Some 300 police officers searched the headquarters of Heckler & Koch Thursday amid allegations the German arms maker bribed Mexican officials to boost its sales, prosecutors said.
The firm is under investigation on suspicion that it "bribed officials in Mexico using cash payments for several years" in connection with arms deliveries between 2005 and 2010, Stuttgart prosecution spokeswoman Claudia Krauth said.
A spokeswoman for Heckler & Koch GmbH confirmed the raid but declined to elaborate.
Prosecutors, who also ordered several apartments to be searched, are investigating whether German officials were also bribed.
The company is already under investigation for allegedly providing its G36 assault rifle to Mexican police in the states of Chiapas, Chihuahua, Guerrero and Jalisco, where Germany prohibits such exports over alleged human rights violations.
The company, whose headquarters in Oberndorf near Stuttgart was already searched by prosecutors in connection with that investigation in December, denies any wrongdoing.
It maintains it did not deliver weapons to those four states, but only to the country's Mexico City-based central weapons purchasing authority, which is overseen by the Defense Ministry.
Rights groups such as Amnesty International have accused Mexican government troops and police of abuses in the ongoing fight against drug traffickers. Germany's tight weapons export regulations allow arms deliveries to Mexico, but only outside of the four states where the human rights situation is in question.
Heckler & Koch is also under investigation following the discovery of its assault rifles in Libya.
The company has said in that case it is fully cooperating with prosecutors and hopes that "light will be shed" on how the now defunct Libyan regime obtained those weapons. They were part of a 2003 government approved arms shipment bound for Egypt, it said.
Heckler & Koch also said it can neither deny nor confirm German media reports alleging that a son of the former Libyan leader Muammar Gadhafi visited the company's headquarters in 2003.