SNC-Lavalin pleads guilty to fraud for past work in Libya, will pay $280M fine

A division ofSNC-Lavalin Group Inc.has pleaded guilty to fraud over $5,000in relation to thecompany's activities in Libya,ending thecriminal case at the centre of one of the year's biggest political controversies.

SNC-Lavalin Construction, the division in question, paid $127 millionto two shell companies between 2001 and 2011, according to an agreed statement of facts presented in a Montreal courtroom Wednesday.

Duvel Securities Inc. and Dinova International Inc. both listed as the sole beneficial ownerRiadh Ben Aissa, a former top executive of the company who pleaded guiltyin Switzerland to bribery and laundering millions to win SNC-Lavalin contracts in Libya.

About $47 million of that money was then used to reward Saadi Gadhafi, son of the late dictator Moammar Gadhafi, for helping SNC-Lavalin secure lucrative construction projects.

The company also paid for Saadi Gadhafi's personal expenses, including decorating his Toronto condo.

Quebec Court Judge Claude Leblond accepted a joint recommendation that will seethe company's construction division pay a$280-million fine over five years, and be placed on probation for threeyears.

Five other fraud and corruption charges filed against SNC-Lavalin, SNC-Lavalin Constructionand SNC-Lavalin International weredropped.

Federal prosecutor Richard Roy citedas mitigating factorsthe guilty plea and measures the company has taken to reform its practices to minimize the risk of recidivism.

The fine, he said, reflects the severity of the crime that was committed.

"Our duty is to provide for efficient, proportionateand deterrent sentencing," he said.

"Thesentence must be a deterrent, generally, but must not be crippling and vindictive. And we believe that the result in this case achieves that."

Settlement is fair, company says

The company said it accepts the consequences, as well as a condition it will hire an independent monitor who will submit annual reports on the company's business dealings to the court. Those reports will also be posted on SNC-Lavalin's website.

"We are pleased to settle these legacy issues and remove these legal uncertainties overhanging the company,"said Kevin Lynch, chairof the company's board of directors, in a release.

"We feel this settlement is fair, and we deeply regret this past behaviour which was contrary to our values and ethical standards," he said.

Under federal law, a conviction could result in a bidding ban for federal projects for up to 10 years. It could also prompt a ban on bidding for projects backed by the World Bank.

The company said it does not believe the guilty plea will affect the eligibility of SNC-Lavalin Group companies to bid on future projects. The construction division has not bid on any new contracts since the charges were laid in 2015.

SNC-Lavalin stock trading was halted on the Toronto Stock Exchange ahead of the news. The shares rose 20.5 per cent in early afternoon when they resumed.

On Sunday,former executive Sami Bebawiwas found guilty in a separate caseof paying off foreign officials as he worked to secure contracts for the firm.

Trudeau violated ethics laws

The company had tried to resolve the case by securing what's known as a deferred prosecution agreement (DPA), which would have avoided a trial and possible criminal conviction in exchange for paying a fine.

An Ethics Commissioner's report concludedthat Prime Minister Justin Trudeauviolated ethics lawswhen he triedto persuade histhen-justice minister Jody Wilson-Raybouldto reverse her decision to not grant the agreement.

Wilson-Raybouldeventually quit cabinet and was kicked out of the partyover the matter. She was re-elected as an Independent in the last election.

She tweeted about the plea Wednesday, saying she has "long believed in the essential necessity of our judicial system operating as it should based on the rule of law and prosecutorial independence, and without political interference or pressure.

"Ultimately, that system was able to do its work as democracy and good governance requires and an outcome was reached today. Accountability was achieved."

Quebec Premier Franois Legault said he is happy there will be consequences for one division of the company.

He said so far, he has heard that the company will be able to protect jobs.