Hy Shapiro To the Rescue!

Would you buy decades-old Hungarian or possibly Chinese ammo from this young Miami Beach clubgoer? For $300 million?

Apparently the Pentagon did:

Oh, man. Not cool. Not only has the Army suspended any further contracts for AEY (the shady contractor run by 22 year-old Efraim Diveroli), but the U.S. attorney in Miami along with Department of Justice prosecutors in Washington have picked up the case, The Miami Herald reports.

The probe launched as a result of an audit by the Army's Procurement Fraud Branch (it's unclear whether the probe launched as a result of The New York Times' inquiries), where officials determined that Diveroli appeared to have lied when he claimed that the ammunition he was providing came from Hungary when it in fact was made in China -- which he would have done because the Army prohibits using Chinese ammo.

If Diveroli did lie to the government, that would be a crime. You can read the Army's audit letter, in addition to the letter to Diveroli suspending his ability to win any further contracts, here.

The Herald also uncovered a second arrest for Diveroli: one for drunk driving earlier this month. That's the mugshot above. The earlier one, as the Times reported in the initial story, was for beating up a parking valet and getting busted with a fake ID (ironically just after his 21st birthday). The mugshot for that one is to the right. I guess sometimes the pressures of being a big time defense contractor are just too much.

But there is a silver lining. This kid had the good sense to hire Hy Shapiro, who sprung to his defense:

His Miami lawyer, Hy Shapiro, said Thursday his client's company received the suspension notice Wednesday but was awaiting further documentation from the Army.

"There's nothing I'm prepared to say right now," he said.

God do I love Miami.

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Hy Shapiro Raises Interesting Legal Question.

Let's say you're a nice young Miami Beach arms dealer, interested in shipping huge amounts of ancient Chinese munitions, stored in dubious conditions in Albania for decades, to our fightin' boys in Afghanistan.

Oh -- you also want to grossly overcharge American taxpayers in the process, and still have time to take in a nice dinner at Barton G before nightfall.

Just another American patriot, you say?

Not so fast -- turns out it became illegal in 1989 to acquire Chinese munitions:

Now Diveroli's lawyers are pushing to have the indictment dismissed, saying he didn't violate the U.S. embargo because the Albanians acquired the Chinese munitions during the Cold War -- some 15 to 27 years before the embargo took effect. Diveroli didn't buy them from Albania until late 2007.

''Despite the fact that the embargo was not imposed until 1989, the charges are based on the theory that even trading in pre-embargo munitions violates the embargo and [federal] regulation,'' defense lawyers Howard Srebnick and Hy Shapiro wrote in court papers.

They said the government's criminal case is ``mistaken, as a matter of law.''

But prosecutors counter that defense lawyers have created ambiguity where there is none.

Prosecutors said a Defense Department regulation in AEY's contract prohibits suppliers from providing munitions ''acquired directly or indirectly from Communist Chinese military companies.'' They said the word ''indirectly'' applies to the company's purchase of Chinese-made weapons from the Albanian government -- regardless of the passage of time -- and its subsequent sale to the U.S. Army.

U.S. District Judge Joan Lenard could rule on the defense's dismissal request at any time.

Hmm, methinks Hy might be on the losing side of this one.

It doesn't help that prosecutors also allege:

In 2007, the State Department e-mailed the young Miami Beach munitions dealer to tell him that he could not sell Chinese weaponry to the U.S. government to help supply allied forces in Afghanistan, according to an indictment.

But Diveroli, president of AEY, and three of his employees didn't take no for an answer, prosecutors said. They even arranged to have ''Made in China'' markings removed from the wooden crates shipped to Afghanistan to conceal the origins of the weaponry, prosecutors said in court papers.

''In order to conceal the ammunition's true origin, the defendants repackaged the ammunition and falsely represented that it had been manufactured and originated in Albania,'' wrote Assistant U.S. Attorneys James Koukios and Eloisa Delgado Fernandez.

Ahh, the kids today (two pictured above) -- so precocious, so full of mischief!

Note -- eminent litigator and friend of the blog Scotty Dimond has absolutely nothing to do with this story.

Still, his photo right below Efraim's just seemed so....right somehow?

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