There could be more trouble on the horizon for Blackwater. Federal prosecutors are considering indicting three former senior Blackwater executives--including the former president--for illegally obtaining automatic weapons.
Senior Justice Department officials are reviewing a draft indictment against former president Gary Jackson, former Blackwater lawyer Andrew Howell, and a third man who used to work at the firm's armory, people close to the case told the AP. A decision is not expected until at least next month.
[snip]
Multiple law enforcement officials familiar with the case said investigators are trying to determine if Blackwater obtained the official letterhead of a local sheriff to create a false justification for buying the guns. The officials spoke on condition of anonymity because they were not authorized to discuss the investigation.
Back in 2005, Blackwater financed the purchase of 34 automatic weapons for the Camden County, North Carolina sheriff's office. The sheriff was the official owner, but the weapons were stored at Blackwater's armory.
Beyond the obvious question of why a rural sheriff's department (Camden County only has 6,900 people) would need that many high-powered weapons, the sheriff says that none of his deputies were qualified to use them even though they had unlimited access. However, federal authorities apparently knew about the weapons for some time.
The timing couldn't possibly be worse for Blackwater. It's currently bidding for the right to train Afghan police. Even though these are former execs, a federal indictment could be the final nail in the coffin for that bid.
Update: Theatre Goon points out in the comments that "straw purchases" like this one are highly illegal. Moreover, according to Wikipedia, the sheriff could be racked up on felony charges as well.