A 22-year-old munitions dealer and others in his Miami Beach company were arrested on charges of selling prohibited Chinese weaponry to the U.S. government to supply allied forces in Afghanistan, according to law enforcement officials.
Efraim Diveroli, president of AEY Inc., and three other employees were arrested Thursday night and Friday morning -- accused of conspiring to misrepresent the types of munitions they sold to the U.S. Department of Defense as part of a $300 million Army weapons contract, officials said.
Diveroli and the others are charged with violating the Arms Export Control Act stemming from an investigation that began earlier this year by the Pentagon and Immigration and Customs Enforcement.
Diveroli's attorney, Hy Shapiro, could not be immediately reached for comment. The U.S. attorney's office and ICE in Miami declined to comment. Diveroli and the other defendants are expected to have their first appearances in federal court in Miami Friday afternoon.
Diveroli's grandfather, Angelo, who lives in North Miami-Dade County, said he learned about his grandson's arrest Thursday night from family members.
"That's all I know," Angelo Diveroli, 72, said. "I think there's somebody behind this. I think it's political."
Diveroli's government weapons license was suspended in late March, when the New York Times initially broke the improbable story of the Miami Beach munitions maverick. He had allegedly misled the Army by saying that most of his machine-gun cartridges were Hungarian -- not Chinese. The munitions were for Afghan forces fighting the Taliban and al Qaeda insurgents.
A copy of the suspension notice, obtained by The Miami Herald from the Army, said that on Nov. 25, Diveroli provided military officials with false or misleading'' information.
Diveroli indicated that the rounds of ammunition for AK-47s and other assault rifles were made in Hungary between 1965 and 1975, the notice said, but the Army discovered that most of the munitions were, in fact, manufactured in China between 1962 and 1974.
In the March 25 suspension notice, Army officials cited a prohibition'' on sales of communist Chinese military munitions to the U.S. government.
In a related document, the Army summarized the history of Diveroli's company, AEY, which was founded by his father in Miami Beach in 1999, noting that it started out selling surplus goods, wholesale scrap and waste materials.
Diveroli's father is not among the four AEY employees arrested on Friday, according to law enforcement officials.
In an earlier interview, Diveroli's grandfather, Angelo, described him as a "weapons genius'' who was being unfairly treated by the government and other weapons contractors.
Diveroli's fortunes rose with U.S. military interventions in Afghanistan and Iraq.
The company landed its first military contract in 2004, generating revenue of more than $1 million. But Diveroli's business with the Defense Department grew so dramatically that he snared contracts worth $200 million last year. The largest was to supply ammunition to the Afghan National Police and the Afghan National Army, which were fighting al Qaeda and Taliban insurgents.
All that government contract work transformed Diveroli's lifestyle.
While living in Miami Beach, AEY's youthful president has had several run-ins with the law but no criminal convictions, Miami-Dade court records show.
Since 2005, Diveroli was accused of physically assaulting and harassing a former girlfriend. He also was arrested on charges of beating up a valet parker at his condo. Police said he was carrying a fake Florida driver's license that indicated he was four years older.
His latest legal problem is still pending. On March 5, Diveroli was again arrested by Miami Beach police -- this time on a drunk-driving charge. He was released the same day on a $1,000 bond, said Janelle Hall, a Miami-Dade Corrections spokeswoman.
Diveroli might be the only U.S.-approved munitions supplier with a MySpace account. He kept his active until 2005. In his biography, he describes himself as "a super nice guy."
And he confesses: "I had problems in high school so I was forced to work most of my teen years and I probably grew up way too fast. I finally got a decent apartment and I'm content for the moment, however, I definitely have the desire to be very successful in my business and this does take up a lot of my time."
Miami Herald staff writer Luisa Yanez contributed to this report.