Arms Merchants of South Central
Did the rich and intrigue-filled Botach family get a pass from Henry Waxman?
Penn Bullock • LA Weekly
The Botach family of Los Angeles is among the more unusual of the very rich. Yoav Botach is a wealthy landlord. He founded, and his son now owns, an arms dealership in an unsettling locale for one: South Central. And his grandson was convicted of conspiracy for peddling to the U.S. Army decomposing ammunition — so old that it was traced to the factories of Mao Tse-tung — as part of a $300 million contract to arm the Afghan government.
But what is also startling in the weird saga of this prominent L.A. family is the silence of Congressman Henry Waxman of Beverly Hills, who led a congressional investigation into the ammo fraud and vowed to get to the bottom of it.
As Waxman said, his inquiry in 2008 aimed to answer a fundamental question: How did Botach's inexperienced 21-year-old grandson Efraim Diveroli "get a sensitive, $300 million contract to supply ammunition to Afghan forces?"
Two years later, Waxman refuses to speak about it with L.A. Weekly. But with an ugly palimony suit simmering in L.A. between family patriarch Botach and his common-law wife, Judith Boteach, she's now talking. And she points to a contract that may link the South Central arms firm run by Botach's son, Bar-Kochba Botach, to the grandson's disgraced firm, AEY Inc., in Miami Beach.
Yoav and Bar-Kochba Botach refused to comment on Boteach's allegations when contacted by the Weekly. (Boteach explains to the Weekly that she spells her last name differently because Botach changed his name for simplicity.)
According to Boteach, Diveroli, her step-grandson, who is awaiting sentencing from Judge Joan A. Lenard in U.S. District Court in Miami after hawking the Mao-era material, spent summers as a teen doing odd jobs at Botach Tactical, the firm in South Central. She says a 2004 federal contract granted to Botach Tactical implies another connection: On the contract, the Botach firm lists its address as young Diveroli's AEY address — in Miami Beach.
Botach Tactical sells arms to U.S. police and military forces, as its Web site advertises. Last year, among other revenue, it took in just less than $6 million in federal defense contracts, according to USASpending.gov.
A profile of the company discovered by blogger Lindsay Beyerstein and cited on Fedvendor.com — a Web site for companies interested in contracting with the government — lists Botach Tactical's physical address as 3423 West 43rd Place in South Central L.A. But the profile identified its mailing address as 925 41st Street, Suite 306, Miami Beach — again, the mailing address for Diveroli's fraud-mired AEY Inc.
Waxman's silence on Diveroli's fleecing of the Army comes as the palimony case between Boteach and Botach plays out, from Los Angeles to Israel.
In March 2006, the State of Israel accused Botach's brother and business partner in L.A., Shlomo Botach, of "using professional money launderers" to transfer $860,000 from the U.S. through Swiss and Uruguayan banks to an account in Israel, code-named "Ezra 26." The court case covered transfers totaling $331,000.
In court documents translated from Hebrew for the Weekly, Shlomo stated he was moving the money to Israel so that Judith Boteach couldn't access it during the palimony dispute.
But the State of Israel alleged that the money was wired in small batches so that it could be slipped past authorities.
Though the documents show that Shlomo claimed he was acting on Botach's behalf, Botach is not accused of any wrongdoing.
Nevertheless, the documents shed light on how the broader business is conducted: "Yoav is the one that handles the financial end of the partnership," Shlomo states in the documents, insisting he would "not question the head of the family [Yoav] with regards to the financial decisions he makes."
It may be that L.A. politicians worry about their relationships with wealthy arms merchants and landowners. In 2006, the L.A. Daily News reported that Botach co-owns the South Central arms firm — and 144 commercial properties across L.A.
"Some are restaurants, garages, buildings where they manufacture clothes," Boteach says. "A lot of them are small businesses, and some are apartment buildings."
She says that Botach lives in Waxman's 30th Congressional District, and that her estranged husband wields influence with politicians. "[Yoav] supports a lot of the City Council members and the governor. There were special lunches, dinners and fund-raisers."
The connections could be seen last year, when Mayor Antonio Villaraigosa and City Council President Eric Garcetti attended the Beverly Hills launch of the star-studded charity Turn Friday Night Into Family Night, founded by Rabbi Shmuley Boteach, the former spiritual adviser to Michael Jackson.
Shmuley is Botach's son, Judith Boteach's stepson, and Diveroli's uncle. A video of Villaraigosa touting Turn Friday Night Into Family Night is featured on its Web site.
Judith Boteach tells the Weekly that life with Botach was a "total nightmare," even as he hosted world leaders, including former Israeli Prime Minister Ariel Sharon.
After Botach's 2002 split from Boteach, a former Hollywood makeup artist, she claimed she was unaware they had never been legally married. Botach's lawyers insisted Boteach knew they were not married.
In August 2009, L.A. Superior Court Judge Warren Ettinger upheld her claims of assault, battery, emotional distress and unpaid work, and awarded her $250,000 plus legal costs, but rejected her palimony claim.
Her attorney, Robert W. Hirsh, declared to the Daily News in 2006: "We would not be surprised if [Botach's] net worth is $700 million." Yet Botach is appealing to force her to cover his legal bills. Hirsh calls the appeal frivolous and says, "We are now taking steps to enforce the judgment."
Not everyone is buying brother Shlomo Botach's explanation for why he was moving money to Israel. In 2006, Jaffa District Court Judge Kobi Vardi in Tel Aviv called his stated reason — that he was keeping it out of Boteach's hands — an "unacceptable fabrication."
Vardi said Shlomo Botach was part of a "sophisticated and well-lubricated organization" that intended to launder money.
Shlomo argued, "They didn't intend to hire shady characters for the purpose of transferring funds to Israel ... as it is 'clean,' legitimate money derived from their business in the USA." But in May 2006, the Israeli judge ordered that half of the cash be confiscated.
The Botach family soon took another blow: Diveroli emerged as the owner of an arms firm, AEY Inc., in Miami Beach, which appeared on a U.S. Department of State watch list for contract fraud and violation of the Arms Export Control Act.
Despite this, the tiny firm was awarded the $300 million U.S. Army defense contract that made it the main supplier of ammo to the Afghan government.
The Waxman-led congressional investigation later found that AEY had previously been caught selling the military "junk." The fact that young Diveroli subsequently won a key Army contract involving Afghanistan was "a case study in a dysfunctional [federal] contracting process," investigators found.
According to The New York Times, Diveroli purchased some ammo in Albania. It was marked for destruction by NATO, manufactured by Mao Tse-tung and found in moldy crates marked "Made in China," U.S. inspectors found. He and three employees were indicted on numerous counts of fraud and conspiracy.
Incredibly, while awaiting trial, Diveroli completed two more U.S. defense contracts for about $10 million, according to Glenn Furbish, a federal official.
Diveroli was found guilty in August 2009 of one count of conspiracy. Diveroli referred questions to his lawyer, who did not respond to the Weekly's e-mailed inquiry.
Bar-Kochba Botach, the current owner of Botach Tactical, complained to The New York Times that Diveroli, after working for him as a teenager, "just left me and took my customer base."
The Weekly asked him about documents in which Botach Tactical's address matches that of Diveroli's firm in Miami. "No comment," he says.
Boteach sums up Waxman's failure to figure out how her step-grandson defrauded a sophisticated power like the federal government: "He was a kid. He was a kid!" she says.