Former SNC CEO Pierre Duhaime arrested by UPAC

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MONTREAL - The former head of Canada’s largest engineering firm is charged with defrauding the Montreal University Health Centre while preparing the bidding process for the MUHC’s $1.3-billion superhospital.
Pierre Duhaime, 58, the former CEO of SNC-Lavalin Group Inc., was arrested at his Dorval home Wednesday morning by members of Quebec’s anti-corruption squad. He and another former SNC executive, Riadh Ben Aissa, 54, are suspected of using a counterfeit document to cheat the MUHC during a period that stretched between April 30, 2009, and Aug. 31, 2011.
Bids to build the so-called superhospital, which is still under construction, were accepted near the end of 2009, and the provincial government rejected the initial offers because they were over budget. Funding for the project, a private-public partnership, was eventually secured in 2010.
Anne-Frédérick Laurence, spokesperson for the anti-corruption squad, UPAC, said Duhaime was to be released on a promise to appear in court at a later date.
She also said efforts will be made to have Ben Aissa returned to Canada to face the same three charges filed against Duhaime at the Montreal courthouse on Wednesday.
Both men are accused of conspiring to commit fraud against the MUHC, fraud and using a counterfeit document, a contract, to commit fraud.
Ben Aissa is currently detained in Switzerland where, according to some media reports, he was recently charged with money laundering in relation to $139 million in payments in North Africa. Ben Aissa left SNC-Lavalin this year after an internal audit by the company turned up more than $56 million in unexplained payments. The former senior executive oversaw the engineering firm’s international construction projects before he left.
UPAC raided the MUHC’s administrative offices in September. An Oct. 1 article published in La Presse alleged that UPAC was specifically investigating whether SNC-Lavalin paid $22 million to obtain the $1.3-billion superhospital contract. That contract was awarded to a consortium headed by SNC-Lavalin.
The $22 million, according to the report, was allegedly part of the $56 million in unexplained payments uncovered through SNC’s audit. Citing unnamed sources, La Presse reported the amount was transferred through several countries in 2010 and 2011. Duhaime abruptly left SNC-Lavalin in March.
Richard Fahey, director of public affairs for the MUHC, said he does not know what the charges filed Wednesday specifically refer to.
“What I can say is that we are deeply troubled by the statement made in the arrest warrant — a fraud against the MUHC. Because we are administering public funds for health care, it is troubling. That is our reaction today on the statements contained in the warrant,” Fahey said.
“Obviously, I don’t need to state it again, but we’ve said it from the get-go when UPAC visited us in September, we are fully co-operating with the authorities. At this stage there is a limited amount of comments we can make.”
Fahey said he had never heard of Sierra Asset Management Inc. (the company named as being part of the counterfeit contract with SNC-Lavalin International Inc.) until news of Duhaime’s arrest broke Wednesday. The company appears to be a reference to a U.S. investment firm based in California. But the charge, part of an arrest warrant, makes no mention of whether the investment firm was actually aware of the alleged counterfeit document. The Gazette was not able to reach a representative from Sierra Asset Management Inc. for a comment Wednesday.
A financial report SNC-Lavalin presented to its investors in March makes reference to “a total of 22.5 million American dollars” in payments made through an intermediary to one of the firm’s intermediaries in Tunisia. According to the report publish by La Presse in October, it is these payments that were targeted when UPAC raided the MUHC’s offices in September. The financial statement notes the payments were approved by a senior executive in a way that didn’t conform with SNC-Lavalin’s own rules.
Leslie Quinton, a spokesperson for SNC-Lavalin, said through a statement released Wednesday: “We have not been made officially aware of the specifics of any charges that have been laid against (Duhaime) and are not able to comment further.
“As we have stated repeatedly, SNC-Lavalin has and will continue to co-operate fully with all authorities who request our assistance. We have voluntarily turned over information that we have to local authorities for them to take any actions that they may consider appropriate.”
A woman who answered the telephone at Duhaime’s  Dorval home on Thursday night refused to speak to The Gazette about the charges.