Blackwater denies involvement in illicit arms trade

WASHINGTON (CNN) — Allegations that Blackwater USA — whose operations were suspended after 20 Iraqi civilians were shot to death last weekend — was “in any way associated or complicit in unlawful arms activities are baseless,” the company asserted Saturday.

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Blackwater employees patrol Baghdad by air in a February 2005 photograph.

Federal prosecutors are investigating allegations that employees of Blackwater illegally purchased weapons and sold them in Iraq, according to U.S. government sources.

A U.S. government official has said the U.S. attorney’s office in Raleigh, North Carolina, is in the early stages of an investigation that focuses on individual company employees, and not the firm.

Blackwater, which is based in Moyock, North Carolina, is a security firm hired by the State Department to guard U.S. staff in Iraq.

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