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The corruption scandal that has shaken Canada's largest engineering firm, SNC-Lavalin Group Inc., has expanded, with Swiss prosecutors now chasing $139 million in suspected illicit payments, more than double the amount of missing money that was first reported by the company, according to a Quebec media report.
Riadh Ben Aissa, the former SNC-Lavalin senior executive who previously had been identified by the company as the official who oversaw the distribution of at least $56 million in mystery payments, has also been formally charged by the Swiss justice department with fraud, money laundering and corruption, a joint report by Radio-Canada and the Swiss public broadcaster RTS, revealed Sunday.
Ben Aissa, who was first jailed in Switzerland in April on suspicion of those offences, has had his detention extended by prosecutors, the media report said. The Tunisian-Canadian executive was in charge of all of SNC's international construction projects, and was a key link for the company to the former Libyan regime of Moammar Gadhafi, the late dictator. In 2010, SNC's expected revenues from its Libyan projects, including an airport and prison complex, accounted for $418.2 million, or 7 percent of its total revenue.
Ben Aissa left the company early this year, after an internal forensic investigation into his affairs revealed that he had allegedly orchestrated the payment of $56 million in relation to two construction projects, which the company has not identified publicly. The forensic investigation also cost SNC's then CEO, Pierre Duhaime, his job; he resigned after a redacted version of the internal investigation report was released publicly.
According to the media report, prosecutors in Switzerland believe the funds flowed through two corporations registered to the British Virgin Islands - a British overseas territory with strict corporate secrecy provisions - and two Swiss banks. Prosecutors have also formally charged a Geneva lawyer, Roland Kaufmann, in connection with these payments, alleging that the lawyer helped facilitate the flow of these suspect funds by setting up offshore bank accounts and corporations. Prosecutors are having difficulty determining the ultimate destination of much of these payments, the media report said.
Kaufmann has also been identified as a financial adviser to Saadi Gadhafi, the third-born son of the late dictator. In the years before the Libyan revolution, SNC-Lavalin forged a close relationship with the dictator's son, sponsoring one of his soccer teams and hosting him in Montreal, before Gadhafi launched a joint venture with the company that was responsible for the construction of a prison complex, amongst other infrastructure projects.
In 2008, when Gadhafi purchased a $1.55-million penthouse in Toronto, on the property records he listed Kaufmann's Geneva office as the address for service.
The joint media report Sunday also revealed that Ben Aissa's predecessor at SNC-Lavalin, Sami Bebawi, an engineer who oversaw all of the company's international construction projects until he was replaced by Ben Aissa in early 2007, has also been questioned by Swiss authorities. Bebawi could not be reached for comment Sunday, and he has declined to respond to several requests for interviews over the past year.
Bebawi was made a senior executive at SNC-Lavalin in 1999 and co-ordinated an aggressive push by the company into several countries with regimes that have posed challenges for major multi-national firms, including Algeria and Libya.
SNC declined to comment on the $139-million figure reported on Sunday.
"We continue to collaborate in all investigations with authorities as they are pursued," Leslie Quinton, SNC's senior vice-president of global corporate communications, said Sunday. "As previously indicated on numerous occasions, we have provided, and will continue to provide, information to authorities in any and all investigations. We will not and cannot speculate on specific amounts of money that an active investigation may or may not be looking at."