SAN DIEGO -- Federal agents searched the Rancho Santa Fe-area home of Rep. Randy "Duke" Cunningham on Friday along with a yacht he has lived on in Washington, D.C., the FBI said.

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Agents also searched the Washington offices of a defense firm whose founder has close ties to the congressman.

Federal prosecutors have been investigating the sale of Cunningham's former home to the founder of the defense contracting firm, MZM Inc., at what may have an inflated price.

Cunningham's current home in the San Diego suburb of Rancho Santa Fe was searched, said Jan Caldwell, an FBI spokeswoman in San Diego.

Agents from the FBI, Internal Revenue Service and the Defense Department's criminal investigative service searched the boat where Cunningham has been living on the Potomac and the Washington offices of MZM Inc., said Debra Weierman, a Washington FBI spokeswoman.

In Rancho Santa Fe, about 20 agents searched the home for six hours, a Justice Department source said on condition of anonymity. The search warrant remained sealed.

Cunningham has said he showed "poor judgment" in selling his Del Mar home to Mitchell Wade, the founder of MZM and a close friend of Cunningham, a member of the House Appropriations Defense Subcommittee and the Permanent Select Committee on Intelligence. Both committees oversee the kind of classified intelligence work MZM does for the military.

On Friday, Cunningham spokesman said he did not know anything about the raids other than press reports and referred all inquiries to the congressman's attorney, K. Lee Blalack, who did not immediately return a call for comment. MZM offices were closed.

Robert McKeon, commodore of the Capital Yacht Club, declined comment on activities at the facility on the Potomac River. Several club members pointed out the yacht Duke-Stir tied up at the end of a dock.

Cunningham sold his Del Mar home in November 2003 for $1.675 million to Wade, then used the proceeds to buy a home in Rancho Santa Fe for about $2.5 million. Nearly nine months later, Wade sold the home for $975,000 -- a $700,000 loss.

Additionally, Cunningham has been living aboard Wade's yacht, the Duke-Stir, for more than a year. MZM has been a major contributor to Cunningham's campaigns.

The Defense Department halted orders this month on a five-year contract that provided MZM with $163 million of revenue over its first three years after the department's inspector general found that it did not satisfy rules on competitiveness.

This week, MZM announced that James C. King, a retired three-star Army general, was taking over as president and chief executive -- a role held for years by Wade, who founded the company in 1993.