Ex-Blackwater firm pays£4.8m fine

The international security contractor formerly known as Blackwater has agreed to pay a 7.5 million US dollar (£4.8 million) fine to settle federal criminal charges related to arms smuggling and other crimes.

Documents unsealed in a US district court in North Carolina said the company, now called Academi, 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 armoured personnel carriers to Sweden and Denmark without US government approval and illegally shipping body armour overseas.

Federal prosecutors and law enforcement agents said the agreement settles a long and complex case against the company, which has held billions in US security contracts in Iraq and Afghanistan.

Chris Briese, special agent in charge of the Charlotte Division of the FBI, said: "For an extended period of time, Academi/Blackwater operated in a manner which demonstrated systemic disregard for US government laws and regulations. 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. The company rose to prominence after winning massive no-bid security contracts from the US government at the beginning of the Iraq War.

In 2004, Iraqi insurgents in Fallujah ambushed two pick-up trucks, killing four armed Blackwater contractors and hanging their bodies from a bridge. In 2007, Blackwater contractors guarding a US 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 dollar (£26 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 last year, becoming Academi. In a statement, Academi officials said they were pleased to settle the case with federal prosecutors on what they 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."