearing on Diveroli’s Affirmative Defenses.

Diveroli argues that he would have proceeded to trial on defenses of literal 

truth and public authority and that the district court should have granted an 

evidentiary hearing to evaluate the strength of those defenses. “[I]f the petitioner 

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‘alleges facts that, if true, would entitle him to relief, then the district court should 

order an evidentiary hearing and rule on the merits of his claim.’” Aron, 291 F.3d 

at 714–15 (quoting Holmes v. United States, 876 F.2d 1545, 1552 (11th Cir.1989)). 

But “a district court need not hold a hearing if the allegations are ‘patently 

frivolous,’ ‘based upon unsupported generalizations,’ or ‘affirmatively 

contradicted by the record.’” Winthrop-Redin, 767 F.3d at 1216 (quoting Holmes, 

876 F.2d at 1553). Because both defenses were frivolous, the district court did not 

abuse its discretion by denying an evidentiary hearing.

1. Defense of Literal Truth

Diveroli argues that he would have gone to trial and asserted that the 

statements he made on the certificates of conformance were literally true. The 

district court ruled that the defense of literal truth would not have succeeded at trial 

and that Diveroli would not have insisted on going to trial on this defense. “To 

establish that [the defendant] participated in ‘a scheme or artifice to defraud,’ the 

government needed to prove only ‘a material misrepresentation, or the omission or 

concealment of a material fact calculated to deceive another out of money or 

property.’” United States v. Merrill, 685 F.3d 1002, 1012 (11th Cir. 2012) (quoting 

United States v. Bradley, 644 F.3d 1213, 1238 (11th Cir. 2011)).

The United States identified two material misrepresentations made by 

Diveroli in each certificate of conformance. First, Diveroli falsely attested that the 

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shipments conformed to the terms of the contract. The contract incorporated the 

Prohibition on Acquisition of United States Munitions List Items from Communist 

Chinese Military Companies, which states, “Any supplies or services covered by 

the United States Munitions List that are delivered under this contract may not be 

acquired, directly or indirectly, from a Communist Chinese military company.” 48 

C.F.R. § 252.225-7007(b). Second, in the field for “Manufacturer (point of 

origin),” Diveroli falsely wrote Albania. Diveroli argues that “Manufacturer (point 

of origin)” could refer to either the place of manufacture or the point of shipment. 

The district court did not abuse its discretion in refusing to conduct an 

evidentiary hearing. Overwhelming evidence established that Diveroli’s answers

on the certificates of conformance were false. This evidence included photographs 

of ammunition containers with Chinese markings, correspondence with the State 

Department admitting that the ammunition was manufactured in China, and 

internal emails discussing the best method of concealing the origin of the 

ammunition. Diveroli’s defense of literal truth is “patently frivolous” and 

“affirmatively contradicted by the record.” Winthrop-Redin, 767 F.3d at 1216

(quoting Holmes, 876 F.2d at 1553) (internal quotation marks omitted).

2. Defense of Public Authority

Diveroli also argues that the district court abused its discretion by not 

granting an evidentiary hearing for his defense of public authority. To establish this

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defense, Diveroli would have to prove that “he reasonably relied on the authority 

of a government official to engage him in a covert activity.” United States v. 

Baptista-Rodriguez, 17 F.3d 1354, 1368 n.18 (11th Cir. 1994). And the official 

must have “in fact had the authority to empower the defendant to perform the acts 

in question. . . . [R]eliance on the apparent authority of a government official is not 

a defense in this circuit, because it is deemed a mistake of law, which generally 

does not excuse criminal conduct.” Id.

The district court again did not abuse its discretion. Diveroli alleges that he 

met with Robert Newsome of the United States Embassy in Albania in May 2007

and that Newsome knew that AEY was sending shipments of “Soviet & Chinese 

arms to the Afghan government.” Diveroli points to an email from Newsome as 

evidence that Newsome tacitly endorsed the shipment of Chinese ammunition. But 

in the email, Newsome wrote that the “Embassy sees no role at this point for us to 

intervene on AEY’s behalf under these circumstances.” This statement offered no 

endorsement of the illegal shipment of Chinese arms, and Diveroli fails to allege 

that Newsome had the actual authority to approve the shipments. Diveroli instead 

knew that Newsome lacked the authority to permit the shipment of Chinese arms

because, a month before Diveroli’s meeting with Newsome, the State Department 

told Diveroli, “Exceptions to the policy require a presidential determination.” And 

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in response to Diveroli’s inquiry, the State Department told him that he could not 

ship Chinese ammunition under the contract. Diveroli’s defense of public authority 

is frivolous and contradicted by the record.

B. Any Error Committed by the District Court in Determining Whether 

Diveroli Suffered Prejudice Was Harmless.

Diveroli argues that the district court applied the wrong legal standard for 

prejudice in denying his motion to vacate, but any error was harmless. The district 

court cited Atkins v. Attorney General of Alabama for the proposition that 

prejudice should be evaluated from the “perspective of counsel.” 932 F.2d 1430, 

1432 (11th Cir. 1991). We agree with Diveroli that the correct legal standard 

required the district court to determine whether Diveroli “would not have pleaded 

guilty and would have insisted on going to trial.” Hill, 474 U.S. at 59, 106 S. Ct. at 

370. Despite this misstep, the district court also determined that “there is not a 

reasonable probability that . . . [Diveroli] would have insisted on going to trial.”

Because the district court determined that there was not a reasonable probability 

that Diveroli would have insisted on going to trial, any error “had no substantial 

influence on the outcome, and . . . reversal is not warranted.” United States v. 

Hawkins, 905 F.2d 1489, 1493 (11th Cir. 1990). 

The district court correctly determined that Diveroli was not entitled to 

relief. To obtain relief, Diveroli had to “convince the court that a decision to reject 

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the plea bargain would have been rational under the circumstances.” Padilla, 559 

U.S. at 372, 130 S. Ct. at 1485. But the record establishes that Diveroli faced 

overwhelming evidence of guilt and had no valid affirmative defenses. 

It would not have been rational for Diveroli to reject his plea bargain. In 

exchange for Diveroli pleading guilty to the conspiracy count, the government 

dismissed 83 substantive counts against him and agreed to recommend a 2 or 3 

level decrease for acceptance of responsibility. The conspiracy charge had a 

maximum sentence of only five years of imprisonment, see 18 U.S.C. § 371, but 

the dismissed wire-fraud charges had maximum sentences of twenty years of 

imprisonment, see id. § 1343. Diveroli could not establish that it would have been 

rational to reject this plea agreement given its favorable terms and his near-certain 

conviction. 

IV. CONCLUSION

We AFFIRM the denial of Diveroli’s motion to vacate. 

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