Former Blackwater settles arms case

RALEIGH, N.C. (AP) - 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 agreement settles a long and complex case against the company, which has held billions in U.S. security contracts in Iraq and Afghanistan.

"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."

Blackwater was founded in 1997 in North Carolina 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.

In a statement, Academi officials said they are pleased to settle the case with federal prosecutors on what they termed as 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."