Now U.S. officials fear they are either in the hands of an Iraqi militia group, or a criminal gang that may trade them to the so-called Islamic State, U.S. officials said.

The three missing Americans were providing maintenance for the U.S. training program for Iraqi Special Operations forces, the contractor said, speaking anonymously because he was not authorized to describe the incident publicly. One of the men is an engineer from Kansas, and another is a Miami-based maintenance specialist of Egyptian heritage. He and his brother take turns working translation shifts for the contractor in Baghdad, said the American who knew the men.

“We aware of reports that American citizens are missing in Iraq,” U.S. Embassy spokesman Scott Bolz said by phone from Baghdad on Monday. “The safety and security of Americans overseas is our highest priority. We are working with the full cooperation of the Iraqi authorities to locate and recover the individuals.” He declined to share more details, citing the U.S. privacy act.

A State Department spokesman in Washington requested that The Daily Beast withhold the contractor names, citing the ongoing FBI investigation into their disappearance. The FBI had not yet responded to requests for comment, nor has the main contractor or subcontractor company that employs them.

The families have been notified and the FBI and investigators from the Office of Security Cooperation Iraq are questioning company officials and working to find the missing men, the contractor said. A U.S. official in Baghdad confirmed the families had been notified, speaking anonymously because he was not authorized to discuss the matter publicly.

The men had left their base traveling in a small pickup truck to meet a former interpreter from their team at his home in the southern Baghdad neighborhood of Dura. It’s not clear where along the route they may have disappeared, though the former interpreter who went by the nickname “Riley” is also missing.

The Iraqi forces and the U.S. company the men work for were first tipped off to their absence when the Iraqi general who runs the military base where the Americans worked got a phone call from a caller claiming to be on guard at an Iraqi military. The caller asked the general if the three Americans worked for him. He said yes, thinking the gate guards would then let the men enter the base. But the men never showed up.

“The call seemed suspicious and further trying to contact or track the number proved fruitless,” the contractor said.

The men are thought to have been carrying their contractor identification badges, and their Iraqi weapons licenses, which usually indicate their nationality.

The contractor’s account, that the men were taken when they were on the way to meet a former interpreter who lived in Dora, matches one told to the Associated Press by an unnamed Iraqi intelligence official. Dora was once a stronghold for Sunni insurgents, and a battleground between Sunni militants and Shiite militias in 2006-2007.

The Washington Post reported Monday that the men were abducted from a brothel. Restaurants that serve alcohol and establishments that provide such services are often targeted by Shiite militia groups cracking down on what they see as illicit behavior.

U.S. contractors working in Iraq have been on alert for the risk of kidnapping for some time, said Michael Bouchard, chief security officer for Lenoir City, Tennessee-based Sterling Global Operations, a security and risk management company that conducts business in Iraq.

“Once or twice a month, we tell people ‘Don’t get complacent,’ ” Bourchard said Monday. “Lately ISIS is striking targets they haven’t been striking before, aiming at civilians in Paris and Indonesia, so they might look at western targets inside Iraq too.”

Iraq also used to have a cottage industry of kidnapping rings that would ransom the captives back to their foreign companies or sell them to militant groups like al Qaeda in Iraq, the precursor to the so-called Islamic State. Kidnappings of Westerners had become rare to nonexistent as most “rarely leave the compound,” according to two Americans living in Baghdad, speaking anonymously because of the sensitivity surrounding security in a semi-war zone.

Kimberly Dozier — THE DAILY BEAST

It came as the company hired to provide security began a new contract at a substantially lower rate than it had previously received for the same task. Unity Resources Group will be paid $51 million to provide protection for the embassy for the next five years after picking up $101 million for the work for the four previous years.

A Herald source familiar with private military contracting work in Iraq said URG staff in Afghanistan had their pay cut a few months ago from US$600 a day to US$340 a day ($876 to $496) and the same was believed to be happening in Iraq.

"If the New Zealand Government is using the Australian embassy they will be paying a portion of security staff," he said. He said companies involved in the provision of private security staff had recently faced tough questions about how much the Western client countries were being charged. Someone paid US$600-a-day could expect to be charged back to the client at US$1600-a-day.

The loss of the experienced staff had raised concerns over the quality of those being brought in as replacements, he said.

The Weekend Australian reported two senior URG staff had told Australia's ambassador Charles Langman the company wasn't meeting the terms of the new contract.

The URG staff warned the company was unable to meet the requirement of filling three teams of 10 security specialists. A Weekend Australian source said the teams were at half strength.