Business

August 9, 2012

Company once known as Blackwater settles arms case

by Michael Biesecker
Associated Press

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 Aug. 7 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.”

Academi spokesman John Procter later clarified the company’s position.

“There is a distinction between an admission of events taking place and an admission of guilt,” he said.

A clause in Academi’s settlement with prosecutors bars the company from making any public statements “contradicting any aspect” of the agreement. Any such statement could allow the government to nullify the settlement, the agreement says.

Justice Department spokeswoman Robin G. Zier declined to comment Aug. 9 on whether Academi’s media release violated the terms of the settlement.

The first two criminal counts unsealed Aug. 7 allege Blackwater illegally exported encrypted satellite phones to Sudan in 2005. Counts three through six involve numerous arms exporting and trafficking violations, including providing a security services and a threat assessment to Sudan, providing military training to Canadian military and law enforcement personnel without a required U.S. license.

The company is also alleged to have provided technical and engineering data relating to the construction of armored personnel carriers to Sweden and Denmark from 2006 to 2008 without required State Department authorization. In 2004 and 2006, the company exported ammunition and body armor to Iraq and Afghanistan without first obtaining a U.S. government license, according to the documents.

Counts seven through 12 allege violations of various federal firearms laws as the result of the company’s possession of unregistered automatic weapons at its rural North Carolina training facility. Counts 13 through 17 allege involve a Bushmaster M4 carbine, three Glock handguns and a Remington shotgun given as a gift to Jordan’s King Abdullah II and his traveling entourage during a 2005 visit to Moyock.

“For an extended period of time, Academi/Blackwater operated in a manner which demonstrated systemic disregard for U.S. Government laws and regulations,” said Chris Briese, Special Agent in Charge of the Charlotte Division of the FBI. “Today’s announcement should serve as a warning to others that allegations of wrongdoing will be aggressively investigated.”

 




All of this week's top headlines to your email every Friday.


 
 

 

Boeing announces SF Airlines order for Boeing converted freighters

Boeing announced Oct. 23 that SF Airlines has placed an order for an undisclosed number of 767-300ER passenger-to-freighter conversions (Boeing Converted Freighters). SF Airlines, a subsidiary of Shenzhen, China-based delivery services company SF Express, will accept its first redelivered 767 in the second half of 2015. “SF Express aims to become China’s most respected and...
 
 
LM-C130

Another Super Herc Little Rock Rollin’

  Lockheed Martin delivered another C-130J Super Hercules to the 61st Airlift Squadron at Little Rock Air Force Base, Ark., Oct. 23. Little Rock AFB’s new C-130J was ferried from the Lockheed Martin Aeronautics facility ...
 
 

United Technologies beats third quarter profit expectations

United Technologies Corp. Oct. 23 reported third-quarter profit of $1.85 billion as sales increased across all its businesses and the aerospace giant reported favorable tax settlements. The Hartford, Conn.,-based company said it had profit of $2.04 per share and earnings, adjusted for non-recurring gains, came to $1.82 per share. The results topped Wall Street expectations,...
 

 

Raytheon SM-6s intercept targets in ‘engage on remote’ tests

During the U.S. Navy’s Combat Ship System Qualification Trials, the USS Chancellorsville (CG 62) tested two Raytheon Standard Missile-6 interceptors against anti-ship and cruise missile targets. As part of ‘engage on remote’ scenarios, the ship launched the SM-6 interceptors prior to its own radars ‘seeing’ the incoming threats, using targeting information from ano...
 
 

General Dynamics receives $19 million contract for submarine planning services

The U.S. Navy has awarded General Dynamics Electric Boat an $18.9 million contract modification to perform reactor-plant planning yard services for nuclear submarines and support-yard services for moored training ships. Electric Boat is a wholly owned subsidiary of General Dynamics. Initially awarded in November 2011, the contract has a potential value of $121.2 million through...
 
 

Passenger jets push Boeing’s profit up 18 percent

Robust demand for commercial jets and an increased pace of production helped Boeing earn $1.36 billion in the third quarter, up 18 percent from the same period last year. On a per-share basis, the Chicago-based company said it had a profit of $1.86. Adjusted for non-operating costs, earnings came to $2.14 per share, better than...
 




0 Comments


Be the first to comment!


Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>