Updated October 18, 2022 at 3:13 PM ET
The French cement company Lafarge SA has pleaded guilty in federal court in New York to paying millions of dollars to the Islamic State and the Nusra Front to allow the company's business operations in northern Syria to continue amid the country's devastating civil war.
As part of its plea agreement struck with the Justice Department, Lafarge will pay $778 million in financial penalties.
"In its pursuit of profits, Lafarge and its top executives not only broke the law — they helped finance a violent reign of terror that ISIS and al-Nusrah imposed on the people of Syria," Deputy Attorney General Lisa Monaco said at a news conference in New York. "The defendants partnered with ISIS, one of the most brutal terrorist organizations the world has ever known, to enhance profits and increase market share — all while ISIS engaged in a notorious campaign of violence during the Syrian civil war."
Officials say that from approximately May 2010 to September 2014, Lafarge, through its now-defunct subsidiary Lafarge Cement Syria, operated a cement plant in the Jalabiyeh region of northern Syria that was built at a cost of approximately $680 million.
After the Syrian civil war began in 2011, fighting erupted across the country between armed rebel groups and the Syrian government. Eventually, the Islamic State, or ISIS, and the Nusrah Front took control of much of northern Syrian.
"Many companies made the right choice — the only lawful choice: to leave the region rather than join hands with the terrorists," Monaco said. "Lafarge made a different decision: to go into business with ISIS and al-Nusra — two of the world's most notorious and brutal terrorist organizations."
According to court papers, Lafarge made $6 million in payments to the Islamic State and the Nusra Front as the two groups waged a campaign of violence and terror against the Syrian population, aid workers, journalists and others.
The payments allowed LCS to obtain approximately $70.30 million in revenue.
According to court papers, Lafarge and LCS paid the terrorist groups in order to protect their employees, to ensure continued operation of the Jalabiyeh Cement Plant, and to obtain economic advantage over their competitors in the Syrian cement market.
Lafarge and LCS executives actively tried to hide their conduct from others inside and outside the companies, court papers says. Those efforts includes using third-party intermediaries to negotiate agreements with ISIS, and by trying to get ISIS not to use the name Lafarge on papers documenting their agreements.
Under the terms of the plea agreement with the Justice Department, Paris-based Lafarge pleaded guilty to one count of conspiring to provide material support to designated foreign terrorist organizations between August 2013 and October 2014.
The case marks the first time, officials say, that a company has pleaded guilty to conspiring to provide material support to terrorist organizations.
Monaco said the case is a "vivid reminder of how corporate crime can intersect with national security."
Lafarge was acquired by the Switzerland-based Holcim in 2015. Court papers says Lafarge executives concealed the Syria activities from Holcim as well as external auditors.
In a statement, Holcim said none of the conduct involved the parent company or any Lafarge operations or employees in the United States.
"Lafarge SA and LCS have accepted responsibility for the actions of the individual executives involved, whose behavior was in flagrant violation of Lafarge's Code of Conduct," Lafarge SA said in a statement. "We deeply regret that this conduct occurred and have worked with the U.S. Department of Justice to resolve this matter."
The settlement is the largest ever paid by a private company charged with providing material support to a terrorist group.
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