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Monday
Dec152014

‘Victim’ SNC-Lavalin collects $13 million in recovered funds

Canada's biggest engineering and construction firm is recovering more than $13 million, claiming it was a victim of alleged bribes paid to the son of former Libyan dictator Moammar Gadhafi.

The Wall Street Journal's James Grimaldi and Margaret Coker reported that SNC-Lavalin's recovery "has surprised many lawyers involved with stolen-asset recovery efforts, because the work has been focused on returning ill-gotten gains to the countries, not firms whose officials paid bribes."

An affidavit prepared by the Royal Canadian Mounted Police in April 2012 tied former SNC-Lavalin executive  Riadh Ben Aissa to more than $160 million in alleged bribes paid to Libyan officials in exchange for engineering contracts.

Switzerland's federal crime court accepted a plea deal in October with Ben Aissa. He had spent 29 months in prison there. Under the deal, he reportedly forfeited about $40 million in cash and property.

Ben Aissa has also been named in connection with alleged bribes of $22 million SNC-Lavalin paid for a contract to build the $2.4 billion McGill University Health Center in Montreal.

He was extradited to Canada in October and released on bail in mid November.

The Wall Street Journal said "records allege [that] Saadi Gadhafi, the 44-year-old son of the deceased dictator, received from SNC-Lavalin officials about $50 million, junkets, a Toronto condo and a luxury yacht in exchange for construction contracts totaling $5 billion to build an airport in Benghazi; a prison in Tripoli; and the world’s largest water project, the Great Man Made River."

A search of the World Bank’s Stolen Asset Recovery initiative database revealed only one other case with a recovery by a corporate "victim," the WSJ said. In 2012, Jack Stanley, the former CEO of Kellogg, Brown & Root LLC, paid the company $9.25 million as partial court-ordered restitution for kickbacks he took when he ran the company.

Stanley was sentenced to 30 months in prison for conspiracy to violate the Foreign Corrupt Practices Act and commit mail and wire fraud. He admitted taking kickbacks from contracts KBR signed with governments in Nigeria, Malaysia, Egypt, and Yemen.

Under Swiss law, the Wall Street Journal said, "SNC-Lavalin was permitted to file as a victim of the corruption, and the Swiss Criminal Court agreed."

The company said it didn't know about alleged bribes by two former executives and was victimized by their alleged embezzlement.

"It asked for and received $13.3 million," the WSJ said.

In April 2013, SNC-Lavalin was barred from World Bank-funded projects for ten years because of alleged corruption in Bangladesh, Cambodia, Libya, and Algeria.

The company's former CEO, Pierre Duhaime, pleaded not guilty in Canada in early 2013 to corruption charges connected to the McGill University Health Center.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.