Well, Innocent III was a right bastard, who St. Lutgarda saw burning in hell, but that quote’s not his.
It was Arnaud Alaric, a Cistercian abbot and even more evil prick, during the Albigensian Crusade, when sacking the French town of Béziers.
When they discovered, from the admissions of some of them, that there were Catholics mingled with the heretics they said to the abbot “Sir, what shall we do, for we cannot distinguish between the faithful and the heretics.” The abbot, like the others, was afraid that many, in fear of death, would pretend to be Catholics, and after their departure, would return to their heresy, and is said to have replied “Caedite eos. Novit enim Dominus qui sunt eius - Kill them all for the Lord knoweth them that are His” (2 Tim. ii. 19) and so countless number in that town were slain. --as reported by Caesarius of Heisterbach, (ca. 1180 – ca. 1240)