(Bloomberg) -- Holcim Ltd.’s Lafarge unit pleaded guilty to US charges and agreed to pay $777.8 million fines and forfeiture for providing material support to the Islamic State in Syria to keep a cement factory operating in the war-torn country.
The case marks the first time a corporation has ever pleaded guilty in a US courtroom to aiding terrorists, prosecutors said.
Holcim Chief Sustainability Officer Magali Anderson, entered the plea Tuesday on Lafarge’s behalf in federal court in Brooklyn, New York. She said the French cement maker “knowingly and willfully agreed to participated in a conspiracy to make and authorize payments” that benefited organizations designated as terror groups by the US government.
Lafarge has been under investigation for years over accusations it aided the Islamic State and other terrorist groups by funneling money to them to keep its Syria plant running. The company is also facing criminal charges in France.
‘Errors of Judgment’
The cement maker has “accepted responsibility for the actions of the individual executives involved, whose behavior was in flagrant violation of Lafarge’s Code of Conduct,” according to a statement by the company. “We deeply regret that this conduct occurred and have worked with the U.S. Department of Justice to resolve this matter.”
Anderson said in court that the individuals responsible for the payments were “separated from the company since at least 2017.”
Switzerland-based Holcim issued a statement saying it wasn’t involved in the conduct and that former Lafarge executives concealed the activity before and after it bought its French rival in 2015. Trading in Holcim was halted in Switzerland, but shares in Paris fell 3% on the news.
The Lafarge plant, on Syria’s northern border with Turkey, was shut down after Islamic State seized it in September 2014 as employees fled. An internal probe found “significant errors of judgment” after money was paid to armed Syrian groups to safeguard the factory. The inquiry triggered the departure of the chief executive officer.
French Proceedings
The facility was subsequently converted into a strategic base for the US military until President Donald Trump withdrew American forces from Syria.
A French court in May reinstated charges that Lafarge aided and abetted “crimes against humanity” for its alleged actions to keep the plant operating.
Lafarge was initially charged in France in 2018 but the accusations were overturned after the company lodged a challenge. France’s top court later confirmed a terrorism financing charge against the company and paved the way for a reinstatement of the aiding and abetting charge.
Lafarge said it “continues to cooperate fully with the French authorities in their investigation of the conduct and will defend itself against any judicial actions that it regards as unjustified in the French proceedings.”
The plea was made Tuesday before US District Court Judge William Kuntz in federal court in Brooklyn.
(Updates with detail from plea hearing.)
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