Federal prosecutors in Miami have stepped up their case against AEY Inc. and the 22-year-old arms dealer accused of selling shoddy and illegal ammo to the U.S. government to supply the Afghan Army.

Prosecutors have filed a superseding indictment, adding a stack of wire fraud charges to the initial case that led to the arrest of Efraim Diveroli and three other business associates on June 19 for violations of the Arms Control Export Act.

There's no new allegations from the previous indictment, but the U.S. attorney in Miami decided to hang wire fraud charges on each of the money transfers the firm received from the U.S. Army.

Diveroli now faces 13 counts of wire fraud, which under federal law carry a possible sentence of up to 20 years in prison.

This all makes getting arrested for drunk driving and accused of domestic violence seem like no big deal.

Federal prosecutors in Miami took the unusual step of summoning the U.S. Ambassador to Albania to testify before a grand jury in the ongoing probe of arms dealer AEY Inc. and its 22-year-old president.

The Los Angeles Times landed an extensive interview with Ambassador John Withers II and wrote up a interesting story this morning, giving Withers an opportunity to deny allegations of any State Department cover-up in the case of Efraim Diveroli.

The story doesn't make clear what the grand jury in Miami is hearing testimony about, since Diveroli and three others were already indicted on June 20.

And while Withers tells the Times how cooperative he's been with the investigation, a source on Capitol Hill tells TPMmuckraker that State has not yet delivered documents that the oversight committee requested by June 30 or made officials available for interviews by the committee's July 11 deadline.

It's been a few weeks since Rep. Henry Waxman (D-CA) and the oversight committee unveiled a stack of documents suggesting that Withers and others of knew about and helped cover up concerns that AEY's shipment of Chinese ammo may have violated U.S. law.

The Times story boils down to the ambassador's aggressive defense against the extraordinary allegations.

Important questions about Waxman's allegations emerged last week as Withers spoke out for the first time in interviews with The Times, denying any embassy involvement in a cover-up and insisting officials there worked closely with investigators to secure evidence for the prosecution.

Withers' version has been supported by at least four other U.S. officials. In addition, a criminal investigator working on the case credited embassy staff with providing "outstanding support" to the criminal inquiry, according to a Nov. 28, 2007, Defense Department e-mail that was reviewed by The Times.

"Far from covering this up, we were helpful to this investigation, and proud of it," said Withers, a 24-year Foreign Service veteran. Withers has been given permission by State Department officials to speak publicly providing he does so as an individual and not as a representative of the U.S. government or the State Department.

It's not clear what "investigation" Withers was referring to cooperating with. U.S. Immigration and Customs and Enforcement officials have said they began an investigation into AEY Inc. in 2005, but other law enforcement and military officials have also conducted investigations.

The State Department's inspector general launched an investigation into the matter after Waxman publicized the allegations of a cover up.

According to Withers' account to the Times, the ambassador agreed to a late-night meeting with the Albanian defense minister in November because he feared the minister may have had information related to terrorism.

When the minister, Fatmir Mediu, arrived, he started talking about how a reporter from the New York Times was asking questions about Chinese-made ammunition and corruption in the Albanian Ministry of Defense.

Mediu begged Withers to help prevent a potentially damaging story. Withers said that Mediu, in an emotional state, had "outlandish" suggestions such as blocking the reporter's access and repackaging the munitions to hide their Chinese origin.

Withers said that he and the other U.S. officials present gave no sign that they approved of his ideas, suggesting only that Mediu prepare a rebuttal to the article once it appeared.

A U.S. Army major working at the embassy in Tirana gave a conflicting account of that meeting to Waxman's committee and his own military bosses.

Today's story also throws out an oddly sourced suggestion that Army Major Larry Harrision may have recanted his allegations.

Withers and other U.S. officials said Harrison had since denied in private conversations that he intended to accuse Withers of wrongdoing, and had claimed that his words were taken out of context by the committee.

Private conversations? That seems like something the State Department would want to document, doesn't it?

From the Miami Herald:

A 22-year-old Miami Beach entrepreneur is scheduled to enter a plea to charges of defrauding the U.S. government by allegedly falsifying the origins and age of ammunition intended for Afghanistan.

Efraim Diveroli's company had a contract to supply the U.S. military with ammunition for forces in Afghanistan. He has been charged along with three others with providing prohibited Chinese-made ammunition and saying it came from Albania.

He is scheduled to be in court Monday.

Diveroli's company, AEY Inc., was paid more than $10 million for 35 shipments of ammunition that prosecutors say was manufactured in China. Prosecutors contend his company removed markings from containers to hide the fact they were manufactured in China.

Late Update: Efraim Diveroli's attorney, Howard Srebnick, said in an email this morning that Diveroli will plead not guilty to the charges, and the court appearance is scheduled for Wednesday, not today.