MIAMI – In early March, the most pressing legal scrape for a youthful Miami Beach munitions merchant was a DUI arrest after a night of partying on South Beach.

But this week, Efraim Diveroli’s life got a lot more complicated.

The 22-year-old officially learned his Miami Beach company’s $300 million contract with the U.S. Army was suspended because he may have violated U.S. law by selling decades-old, Chinese-made ammunition to supply Afghan soldiers, federal authorities said.

Diveroli is also under criminal investigation by federal agencies in Washington, D.C., and Miami, according to law enforcement officials familiar with the case. And a congressional oversight committee will hold a hearing next month on federal contracts awarded to his company, AEY Inc.

He could not be reached for comment. His grandfather, Angelo Diveroli, 72, who lives in North Miami-Dade, defended him on Thursday, saying he’s being accused of selling older weapons by “jealous competitors.”

“This is a shame because my grandson is a genius,” the grandfather said. “He’s a genius about anything to do with weapons. Ever since he was a little boy, I would take him to gun shows and he could identify every model of guns. People would ask: How can he do that so young? He has a gift, I would tell them.”

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

“There’s nothing I’m prepared to say right now,” he said.

The improbable story of such a young man winning such a lucrative military contract was first published by The New York Times, which detailed Diveroli’s history as a munitions maverick who had allegedly misled the Army by saying most of his machine-gun cartridges were Hungarian.

According to the Times, much of the ammunition came from aging stockpiles of old Communist bloc countries – but also from China.

Both the Department of Defense’s inspector general and Immigration and Customs Enforcement are investigating Diveroli’s alleged network of weapons trafficking, the Times reported.

The suspension of Diveroli’s contract, which his company won through competitive bidding last year, is temporary – depending on the investigation’s outcome.

A copy of the suspension notice obtained from the Army said that on Nov. 25, 2007, Diveroli provided military officials with “false or misleading” information. He 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 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 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-Qaida and Taliban insurgents.

All that government contract work transformed Diveroli’s lifestyle.

“He’s overseas right now, trying to fill government orders for weapons,” said his grandfather, Angelo. “He is doing this work to help the American government. They are picking on him because he’s a young man, but he’s a hard worker. He works like a dog.”

While living on 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. Earlier this month, 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. He has an April 11 court date.

Diveroli might be the only U.S-approved munitions supplier with a Myspace account.

Diveroli kept his active until 2005. In his bio he describes himself as “a super nice guy.”

He adds: “I know what I want out of life but not exactly quite sure how to get it yet.”

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.”

He says he considers himself to be suffering from a case of “undiagnosed ADD.”

What kind of women would he like to meet? “A sweet, pretty girl with a good attitude and love for life,” according to his Web site posting. “A woman that will stand by her man because she knows he would do the same for her no matter the circumstance.”