Preliminary hearing in MUHC fraud case kicks off

Former SNC-Lavalin CEO Pierre Duhaime is shown speaking during a news conference in Montreal, Monday, April 11, 2011. (Graham Hughes / The CANADIAN PRESS)

A preliminary hearing has begun for several people accused in connection with an alleged bribery scandal related to a $1.3 billion hospital project in Montreal.

Authorities say the awarding of the contract for the McGill University Health Centre project was the subject of an alleged fraud of $22.5 million.

They have alleged that former SNC-Lavalin executives funnelled money to ex-McGill hospital officials in exchange for the lucrative contract.

Former SNC Lavalin CEO Pierre Duhaime, former SNC Lavalin executive vice president Riadh Ben Aissa, ex-SNC-Lavalin vice-president Stephane Roy former MUHC executive Yanai Elbaz and his lawyer brother Yohann and Jeremy Morris, the administrator of Bahamas-based investment company Sierra Asset Management and British consultant St-Clair Martin Armitage are all facing charges in connection to what has been called the biggest fraud and corruption investigation in Canadian history.

Under the scheme, high-ranking SNC-Lavalin executives allegedly paid off senior officials with the McGill University Health Centre in order to obtain the lucrative $1.3-billion contract.

SNC-Lavalin executives allegedly used a $22.5-million bribe, given to Porter and Yanai Albaz, to ensure the contract for the construction of the superhospital went to their company. The money was discovered in banks accounts in the Bahamas.

"I'm trying to prove there's a reasonable foundation to the accusations and they should all be committed to trial," prosecutor Marie-Helene Giroux told reporters, adding evidence should be completed by April 2.

The preliminary hearing will last three weeks and hear from about 16 witnesses. Their testimony is protected by a publication ban.

Porter will not be present at the hearing, as he is fighting extradition from Panama. Yohann Elbaz has opted to go straight to trial instead of going through the preliminary inquiry process.

His wife Pamela will not be present either; she pleaded guilty to money laundering and in December was sentenced to serve 24 more months in jail, along with 12 months of probation and 240 hours of community service.

-- with a file from The Canadian Press

Timeline

-- In recent years, SNC-Lavalin has been dealing with the fallout from allegations of corruption levelled at several of its former senior executives. On Thursday, RCMP laid fraud and corruption charges against SNC-Lavalin itself and two of its subsidiaries following an investigation into their dealings in Libya. Here are some important recent dates involving SNC-Lavalin and its executives:

April 2010 - A consortium headed by SNC-Lavalin wins a lucrative $1.3 billion contract to build Montreal's new English-language superhospital.

May 2011 - Swiss authorities begin investigating Riadh Ben Aissa, a vice-president at SNC, on suspicion of corruption, fraud and money-laundering in North Africa.

February 2012 - SNC-Lavalin parts ways with Ben Aissa and in a release the company says it "reiterates that all employees must comply with our Code of Ethics and Business Conduct," but it does not explain further. Ben Aissa responds in a news release that he resigned and plans to take legal action against the engineering giant.

March 2012 - SNC-Lavalin chief executive officer Pierre Duhaime resigns abruptly after an independent review said he signed off on $56 million in payments to undisclosed agents, including $22.5 million in a single payment.

April 2012 - RCMP raid SNC-Lavalin's Montreal offices. An affidavit used to obtain a search warrant said police were looking for information relating to $160 million in kickbacks allegedly paid to the son of dictator Moammar Gadhafi, Saadi Gadhafi. The search warrant, which contains unproven allegations, stated the money was allegedly paid by Ben Aissa, who later denied the allegations. The document also implicated Ben Aissa, former SNC-Lavalin controller Stephane Roy and a consultant Cynthia (Cyndy) Vanier in an alleged effort to smuggle Gadhafi's son and his family to Mexico as the Libyan regime was failing in 2011. Vanier has proclaimed her innocence. Both Roy and Ben Aissa have filed civil suits against the company: Roy's action alleges wrongful dismissal, saying he was made a scapegoat and described as a rogue employee even though he always acted on the company's orders. Ben Aissa's brother suggested in a separate action that his brother was used as a scapegoat while protecting the company's interests in Libya in the face of political change.

April 2012 - Riadh Ben Aissa, the former vice-president at SNC, is charged in Switzerland.

April 2012 - Two former SNC employees, Ramesh Shah and Mohammad Ismail, are charged with one count bribery of a foreign public official, stemming from the awarding of a contract for the supervision and consultant services of the construction of the Padma Multipurpose Bridge in Bangladesh.

October 2012 - American Robert Card assumes the role of president and chief executive officer of SNC-Lavalin.

November 2012 -- Pierre Duhaime is charged in connection with the McGill University Superhospital contract. The charges allege Duhaime and Riadh Ben Aissa conspired to commit fraud and uttered false documents in connection with a contract pertaining to the McGill University Health Centre. The infractions are alleged to have taken place between April 30, 2009, and Aug. 31, 2011. Duhaime has pleaded not guilty.

February 2013 - SNC-Lavalin announces it has hired a former Siemens executive as its chief compliance officer to guide the company on ethics and matters of corporate governance.

February 2013 - Others are charged in the Montreal superhospital contract and additional charges are laid against Duhaime and Ben Aissa.

April 2013 - The World Bank bans an SNC subsidiary from bidding on World Bank projects for 10 years because of alleged misconduct in projects in Bangladesh and Cambodia. It was the longest bidding ban on World Bank Group-financed projects in the global agency's history and applies to SNC-Lavalin Inc. and more than 100 affiliates.

April 2013 - Consultant Cynthia Vanier is released from a Mexican prison after 18 months behind bars. She'd been arrested in November 2011 in the alleged plot to rent an airplane to sneak Saadi Gadhafi and members of his family into Mexico. Vanier has proclaimed her innocence.

May 2013 - SNC-Lavalin Group Inc. says it is making a limited-time offer of "amnesty" to whistleblowers within its workforce.

June 2013 - SNC-Lavalin says a gas project in the United Arab Emirates was used as a cover to transfer $13.5 million to unknown agents, a portion of the $56 million in questionable payments identified by the company in an internal investigation in 2012. The company said the amount was falsely attributed to the project even though the money went elsewhere. Another $20 million was also wrongly attributed to another project which SNC-Lavalin refused to identify.

September 2013 - The RCMP charges former SNC-Lavalin senior executive Kevin Wallace with bribery of a foreign public official, relating to the Bangladesh bridge contract. Counsel for Wallace says in a statement his client maintains his innocence and will fight to clear his name. Two others are charged as well.

September 2013 -- SNC-Lavalin's chief compliance officer says the company is working hard to become an ethical benchmark for its industry by correcting the problems that have damaged the engineering firm's reputation over the past 18 months. "We are well on our way and my perception is that our people, our employees, our executives completely understand what is required," Andreas Pohlmann said after addressing a fraud conference in Montreal.

February 2014 - The RCMP files criminal charges against two former senior SNC-Lavalin executives -- former executive vice-president Sami Abdallah Bebawi and Stephane Roy, a former vice-president. Bebawi was charged with fraud over $5,000; two counts of laundering proceeds of crime; four counts of possession of property obtained by crime; and with bribing a foreign public official. Roy is charged with fraud over $5,000; bribing a foreign public official; and contravening a United Nations economic measures act related to Libya. The offences are alleged to have taken place between 2001 and 2013. A warrant was issued for Bebawi's arrest as his whereabouts were not known.

February 2014 - SNC-Lavalin hires a senior executive from Dow Chemical Co. to oversee the company's governance, ethics and compliance efforts. David Wilkins becomes SNC's chief compliance officer reporting to the president. The company hired Wilkins to deal with the fallout from allegations of corruption levelled at certain former senior executives of the engineering and construction giant.

August 2014 - Riadh Ben Aissa, the former executive of SNC-Lavalin, reaches an agreement on charges stemming from allegations of money laundering, fraud and corruption involving the engineering giant's business in Libya under the Gadhafi regime. Ben Aissa has agreed with the charges in the indictment against him in Switzerland, paving the way for his return to Canada. Swiss authorities alleged Ben Aissa embezzled more than $120 million in funds from SNC-Lavalin.

September 2014 -- Ex-SNC-Lavalin vice-president Stephane Roy becomes the ninth person charged in connection with alleged fraud of $22.5 million involving the McGill University Health Centre, one of Canada's largest infrastructure projects, valued at $1.3 billion. Roy has maintained that he has always acted on the company's orders.

September 2014 - Bebawi faces new charges of obstructing justice, stemming from the alleged corruption of foreign public officials between 2012 and 2014. He is charged in conjunction with a tax lawyer.

October 2014 - A Swiss court accepts a guilty plea from Riadh Ben Aissa, the former SNC-Lavalin executive, and he is sentenced to three years in prison. With time served, he is returned to Canada in mid-October to face superhospital-related charges.

November 2014 -- SNC-Lavalin says it will reduce the company's global workforce by 4,000, or nine per cent of the total, over an 18-month period starting in 2015.

February 2015 - The RCMP announces it is laying charges stemming from the company's business dealings in Libya. SNC-Lavalin puts out a statement saying it will plead not guilty to the charges.

March 2015 - Preliminary hearing begins.