ACADEMI / BLACKWATER CHARGED AND ENTERS DEFERRED PROSECUTION AGREEMENT

TUESDAY, AUGUST 7, 2012  FBI Version

_WWW.JUSTICE.GOV/USAO/NCE/ <http://WWW.JUSTICE.GOV/USAO/NCE/>_

*_ACADEMI / BLACKWATER CHARGED AND ENTERS_*

*_DEFERRED PROSECUTION AGREEMENT_*__

RALEIGH, N.C. — U.S. Attorney Thomas G. Walker announced the unsealingof a bill of information and deferred prosecution agreement (DPA) involving Academi LLC, formerly known as Blackwater Worldwide and Xe Services, LLC (Academi / Blackwater). The bill of information and DPA were unsealed today in U.S. District Court in New Bern, N.C., during proceedings before the Honorable Louise W. Flanagan, U.S. District Judge. In the agreement, the company admits certain facts set forth in a bill of information and agrees to a $7.5 million fine. The agreement also acknowledges and references a $42 million settlement between the company and the Department of State as part of a settlement of
violations of the Arms Export Control Act and the International Trafficking in Arms Regulations.

“Today’s proceedings conclude a lengthy and complex investigation into a company which has provided valuable services to the United States Government, but which, at times, and in many ways, failed to comply with important laws and regulations concerning how we as a country interact with our international allies and adversaries,” said U.S. Attorney Walker. “Compliance with these laws is critical to the proper conduct of our defense efforts and to international diplomatic relations. This prosecution is an important step to ensuring that our corporate citizens comply with these rules in every circumstance.”

IRS-Criminal Investigation Special Agent in Charge Jeannine A. Hammett stated, “High-ranking corporate officials hold positions of trust not only in their companies but also in the eyes of the public. That trust is broken when such officials abuse their power and commit crimes to line their own pockets. An international fraud of this magnitude requires a coordinated effort among law enforcement agencies to stop those involved from profiting from their wrongdoing.”

“Compliance with the firearms laws of the United States in both domestic and international commerce is essential to maintaining order and accountability,” stated ATF Special Agent in Charge Wayne L. Dixie. “Whether it is an individual or a corporation, we will enforce the provisions of the federal gun laws equally. If violations are discovered, we will move to hold those responsible for the violations accountable for their actions.”

“Blackwater profited substantially from Department of Defense (DoD) contracts in support of overseas contingency operations over the past decade,” commented Special Agent in Charge John F. Khin, Southeast Field Office, Defense Criminal Investigative Service (DCIS). “This investigation showed that no contractor is above the law, and that all who do business with the DoD will be held accountable. With this agreement, Blackwater acknowledged their wrongdoing, and took steps to remedy and mitigate the damage they caused to the United States and the public trust.”

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

“This company clearly violated U.S. laws by exporting sensitive technical data and unauthorized defense services to a host of countries around the world,” said Brock D. Nicholson, Special Agent in Charge of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) Atlanta. “In doing so, company employees were frequently in possession of illegal firearms and aided other foreign nationals in the acquisition of illegal firearms. HSI is proud to have played a role in assisting the investigation to call this company to account for its actions.” Nicholson oversees HSI activities in Georgia and the Carolinas.

See BILL OF INFORMATION

Homs, Syria: Assad Allies Charge Mossad, CIA, Blackwater Link

International Business Times  March 8, 2012

The press agency of Lebanon’s Hezbollah movement charged Wednesday that the CIA, Israel’s Mossad and private security firms have been exposed supporting Syrian rebels in Homs.

Al-Manar, a channel linked to the Shi’ite militia Hezbollah — a close ally of the Assad regime in Syria — asserted that 700 Arab and Western gunmen along with Israeli, American and European-made weapons were seized in the rebellious Homs neighborhood of Baba Amro when government forces overwhelmed and routed the rebel Free Syrian Army last weekend. It said mercenaries of Xe Services LL, formerly known as Blackwater, and Academi were also apprehended

The site quoted one predicting: “Huge and critical surprises will be uncovered in the coming few days, such as the kinds of arms seized, as well as the military tactics the armed groups follows, and the sides that supervised the operations.”

Salim Harba, a Syrian security expert, told Al-Manar that “a coordination office was established in Qatar under American-Gulf sponsorship. The office includes American, French, and Gulf — specifically from Qatar and Saudi Arabia — intelligence agents, as well as CIA, Mossad, and Blackwater agents and members of the Syrian Transitional Council.”

He added, “Qatar had also made deals with Israeli and American companies to arm the armed groups, and Gulf countries have been financing the agreements.”

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Rep. Schakowsky: Erik Prince Of Blackwater Tried To Intimidate Me

TPM Muckraker  November 30, 2011

Jan Schakowsky says that former Blackwater CEO Erik Prince has “attempted intimidation” of her in response to Schakowsky’s campaign to reduce U.S. reliance on private military contractors in Iraq and Afghanistan.

Schakowsky spoke on the House floor Wednesday about a letter from Prince’s attorneys, dated October 7, 2011, that was delivered by hand to Schakowsky’s office. The letter accuses Schakowsky of making “false and defamatory” statements against Prince.

The letter cites a September 8 article published by the Independent in London about Prince’s Blackwater video game. The article quotes Schakowsky as saying: “If Mr. Prince had not emigrated to the United Arab Emirates, which does not have an extradition agreement with the US, he too would now be facing prosecution.”

“Your statement to [the Independent], which imputes commission of a crime, is per se libelous,” the letter from Prince says, adding: “Your malice cannot be questioned. You have a multi-year history of making derogatory comments about Mr. Prince and his former company, Blackwater. You have abused your Congressional power to request that Mr. Prince be investigated.”

Blackwater has received more than $1 billion in federal contracts in places like Iraq and Afghanistan, and became infamous after four employees were charged with the deaths of 17 Iraqi civilians after allegedly opening fire in Nisour Square in Baghdad in 2007. In December 2009, a judge dismissed the charges citing missteps by the Department of Justice, but earlier this year an appeals court panel ordered the judge to reconsider the case.

Prince resigned in 2009, and the company was rechristened “Xe Services” when it was sold last year.

Schakowsky has introduced the Stop Outsourcing Security Act since 2007, as a way to phase out private contractors like Blackwater. “While the problem applies to other private contractors,” she said Wednesday, “there is one company that has become synonymous with misconduct: Blackwater.”

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FORMER TOP CLINTON OFFICIAL NOW DIRECTOR XE SERVICES:

Gov in the lab  July 7, 2011

USTC Holdings, the parent company of Xe Services (formerly Blackwater Worldwide, the private security contractor at the center for several controversies in Iraq), announced Tuesday that Jack Quinn will serve as an “independent director” of the company.

Quinn was the former White House counsel to President Bill Clinton and former
chief of staff to Vice President Al Gore. Currently, he serves as the chairman of the lobbying firm Quinn Gillespie and Associates, which he founded with Republican strategist Ed Gillespie in 2000.

UTSC is a leading provider of private security services focused on operations in support of the United States government.

“I am proud to join and help lead Xe at a time when the valuable servicesit provides are most needed by our country,” said Quinn, in a statement. “The men and women of the Company demonstrate their dedication, professionalism and best-in-class service each and every day, and I am honored to support the critical mission they serve.”

Click here to see the profile of Quinn in OpenSecrets.org’s Revolving Door database

Please see the original at Gov in the lab

Blackwater Founder in Deal to Sell Company

By Andrew Ross Sorkin and Ben Protess at The New York Times Dealbook

Erik D. Prince, the founder of the private security firm formerly known as Blackwater Worldwide, has reached a deal to sell his embattled firm to a small group of investors based in Los Angeles who have close ties to Mr. Prince, according to people briefed on the deal.

Blackwater, now called Xe Services, was once the United States’ go-to contractor in Iraq and Afghanistan. It has been under intense pressure since 2007, when Blackwater guards were accused of killing 17 civilians in Nisour Square in Baghdad. The company, its executives and personnel have faced civil lawsuits, criminal charges and Congressional investigations surrounding accusations of murder and bribery. In April, federal prosecutors announced weapons charges against five former senior Blackwater executives, including its former president.

The sale, which is expected to be announced on Friday, came after the State Department threatened to stop awarding contracts to the company as long as Mr. Prince owned the firm, people involved in the discussions said. These people requested anonymity because they were not authorized to speak about the confidential talks. The sale is intended to help shake the stigma associated with its ownership under Mr. Prince.

Yet questions remain about Mr. Prince’s continuing relationship with the company. While he is expected to step down from any management or operational role, he will have a financial interest in the company’s future, according to people briefed on the negotiations. As part of the deal, he will be paid an “earn out,” or a payment that depends on the company’s financial performance over the next several years, these people said.

One of the lead investors in the deal is Jason DeYonker of Forté Capital Advisors, who has a long relationship with Mr. Prince and Blackwater. He helped advise Mr. Prince in his development of Blackwater’s business plan when the company was founded and helped negotiate the company’s first training contracts with United States government agencies and the company’s expansion of its training center in Moyock, N.C. In addition, he managed the Prince family’s money from 1998 to 2002. The other lead investor is Manhattan Growth Partners, a private equity firm in New York.

Exact terms of the deal could not be learned, but people involved in the talks said the transaction was worth about $200 million. Bank of America led the financing of the transaction, these people said.

Mr. Prince, a former Navy Seal who created Blackwater in 1997, put his company up for sale in June and moved his family to Abu Dhabi, court records show. Mr. Prince, who built Blackwater using an inheritance from his family’s Michigan auto parts fortune, stepped aside as Xe’s chief executive in 2009 but has remained chairman until now. Mr. Prince sold the company’s aviation division, Presidential Airways, to the AAR Corporation in March.

The auction for Xe Services has dragged on for months as speculation has swirled about the company’s future and the auction process. Some bidders speculated that Mr. Prince had always favored selling the company to the investor group led by Mr. DeYonker.

The new buyers are hoping to recast the company as a military training organization instead of a private security service. The company’s training center in Moyock has trained more than 50,000 United States government personnel and allied forces. The buyers hope to receive new contracts to train forces in Iraq, Afghanistan and Yemen, among other locations, especially as the United States withdraws troops and needs to train local forces.

After the sale, the company will continue to be subject to an agreement it reached with the State Department in August. Under the settlement, the company paid $42 million in fines over hundreds of violations of United States export control regulations, permitting it to continue to compete for government contracts.

Wendy Wysong, a partner at the law firm Clifford Chance, was appointed as a special compliance officer for Xe Services as a result of the settlement.

James Risen contributed reporting.  Please see the original here