In the first case of its kind, a French industrial company and its Syrian subsidiary pleaded guilty on Tuesday to conspiring to provide material support to Islamic State and the al-Nusrah Front.
Lafarge S.A., a global building materials manufacturer based in Paris, and Lafarge Cement Syria, based in Damascus, allegedly paid the two U.S.-designated terrorist groups nearly $6 million in exchange for permission to operate a cement plant in Syria from 2013 to 2014, according to court documents.
The scheme enabled the Syrian company to bring in more than $70 million in revenue, prosecutors charge in court documents.
A federal judge in New York sentenced the defendants to probation. They were ordered to pay financial penalties totaling $777.78 million.
The Department of Justice described the case as its “first corporate material support for terrorism prosecution.”
“The terrorism crimes to which Lafarge and its subsidiary have pleaded guilty are a vivid reminder of how corporate crime can intersect with national security,” Deputy Attorney General Lisa Monaco said at a press conference in New York.
“This case sends the clear message to all companies, but especially those operating in high-risk environments, to invest in robust compliance programs, pay vigilant attention to national security compliance risks, and conduct careful due diligence in mergers and acquisitions,” Monaco said.
In a statement, Lafarge said none of the conduct alleged by the Justice Department involved its “operations or employees in the United States and none of the executives who were involved in the conduct are with Lafarge or any affiliated entities today.”
“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. “We deeply regret that this conduct occurred and have worked with the U.S. Department of Justice to resolve this matter.”
Lafarge operated the cement plant, built at a cost of $680 million, from 2010 to 2014. After the start of the Syrian conflict in 2011, according to the Justice Department, Lafarge and its Syrian unit “negotiated agreements to pay armed factions in the Civil War to protect LCS employees, to ensure continued operation of the Jalabiyeh Cement Plant, and to obtain economic advantage over their competitors in the Syrian cement market.”
Matthew Olsen, assistant attorney general for national security, noted that Lafarge and its subsidiary made illegal payments to the two terrorist groups at a time they were “brutalizing innocent civilians in Syria and actively plotting to harm Americans.”
“There is simply no justification for a multi-national corporation authorizing payments to designated terrorist organizations,” Olsen said.
Lafarge, one of France’s largest companies, has long faced charges of human rights violations and terrorism financing in connection with its work in Syria. Last year, the French Supreme Court ruled that the company could be charged with crimes against humanity. The company has denied the allegations.