French cement firm Lafarge SA pleaded guilty Tuesday in a New York federal court to paying Islamic State and an al Qaeda affiliate to protect its Syrian cement plant, marking what the Justice Department said was the first time it has charged a company with supporting terrorist organizations.
Lafarge agreed to pay about $778 million in financial penalties and serve a term of three years probation. The company and its defunct subsidiary, Lafarge Cement Syria, pleaded guilty to conspiracy to provide material support to foreign terrorist organizations.
Lafarge admitted that from August 2013 through October 2014 it made payments to terrorist organizations that were intended to protect a cement facility in northern Syria that was completed in 2010 at a cost of $680 million. Lafarge was acquired by Swiss construction-material giant
Holcim Ltd.
in 2015.
“Today’s guilty pleas to terrorism charges by multinational construction conglomerate Lafarge SA and its Syrian subsidiary reflect corporate crime that reached a new low and a very dark place,” Deputy Attorney General
Lisa Monaco
said at a news conference.
Lafarge said that it worked with the Justice Department to resolve the matter.
“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,” the company said.
Lafarge’s Syrian cement plant in 2018.
Photo:
delil souleiman/Agence France-Presse/Getty Images
Holcim said that none of the conduct involved Holcim or any Lafarge operations in the U.S.
Lafarge made a total of nearly $6 million in payments through intermediaries to Islamic State and al Qaeda’s Syrian affiliate Nusra Front to preserve the operations of its cement factory, prosecutors said. With the protection of the terrorist groups, the companies made about $70 million in revenue, prosecutors said.
The Brooklyn U.S. attorney’s office had jurisdiction to bring the charges because some of the payments were wire transfers that passed through the district it covers.
As the scheme evolved, former Lafarge executives tried to negotiate a revenue-sharing agreement with Islamic State while insisting that the company’s name not appear on any contract with the terrorist group, prosecutors said. They also sought the terrorist group’s help in blocking competitors from importing cement from Turkey, the Justice Department said.
“Leveraging ISIS to harm competitors defies belief, but it really happened,” said Brooklyn U.S. Attorney
Breon Peace,
using an acronym for Islamic State.
Lafarge evacuated the cement plant in September 2014 as ISIS militants advanced on the site and after then-President
Barack Obama
outlined a plan to lead an international coalition to root out the terrorist group through military action.
Justice Department officials said they worked in concert with French authorities, who have previously charged some former Lafarge executives for roles in the alleged scheme. The cases in France are pending.
Write to James Fanelli at james.fanelli@wsj.com and Corinne Ramey at corinne.ramey@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
French cement firm Lafarge SA pleaded guilty Tuesday in a New York federal court to paying Islamic State and an al Qaeda affiliate to protect its Syrian cement plant, marking what the Justice Department said was the first time it has charged a company with supporting terrorist organizations.
Lafarge agreed to pay about $778 million in financial penalties and serve a term of three years probation. The company and its defunct subsidiary, Lafarge Cement Syria, pleaded guilty to conspiracy to provide material support to foreign terrorist organizations.
Lafarge admitted that from August 2013 through October 2014 it made payments to terrorist organizations that were intended to protect a cement facility in northern Syria that was completed in 2010 at a cost of $680 million. Lafarge was acquired by Swiss construction-material giant
Holcim Ltd.
in 2015.
“Today’s guilty pleas to terrorism charges by multinational construction conglomerate Lafarge SA and its Syrian subsidiary reflect corporate crime that reached a new low and a very dark place,” Deputy Attorney General
Lisa Monaco
said at a news conference.
Lafarge said that it worked with the Justice Department to resolve the matter.
“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,” the company said.
Lafarge’s Syrian cement plant in 2018.
Photo:
delil souleiman/Agence France-Presse/Getty Images
Holcim said that none of the conduct involved Holcim or any Lafarge operations in the U.S.
Lafarge made a total of nearly $6 million in payments through intermediaries to Islamic State and al Qaeda’s Syrian affiliate Nusra Front to preserve the operations of its cement factory, prosecutors said. With the protection of the terrorist groups, the companies made about $70 million in revenue, prosecutors said.
The Brooklyn U.S. attorney’s office had jurisdiction to bring the charges because some of the payments were wire transfers that passed through the district it covers.
As the scheme evolved, former Lafarge executives tried to negotiate a revenue-sharing agreement with Islamic State while insisting that the company’s name not appear on any contract with the terrorist group, prosecutors said. They also sought the terrorist group’s help in blocking competitors from importing cement from Turkey, the Justice Department said.
“Leveraging ISIS to harm competitors defies belief, but it really happened,” said Brooklyn U.S. Attorney
Breon Peace,
using an acronym for Islamic State.
Lafarge evacuated the cement plant in September 2014 as ISIS militants advanced on the site and after then-President
Barack Obama
outlined a plan to lead an international coalition to root out the terrorist group through military action.
Justice Department officials said they worked in concert with French authorities, who have previously charged some former Lafarge executives for roles in the alleged scheme. The cases in France are pending.
Write to James Fanelli at james.fanelli@wsj.com and Corinne Ramey at corinne.ramey@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8