( BBC ) - Federal prosecutors are investigating whether staff from US security company Blackwater smuggled weapons to Iraq, according to reports.
Some employees are alleged to have sent over unlicensed weapons and equipment, that could have been used by a group labelled as terrorist by the US.
Reports said two ex-Blackwater staff had admitted weapons charges and were co-operating with federal officials.
Blackwater was blamed for a Baghdad gunfight in which 11 civilians died.
The North Carolina-based firm had its licence to operate in Iraq withdrawn by the Iraqi authorities following last Sunday's shootout. It resumed limited operations on Friday.
The News and Observer in North Carolina quoted two sources as saying officials were investigating whether any Blackwater staff shipped weapons, night-vision scopes, armour, gun kits and other equipment to Iraq without the required permits
The newspaper said that, in January, two former members of staff with the firm had pleaded guilty in Greenville, North Carolina, to weapons charges.
The allegations of weapons smuggling by a US contractor in Iraq came to light earlier this week in a written statement from the state department's inspector general, Howard Krongard.
He confirmed that officials in North Carolina were investigating alleged weapons smuggling to Iraq by a US contractor.
In July, Turkey complained to the US that they had seized American weapons from the outlawed Kurdistan Workers Party (PKK), designated by Washington as a terrorist organisation.
Investigators are reportedly attempting to determine if any Blackwater weapons could have been sold on the black market and ended up in the hands of the PKK.
Meanwhile, the Washington Post reported in Saturday's edition that the Iraqi government was also investigating if Blackwater had been involved in six other violent incidents in Iraq that left at least 10 people dead.
The firm has resumed limited operations in Baghdad providing security to all US state department employees in Iraq, following US consultation with the Iraqi government.
An Iraqi interior ministry investigation found Blackwater to be "100% guilty" of last weekend's incident in which 11 Iraqi civilians were killed.
Blackwater insists its guards acted in self-defence.
The company could not be reached for comment on Saturday.