22-year-old arms dealer pleads not guilty on fraud charges
A 22-year-old Miami Beach arms dealer says he is not guilty of defrauding the Pentagon under a nearly $300 million contract he had to supply ammunition to forces in Afghanistan.
Efraim Diveroli entered the plea Monday in Miami federal court. Diveroli remains free on bail.
Federal prosecutors say Diveroli's company, AEY Inc., provided prohibited Chinese-made ammunition to forces in Afghanistan and claimed it came from Albania.
The House Oversight Committee, chaired by Rep. Henry Waxman, has been investigating Diveroli and AEY, whose vice president is a 25-year-old masseuse, since their shady conduct first came to light in March.
Waxman has suggested the US Embassy in Albania helped AEY cover up the Chinese origins of the ammo it was selling.
At an Oversight Committee hearing last month, Army officials acknowledged ignoring past performance problems with AEY before handing the company another lucrative contract.
AEY was paid more than $10 million for 35 shipments of ammunition. Prosecutors contend Diveroli's company removed markings from containers to hide the fact they were manufactured in China.
No trial date has been set. Diveroli potentially faces decades in prison if convicted of all 71 counts.
With wire reports
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