Thread: Company previously known as Blackwater agrees to $7.5 million fine in arms smuggling

Company previously known as Blackwater agrees to $7.5 million fine in arms smuggling case

By Associated Press, Published: August 7AP

RALEIGH, N.C. — The international security contractor formerly known as Blackwater has agreed to pay a $7.5 million fine to settle federal criminal charges related to arms smuggling and other crimes.
Documents unsealed Tuesday in a U.S. District Court in North Carolina said the company, now called Academi LLC, agreed to pay the fine as part of a deferred prosecution agreement to settle 17 violations.

The list of violations includes possessing automatic weapons in the United States without registration, lying to federal firearms regulators about weapons provided to the king of Jordan, passing secret plans for armored personnel carriers to Sweden and Denmark without U.S. government approval and illegally shipping body armor overseas.

Federal prosecutors and law enforcement agents said the company, which has held billions in U.S. security contracts in Iraq and Afghanistan, repeatedly flouted U.S. laws.

“Compliance with these laws is critical to the proper conduct of our defense efforts and to international diplomatic relations,” said Thomas G. Walker, the U.S. Attorney for the Eastern District of North Carolina. “This prosecution is an important step to ensuring that our corporate citizens comply with these rules in every circumstance.”

Blackwater was founded in 1997 in Moyock, N.C., by former Navy SEAL Erik Prince, but the company rose to national attention after winning massive no-bid security contracts from U.S. government at the beginning of the Iraq War.

In 2004, Iraqi insurgents in Fallujah ambushed two SUVs, killing the four armed Blackwater contractors and hanging their bodies from a bridge. In 2007, Blackwater contractors guarding a U.S. State Department convoy in Baghdad opened fire on civilian vehicles in an intersection, mistakenly thinking they were under attack. Seventeen Iraqis died.

In 2010, the company reached a $42 million settlement with the Department of State as part of a settlement of violations of the Arms Export Control Act and the International Trafficking in Arms Regulations.

The company changed its name to Xe before being sold in 2011, becoming Academi.

Documents unsealed in federal court Thursday say prosecutors brought 17 criminal charges against Academi following a 5-year investigation.

Under the terms of the deferred prosecution agreement, the company acknowledged “responsibility for the conduct” in the 17 alleged violations and settles all charges with the government in exchange for payment of the $7.5 million fine and assurances the company will reform its conduct. The agreement also requires future monitoring and audits for full compliance with federal firearms laws.

In a statement issued immediately after the settlement was made public, however, Academi officials denied they admitted any guilt for what was termed a “legacy matter.”

“The agreement, which does not involve any guilty plea or admit to any violations, reflects the significant and tangible efforts that Academi’s new ownership and leadership team have made,” the statement said. “The company is fully committed to this agreement and looks forward to successfully fulfilling its obligations on this legacy matter as we continue to lead by example in our regulatory and compliance efforts.”

Company previously known as Blackwater agrees to $7.5 million fine in arms smuggling case - The Washington Post

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