A global building materials manufacturer and its subsidiary pleaded guilty today to a one-count criminal information charging them with conspiring to provide material support and resources in Northern Syria from 2013 to 2014 to the Islamic State of Iraq and al-Sham (ISIS) and the al-Nusrah Front (ANF), both U.S.-designated foreign terrorist organizations. Immediately following the defendants\u2019 guilty pleas this morning, U.S. District Judge William F. Kuntz II sentenced the defendants to terms of probation and to pay financial penalties, including criminal fines and forfeiture, totaling $777.78 million.<\/p>\n
According to court documents, Lafarge S.A., headquartered in Paris, France, and Lafarge Cement Syria (LCS) S.A., headquartered in Damascus, Syria, schemed to pay ISIS and ANF in exchange for permission to operate a cement plant in Syria from 2013 to 2014, which enabled LCS to obtain approximately $70.3 million in revenue.<\/p>\n
\u201cThe terrorism crimes to which Lafarge and its subsidiary have pleaded guilty are a vivid reminder of how corporate crime can intersect with national security,\u201d said Deputy Attorney General Lisa O. Monaco. \u201cThe defendants partnered with ISIS, one of the most brutal terrorist organizations the world has ever known, to enhance profits and increase market share \u2014 all while ISIS engaged in a notorious campaign of violence during the Syrian civil war. 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.\u201d<\/p>\n
\u201cThe defendants routed nearly six million dollars in illicit payments to two of the world\u2019s most notorious terrorist organizations \u2013 ISIS and al-Nusrah Front in Syria \u2013 at a time those groups were brutalizing innocent civilians in Syria and actively plotting to harm Americans,\u201d said Assistant Attorney General Matthew G. Olsen of the Justice Department\u2019s National Security Division. \u201cThere is simply no justification for a multi-national corporation authorizing payments to designated terrorist organizations.\u201d<\/p>\n
From approximately May 2010 to September 2014, Lafarge, through LCS, operated a cement plant in the Jalabiyeh region of Northern Syria (the Jalabiyeh Cement Plant) that Lafarge had constructed at a cost of approximately $680 million. After the start of the Syrian Civil War in 2011, Lafarge and LCS 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.<\/p>\n
As Lafarge executives made clear in contemporaneous emails, their motives were primarily economic. LCS executives purchased raw materials needed to manufacture cement from ISIS-controlled suppliers; paid monthly \u201cdonations\u201d to armed groups, including ISIS and ANF, so that employees, customers and suppliers could traverse checkpoints controlled by the armed groups on roads around the Jalabiyeh Cement Plant; and eventually agreed to make payments to ISIS based on the volume of cement that LCS sold to its customers, which Lafarge and LCS executives likened to paying \u201ctaxes.\u201d<\/p>\n
Lafarge and LCS executives intentionally structured their agreements with ISIS to compensate the terrorist organization based on the amount of cement that LCS was able to sell \u2013 effectively, a revenue-sharing agreement \u2013 to incentivize the terrorist group to act in LCS\u2019s economic interest.<\/p>\n
As a condition of entering into this revenue-sharing agreement, Lafarge and LCS executives sought ISIS\u2019s assistance to impose costs on competitors selling Turkish cement imported into northern Syria, which was often sold more cheaply than cement produced at the Jalabiyeh Cement Plant. LCS executives made clear to the intermediaries negotiating with ISIS that, in exchange for LCS paying ISIS 750 Syrian Pounds per each ton of cement that it sold, they expected ISIS to take action against its competitors, either by stopping the sale of competing imported Turkish cement in the areas under ISIS\u2019s control, or by imposing taxes on competing cement that would allow LCS to raise the prices at which it sold cement.<\/p>\n
\u201cIn the midst of a civil war, Lafarge made the unthinkable choice to put money into the hands of ISIS, one of the world\u2019s most barbaric terrorist organizations, so that it could continue selling cement,\u201d said U.S. Attorney Breon Peace for the Eastern District of New York. \u201cLafarge did this not merely in exchange for permission to operate its cement plant \u2013 which would have been bad enough \u2013 but also to leverage its relationship with ISIS for economic advantage, seeking ISIS\u2019s assistance to hurt Lafarge\u2019s competition in exchange for a cut of Lafarge\u2019s sales. Today, Lafarge has admitted and taken responsibility for its staggering crime. Never before has a corporation been charged with providing material support and resources to foreign terrorist organizations.\u00a0This unprecedented charge and resolution reflect the extraordinary crimes committed and demonstrates that corporations that take actions in contravention of our national security interests in violation of the law will be held to account.\u201d<\/p>\n
\u201cThis guilty plea is a result of extraordinary collaboration among the FBI, the Department of Justice, and our international partners,\u201d said FBI Deputy Director Paul Abbate. \u201cThe result demonstrates to anyone who would seek to contribute to ISIS\u2019s terrorist activities, that the FBI will relentlessly pursue, and hold them accountable, regardless of where, or how, they attempt to hide.\u201d<\/p>\n
From August 2013 through October 2014, Lafarge and LCS paid ISIS and ANF, through intermediaries, the equivalent of approximately $5.92 million, consisting of fixed monthly \u201cdonation\u201d payments to ISIS and ANF, payments to ISIS-controlled suppliers to purchase raw materials, and variable payments based on the amount of cement LCS sold. Lafarge and LCS also paid the equivalent of approximately $1.11 million to the third-party intermediaries for negotiating with and making payments to ISIS and ANF on Lafarge\u2019s and LCS\u2019s behalf. In addition, when LCS eventually evacuated the Jalabiyeh Cement Plant in September 2014, ISIS took possession of cement that LCS had produced in furtherance of the conspiracy, and ISIS sold the cement at prices that would have yielded ISIS approximately $3.21 million. As a result of the scheme, LCS obtained approximately $70.30 million in total sales revenue from August 2013 through 2014. The gains to all participants in the conspiracy, including LCS, the intermediaries and the terrorist groups, totaled approximately $80.54 million.<\/p>\n
Lafarge and LCS executives actively concealed their scheme to provide material support to ISIS and ANF. For example:<\/p>\n
Lafarge was eventually acquired by a competitor (the Successor Company) in a transaction that closed on July 10, 2015. Lafarge executives did not disclose LCS\u2019s payments to ISIS and ANF to the Successor Company during pre-acquisition diligence meetings, and the Successor Company conducted neither pre- nor post-acquisition due diligence of LCS\u2019s operations in Syria, which had terminated by the time the transaction closed. Lafarge, LCS and the Successor Company also did not self-report the conduct or fully cooperate in the investigation.<\/p>\n
Lafarge and its subsidiary pleaded guilty to conspiring to provide material support to designated foreign terrorist organizations and admitted to negotiating with and paying armed groups and terrorists, negotiating revenue-sharing agreements with ISIS to seek economic advantage, and concealing their payments, falsified records, and backdated contracts.<\/p>\n
DOJ<\/p>\n","protected":false},"excerpt":{"rendered":"
A global building materials manufacturer and its subsidiary pleaded guilty today to a one-count criminal information charging them with conspiring to provide material support and resources in Northern Syria from 2013 to 2014 to the Islamic State of Iraq and al-Sham (ISIS) and the al-Nusrah Front (ANF), both U.S.-designated foreign terrorist organizations. Immediately following the […]<\/p>\n","protected":false},"author":3507,"featured_media":179618,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":[]},"categories":[1],"tags":[],"jetpack_publicize_connections":[],"yoast_head":"\n