Billions are pouring into a clubby, secretive arms market. With Pentagon cash and unusually close Ukrainian military ties, Marc Morales has few peers.
A half-dozen or so men gathered last month for afternoon drinks at the penthouse bar of the 11 Mirrors, one of Kyiv’s swankiest hotels, to discuss the lucrative business of arming Ukrainian troops.
The group included Ukrainian military and government officials, who are always in the market for explosive shells to lob at invading Russian soldiers. The center of attention was their gregarious host, a Florida-based arms contractor named Marc Morales, who regaled them with stories of his new $10 million yacht, the Trigger Happy, and his search for someone to manage his company’s nine-digit portfolio.
And joining the group was a stout, bearded man who served both the buyers and sellers: Vladimir Koyfman, a chief sergeant in the Ukrainian military whom Mr. Morales pays to arrange meetings with his government contacts. That unusual arrangement, legal experts say, tests the boundaries of American and Ukrainian corruption laws prohibiting payments to government officials.
The meeting, which was recounted by two people in attendance, offered a glimpse at a quiet aspect of the Biden administration’s war strategy. The administration has sent Ukraine more than $40 billion in security aid, including advanced weapons like HIMARS rockets and Patriot missiles. But the Pentagon also relies heavily on little-known arms dealers like Mr. Morales, who have the connections needed to secure ammunition, much of it lower-quality or Soviet-caliber, from around the world.
They operate in a notoriously shadowy, clubby arms trade, an industry made even more opaque as Ukraine rolled back years of anticorruption rules. Arms dealers rushed to the country, backed by billions in foreign aid.
Mr. Morales is among Ukraine’s most important such suppliers. The Pentagon has awarded his company about $1 billion in contracts, mostly for ammunition. And records show he has built a roughly $200 million side business selling to the Ukrainians directly.
In addition to employing Sergeant Koyfman, Mr. Morales hired away a longtime adviser to Ukraine’s defense minister, who was fired recently amid concerns over graft and mismanagement. And Mr. Morales’s company has been under investigation by Ukrainian anticorruption authorities over a deal that government officials said was botched.
In that way, the deals with Mr. Morales are reminiscent of Ukraine’s freewheeling past, when arms dealers forged cozy relationships with military officials, contracts were signed in secret and weapons brokers frequently found themselves under investigation. The United States has lectured Ukraine’s leaders for more than a decade about the need to clean up that system.
Mr. Morales, 51, was an unlikely choice as one of the Pentagon’s go-to arms dealers.
Ukrainian soldiers carrying ammunition for a training session in February in the Kyiv region.Credit…Emile Ducke for The New York Times
The Justice Department indicted him in 2009 on conspiracy and money laundering charges after it said he was caught on tape discussing methods for paying bribes to foreign officials. “You just got to be smarter than the government,” Mr. Morales said on one recording. (F.B.I. agents badly botched the case, and prosecutors ultimately dropped the charges.)
But the war changed the calculus for the Ukrainians and Americans alike. The Biden administration, seeking to arm Ukraine but reluctant to commit troops, needs people like Mr. Morales, who proved in Afghanistan and Syria that he could consistently acquire and deliver weapons.
And Ukrainian officials, with national survival at stake, welcomed back local arms dealers whom, before the war with Russia, they had worked hard to sideline. Early in the war, which began in February 2022, officials scrapped many public procurement and transparency rules and invited private brokers to compete with government buyers. Now, after the firing of the defense minister, Oleksii Reznikov, Ukrainian officials are publicly questioning this weapons-at-any-cost strategy.
Mr. Morales declined to be interviewed. Bryan Van Brunt, the general counsel for Mr. Morales’s company, Global Ordnance, said the company followed the law. “Contrary to what we may see in the movies, long-term success depends upon knowing, fully respecting, and following the rules of all countries involved,” he wrote in an email.
Sergeant Koyfman, a Ukrainian American with years of experience as an adviser to Ukraine’s national guard, enlisted when Russia invaded, documents reviewed by The New York Times show. His exact military duties are unclear. He told The Times that he is a chief sergeant in the Ukrainian territorial defense forces, where he supervises and trains a cadre of soldiers. “We are fighters,” he said.
One government official said Mr. Koyfman is a key person to see about weapons, though it was not clear whether that was because of his military position or his role in Global Ordnance.
Vladimir Koyfman, left, and Marc Morales, second from left, after Global Ordnance and Ukroboronprom, a state-owned weapons producer, entered an agreement allowing the Ukrainian government to use Global Ordnance to obtain weapons and ammunition.
For Global Ordnance, Sergeant Koyfman manages contractors in Ukraine and “sets up meetings between our staff and the Ukraine Ministry of Defense,” Mr. Van Brunt said.
Sergeant Koyfman said his military work is unpaid. Mr. Van Brunt was adamant that one job had nothing to do with the other. “Global does not pay for access,” he said. “Not before. Not now. Not ever.” Sergeant Koyfman agreed. “We do training on it every year and sign documents about it,” he said.
Mr. Morales hired Sergeant Koyfman in early 2021, in the months before the company signed a deal with Ukraine to buy explosives. Sergeant Koyfman was photographed alongside him at the contract signing. Other photographs show him attending parties that Mr. Morales threw in Tampa, Fla., this past December and May.
Last year, Global Ordnance posted a video on LinkedIn of Sergeant Koyfman, in uniform, standing beside what he said was a mass grave. “We need artillery. We need rockets,” Sergeant Koyfman says. He does not identify himself as an employee of Global Ordnance, which sells rockets and artillery shells.
American law prohibits companies from paying foreign officials to benefit their business. The law does not exempt volunteers like Sergeant Koyfman. What matters is whether they have influence, said Daniel Richman, a Columbia Law School professor.
Ukrainian law generally prohibits military officials from engaging in paid outside work. Whether Sergeant Koyfman is covered by that law depends on his military duties, not merely his rank. Early in the war, Sergeant Koyfman wrote a letter to Global Ordnance saying that he was “not an employee of the government” but rather a “civilian warfighter.”
Mr. Van Brunt said Ukraine’s government knew about Sergeant Koyfman’s work for Global Ordnance. He said the State Department, which regulates American arms dealing overseas, had also vetted Sergeant Koyfman.
Asked to confirm that, a State Department spokesman only added a new wrinkle. He said he would not “confirm the existence of investigations into possible violations of the International Trafficking in Arms Regulations.” The Times never asked about such an investigation.
Boxes of ammunition at a Ukrainian position last month in the Donetsk region of eastern Ukraine.Credit…Diego Ibarra Sanchez for The New York Times
Separately, Mr. Morales hired Denis Vanash, a longtime adviser to the defense minister. Mr. Vanash left his post early in the war to communicate with the Defense Ministry on behalf of Global Ordnance. Mr. Van Brunt said the ministry confirmed the legality of the hiring.
Mr. Morales’s competitors say that he has an unfair advantage, but it is not his ties to Sergeant Koyfman or Mr. Vanash. It is his ties to the Pentagon.
Arms brokers from around the world are competing for a limited supply of Soviet-style arms, mostly from Eastern Europe, to then sell to Ukraine. With cash pouring in from Washington, Mr. Morales can afford to pay more than his competitors do, several Eastern European arms dealers complained. He then makes good on his American contracts and buys more ammunition on his own to sell to Ukraine directly.
In several cases early in the war, for instance, Mr. Morales outbid rivals to buy explosive shells from Bulgarian arms factories, two competitors said.
Some of the competitors, officials and arms industry figures spoke on the condition of anonymity, either because Ukrainian weapons contracts are classified or because they did not want to get drawn into disputes with Mr. Morales and the Ukrainian government.
There is nothing illegal about outbidding competitors. But it shows how the Pentagon is shaping the global arms market and creating wealthy, politically connected weapons dealers. Ukrainian anti-corruption groups have said the billions of dollars pouring into Eastern European arms markets could shape politics and militaries long after the war’s end.
In some ways, complaints about Mr. Morales boil down to the fact that he is doing a better job than others. He has moved missiles, shells, grenades and armored vehicles to Ukraine from Bulgaria, Egypt, Jordan and Pakistan, according to government documents and interviews with weapons traders and government officials. And he is far from the only weapons dealer with relationships in the Ukrainian government.
Mr. Morales’s weapons career almost ended after his indictment was unsealed in 2010. In a sting, prosecutors said, an informant recorded him discussing a supposed arms deal involving payments to an official in the West African nation of Gabon.
He left the industry and, for about two years, sold items like chaise longues for his father-in-law’s outdoor furniture company. “He took the time to reflect on his life, his relationship with his wife and family, and with God,” Mr. Van Brunt said.
In 2012, the federal case disintegrated over issues including the F.B.I.’s handling of its informant. A judge chastised the Justice Department.
A year later, Mr. Morales started Global Ordnance as an arms business consultancy, drawing on more than a decade of experience. He bought a defense contractor and delivered arms to the Pentagon for use against terrorist groups like the Islamic State. His network, spanning the United States, Eastern Europe and the Middle East, proved reliable, and the Pentagon soon became his biggest customer. Global Ordnance won more than $78 million in defense contracts from 2016 to 2019, public records show.
Weeks before Russia invaded Ukraine, the Pentagon awarded Global Ordnance a five-year contract worth up to $750 million to help arm American allies. That became a vehicle for arming Ukraine. Hundreds of millions of additional dollars followed.
The Pentagon declined to comment on Global Ordnance’s contracts.
Mr. Morales’s big break in Ukraine came early in the war. He had a warehouse full of ammunition in Bulgaria that the Pentagon had bought for use in Afghanistan. The Pentagon approved sending it instead to Ukraine in January 2022. It was up to Global Ordnance to get it there.
Mr. Morales made that happen. Sergeant Koyfman worked to redirect the ammunition to Ukraine in his role as a Global Ordnance contractor, Mr. Van Brunt said.
That made Mr. Morales invaluable in the war’s early days and endeared him to Ukrainian officials.
But there has also been friction.
Ukrainian soldiers with a grad multiple rocket launcher last year near Mykolaiv, Ukraine.Credit…Finbarr O’Reilly for The New York Times
An unintended consequence of Ukraine’s frantic buying was a competition between state-owned firms and private dealers. That drove up prices, costing Ukraine money. When the government buys weapons from state-owned companies, the government profits off the deal. When it buys from private sellers, the brokers profit.
That is legal, but has at times frustrated Ukrainian officials. One example involved the purchase of armored vehicles, which the military was desperate to receive. Early in the war, a government-owned company called Ukrinmash negotiated a roughly $65 million deal with an Egyptian seller to buy nearly 200 vehicles, said a person involved in the deal.
Then the deal stalled.
Soon after, Mr. Morales emerged with a contract to provide similar vehicles at similar prices. The difference was that Global Ordnance, not the government-owned company, would earn the profits.
Problems followed. The vehicles arrived improperly outfitted, said Volodymyr Havrylov, an assistant defense minister in Ukraine. Anti-corruption officials began investigating the deal, he said. Investigators have asked questions about both Mr. Morales and the Defense Ministry officials who authorized the contract, according to one person who was interviewed.
The Defense Ministry said that the investigation had been “eliminated.” Anti-corruption officials would not confirm that.
Mr. Van Brunt said that Ukrainian authorities routinely investigated military deals. “This is an ‘investigation,’ and to conflate it with what the public may understand to be an investigation would be inaccurate,” he wrote in an email. He declined to comment on the deal itself.
By the end of last year, Mr. Morales’s success was evident at home in Tampa. Global Ordnance flew its employees in from Kyiv, Ukraine’s capital, to attend a Christmas party. Mr. Morales posted on Facebook a photograph of himself with his colleagues: Sergeant Koyfman wore wraparound sunglasses and a black T-shirt with an American flag-painted skull. Mr. Vanash wore a traditional Ukrainian shirt embroidered with red and yellow flowers.
Mr. Morales sees a bright future in Ukraine. At the 11 Mirrors last month, conversation turned toward “large contracts that were about to be awarded,” Mr. Van Brunt said. Officials asked whether the company could handle big new deals.
Mr. Morales assured them that it could.
Reporting was contributed by Natalia Yermak, Daria Mitiuk, John Ismay and Tomas Dapkus.