James McCormick was sentenced in Britain weeks ago for selling the same fake bomb detectors in Iraq during the war.
The US military has raised its concerns with senior Iraqi officials about why US forces were not consulted on an operation to arrest 38 suspected members of the Islamic State of Iraq (ISI), an Al Qaeda affiliate.
Iraqi elections March 7 will be another major test of the country's democratic experiment.
Iraq has ordered more than 200 current and former employees of the private security company Blackwater, who still play a role in guarding US diplomats, to leave the country within the next four days.
By the end of July, they hope to finalize a deal that would map out the role and "time horizon" for US troops in the country.