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Pierre Duhaime leaves SQ headquarters in Montreal, Wednesday, November 28, 2012.Graham Hughes/The Canadian Press

When Pierre Duhaime abruptly left SNC-Lavalin Group Inc. in March, the Montreal engineering firm praised his work as chief executive officer and paid him nearly $5-million as a "departure arrangement."

But Mr. Duhaime is now at the centre of a criminal probe that dates back to his first days as CEO and appears to be tied to $22.5-million in alleged improper payments SNC made to agents to help win construction projects. The controversy has cast a cloud over SNC, one of Canada's best-known companies, and raised questions about a $2.3-billion hospital project in Montreal that SNC is leading.

On Wednesday, police in Montreal charged both Mr. Duhaime and a former SNC vice-president, Riadh Ben Aissa, with three criminal charges over allegations of fraud at the hospital project, which involves redevelopment of the McGill University Health Centre. None of the allegations have been proven in court.

Mr. Duhaime and Mr. Ben Aissa had been colleagues at SNC for more than 20 years, rising through the ranks together. Mr. Duhaime officially took over as CEO on May 7, 2009, about two years after Mr. Ben Aissa began running the company's far-flung international construction operations, concentrating in particular on North Africa and Libya. Mr. Ben Aissa, who was born in Tunisia, also oversaw the Montreal hospital development, which began in 2010.

Both men left SNC earlier this year amid allegations $56-million in improper payments had been made to unknown agents to help the company secure construction bids. SNC said the money had vanished and it blamed most of the impropriety on Mr. Ben Aissa, who has denied the allegations. But it also alleged Mr. Duhaime approved some of the agent payments over the objections of the company's chief financial officer.

According to a report released by SNC in March, Mr. Ben Aissa arranged one agent payment in 2009 through a subsidiary called SNC-Lavalin International Inc. The company said the counter party in the agent agreement "appears to be without substance" and the individuals named don't exist. It added that the agreement was for $30-million in total and that $22.5-million was paid during 2010 and 2011 before the company uncovered the payments. It is not clear what the payments were for.

The SNC report appears to coincide with one of the criminal charges filed against Mr. Duhaime and Mr. Ben Aissa by police on Wednesday. That charge involves a contract dated May 1, 2009, between SNC-Lavalin International Inc. and a company called Sierra Asset Management Inc. Police alleged in court filings that the contract was counterfeit.

It is not clear what the contract was for or how much money was involved, but it is tied to the investigation into the Montreal hospital project. Both men were also charged with two counts of fraud against the McGill health centre. The date of the contract is six days before Mr. Duhaime officially became CEO, although he had been selected for the position in March, 2009, and had been with the company since 1989.

SNC submitted a technical and financial proposal for the McGill University Health Centre project in November, 2009, and it was formally selected to lead the redevelopment in April, 2010. Construction began shortly afterward.

Mr. Duhaime and Mr. Ben Aissa could not be reached for comment and their lawyers were unavailable. Mr. Ben Aissa has been held in a prison in Switzerland for months while police there conduct an investigation into alleged corrupt payments in North Africa. Despite recent media reports, Swiss officials said they have yet to charge him as part of their probe.

In a statement, SNC said it was not aware of the specifics of the criminal charges. "As we have stated repeatedly, SNC-Lavalin has and will continue to co-operate fully with all authorities who request our assistance," the company added.