Wednesday, November 28, 2012

From the Good Folks Who Bilked You the Canada LIne, will build Evergreen and, Lord knows, maybe the Broadway/UBC Ditch

November 28, 2012

Pierre Duhaime, former SNC-Lavalin CEO, arrested on fraud charges


Pierre Duhaime arrested Wednesday morning at his home and has been charged with three counts – conspiracy to commit fraud, fraud and making use of forged documents

Former SNC-Lavalin Group Inc. president and chief executive officer Pierre Duhaime has been arrested on fraud-related charges.

Mr. Duhaime was arrested Wednesday morning at his home and has been charged with three counts – conspiracy to commit fraud, fraud and making use of forged documents – said Anne-Frédérick Laurence, spokeswoman for the Quebec government's Unité permanente anticorruption.

He is being held in jail and will be released on bail, she said.

She said she cannot provide more details.

A second former SNC senior executive – Riyad Ben Aissa – also faces the same three charges, said Ms. Laurence.

Mr. Ben Aissa is currently being held in a jail cell in Switzerland.

Mr. Duhaime left the Montreal-based engineering and construction giant last March in the midst of a financial scandal related to improper payments through its international operations.

Investigations in that matter continue in Canada and Switzerland.

The provincial anti-corruption squad is investigating aspects of a billion-dollar contract SNC and its partners struck with the McGill University Hospital Centre to build a new hospital.

Arthur Porter, the former head of the McGill University Hospital Centre, resigned last year and has not responded to the allegations.

SNC and several other engineering firms were also targeted recently in a series of raids at their offices in the Montreal suburb of Laval.

Raids were also conducted at city hall as well as the two homes of Laval mayor Gilles Vaillancourt, who recently stepped down amid allegations of widespread corruption and collusion between the construction industry and government officials in Laval, Montreal and other municipalities.

Mr. Duhaime left SNC amid allegations he overruled the company's chief financial officer and approved $56-million in payments to unknown agents to secure contracts for the company. The money has gone missing and another company executive, Riyad Ben Aissa who ran SNC's Libyan operations, is in jail in Switzerland under investigation for fraud.

At the time of his departure, SNC praised Mr. Duhaime's contributions to the company and portrayed his removal as a "retirement." The company also paid him nearly $5-million in severance.

Mr. Duhaime, who is from Quebec City, became CEO of SNC in 2009. Tunisian-born Mr. Ben Aissa ran SNC's activities in Libya as well as the company's construction operations worldwide. That year, according to the board, Mr. Ben Aissa approved a $30-million contract to an agent to help win a contract.
The company alleged Monday that the agent's arrangements were not properly documented, had nothing to do with the project and the identity of the agent could not be verified.

SNC said on Wednesday it has no knowledge "of the specifics of any charges that may have been laid against [Mr. Duhaime]" and cannot comment further.

"As we have stated repeatedly, SNC-Lavalin has and will continue to co-operate fully with all authorities who request our assistance," the company said in a news release.

"We have voluntarily turned over information that we have to local and other authorities for them to take any actions that they may consider appropriate.

"We are unequivocal that no unethical behaviour or illegal acts must ever be tolerated. We believe that anyone found to have committed any wrongdoing in connection should be brought to justice."

In 2010, the McGill University Health Centre project was given a gold award for project financing by the Canadian Council for Public-Private Partnerships. The award cited the "innovative financing put in place by Groupe immobilier santé McGill, composed of SNC-Lavalin and Innisfree Ltd., as part of the overall project mandate."

British infrastructure investor Innisfree is SNC's main partner in the consortium financing and building the hospital.

Once finished, the health complex is to be leased to the Quebec government for 30 years.

"We're deeply troubled by the statements contained in the warrant alleging the fraud against MUHC, especially as we administer public funds for health purposes," Richard Fahey, spokesman for McGill University Health Centre, said in an interview.

The MUHC has been fully collaborating with investigators ever since they raided its offices for documents related to the case, he said.