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Hundreds of U.S. service members, civilians and their families have launched a sweeping legal battle in federal court, accusing one of the world’s largest tobacco companies of fueling terror from behind a veil of cigarette smoke.

The British American Tobacco North Korea terrorism lawsuit seeks unspecified damages from British American Tobacco (BAT) and a subsidiary, alleging the company covertly enabled North Korea to bankroll weapons programs later used in deadly attacks against Americans.

Filed Thursday in the U.S. District Court for the Eastern District of Virginia, the complaint invokes a federal law allowing victims of terrorist attacks to sue not only the alleged perpetrators, but also third parties accused of aiding, abetting or conspiring to support such acts.

Alleged Secret Venture and Sanctions Violations

BAT formed a joint venture in 2001 with a North Korean state-owned company to manufacture cigarettes inside the isolated nation. According to the lawsuit, the partnership continued quietly even after the U.S. government publicly accused North Korea of financing terrorism and imposed sanctions.

A 2005 Guardian investigation exposed the venture, revealing it persisted amid mounting geopolitical tension. In 2007, under growing international scrutiny, BAT said it was ending operations in North Korea. But the U.S. Department of Justice later alleged that the company secretly maintained the business through a subsidiary.

During a 2023 Senate hearing, Matthew Olsen, then head of the Justice Department’s national security division, said the venture generated roughly $418 million in banking transactions, producing revenue that advanced North Korea’s weapons programs.

That same year, BAT entered into a deferred prosecution agreement. The subsidiary pleaded guilty, and together they agreed to pay $629 million in fines to resolve charges of conspiring to violate sanctions and committing bank fraud.

“On behalf of BAT, we deeply regret the misconduct arising from historical business activities that led to these settlements,” then-Chief Executive Jack Bowles said in a statement in 2023. He acknowledged the company fell short of expected standards and said BAT had overhauled its compliance and ethics programs, strengthening safeguards related to sanctions, anti-bribery, anti-corruption and anti-money laundering.

Plaintiffs Link Funds to Deadly Attacks

The lawsuit contends profits from the cigarette venture — along with alleged smuggling — were funneled into North Korea’s weapons of mass destruction programs, benefiting Iran’s Revolutionary Guard Corps and Hezbollah.

According to the complaint, those weapons were used in attacks on Jan. 8, 2020, against the al-Asad and Erbil airbases in Iraq, and in a 2022 missile strike in Kurdistan. More than 100 U.S. soldiers were diagnosed with traumatic brain injuries following the 2020 attack, and more than a dozen people were killed. The 2022 strike injured many others.

The plaintiffs include about 200 service members who suffered injuries such as traumatic brain injuries and post-traumatic stress disorder. Also named are family members and the widow and estate of a man killed while aiding refugees during the 2022 Kurdistan attack.

“This case alleges a clear nexus between BAT’s clandestine scheme in North Korea and the weapons used in deadly terrorist attacks,” said Ryan Sparacino of Sparacino PLLC, who represents the plaintiffs.

Raj Parekh, a former acting U.S. attorney for the Eastern District of Virginia and now a partner at the firm, said the case seeks accountability for conduct that allegedly enabled attacks on Americans. “The devastating harm caused by terrorist violence does not fade with time — families carry it every day,” he said.

BAT declined to comment on the pending claims. “We do not comment on potential or pending legal claims,” a spokesperson said.

Legal Landscape and Broader Context

The complaint argues BAT either knew or recklessly disregarded that its alleged illicit partnership was financing missile and rocket attacks carried out by the IRGC and Hezbollah. It claims the company persisted in the venture for at least a decade despite repeated warnings and widespread reporting about North Korea’s support for terrorism.

The suit comes against a complex legal backdrop. In 2023, the U.S. Supreme Court unanimously ruled that victims of a 2017 Islamic State attack could not recover damages from Facebook, Twitter and Google, finding that inaction alone was insufficient without proof the companies “consciously and culpably” assisted the terrorist act.

Just last week, however, a federal appeals court in Washington revived a separate lawsuit accusing pharmaceutical companies of funding terrorism in Iraq by allegedly paying bribes to a Hezbollah-controlled militia to secure health ministry contracts. The companies in that case deny wrongdoing.

In the case against BAT, plaintiffs argue the evidence goes beyond passive conduct. They cite public and private reports, corporate filings and internal monitoring of U.S. government and media statements about terrorist financing risks.

“Its in-house personnel closely monitored U.S. government and media reports,” the complaint states, asserting BAT was acutely aware of the risks posed by the illicit cigarette trade and North Korea’s alleged support for terrorism.

Now, as the British American Tobacco North Korea terrorism lawsuit unfolds, the courtroom may become the next battleground in a long-running conflict over accountability, sanctions and the cost of global commerce conducted in the shadows.