Ex-manager sentenced to 39 months prison in MUHC fraud scandal

Yanai Elbaz, front, and his brother Yohann Elbaz, left, arrive for their fraud trial at the courthouse in relation to the MUHC hospital. Ryan Remiorz/The Canadian Press

A former hospital executive who pocketed a $10-million bribe in return for helping engineering giant SNC-Lavalin win a Montreal hospital-building contract was sentenced Monday to 39 months in prison.

Quebec court Judge Claude Leblond sentenced Yanai Elbaz in a case that has been described by Quebec authorities as the largest corruption fraud case in Canadian history.

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Elbaz and Arthur Porter, the former CEO of Montreal’s English-language superhospital, received a total of $22.5 million to rig the bidding process to favour SNC-Lavalin, an agreed statement of facts in the case said. Porter died a fugitive in Panamanian custody in 2015 without ever facing trial.

Leblond accepted a joint recommendation from the defence and Crown that followed Elbaz’s Nov. 26 guilty plea.

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“The court considers the common suggestion proposed is an adequate sentence in the circumstances,” Leblond said.

Elbaz pleaded guilty to four charges: accepting a bribe, influence peddling, breach of trust and money laundering.

In an agreed statement of facts tied to Elbaz’s plea, the former McGill University Health Centre (MUHC) senior manager admitted to giving privileged information to SNC-Lavalin to help its submission for the contract to build a massive hospital complex in west-end Montreal. Elbaz also admitted to denigrating SNC’s competitors in front of the hospital’s selection committee.

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Elbaz has been detained since his guilty plea, and Leblond took those days in custody into consideration, knocking 32 days off his sentence.

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Elbaz is prohibited from communicating with former and current SNC-Lavalin executives as well as potential witnesses in pending trials. The only outstanding case among those originally charged is former SNC-Lavalin chief executive Pierre Duhaime. His trial is set to begin in February.

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Prosecutor Claudie Lalonde-Tardif welcomed the sentence, saying prosecutors will seek orders to seize Elbaz’s bank accounts and a home in the coming weeks.

“It is a significant sentence under the circumstances, and it reminds people crime doesn’t pay, and there will be significant sentence handed down by the courts.”

Before declaring the sentence, Leblond ruled against the McGill University Health Centre, which had been seeking an order granting it $6-million frozen in Elbaz’s Swiss bank account.

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Alexander De Zordo, a lawyer for the hospital, had told the court the MUHC contract was inflated by up to 20 per cent, meaning it is owed as much as $934 million.

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While the contract to build the hospital complex was $1.3 billion, the total cost was close to $4.6 billion when costs of managing the public-private partnership were factored in. Since seeking $934 million from Elbaz is unrealistic, De Zordo suggested the hospital should receive at least what is in the frozen bank account.

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Leblond noted in his ruling that damages would not be easily calculated and said the matter should be dealt with through civil proceedings. He said he would leave it up to a Quebec Superior Court judge hearing the civil case to decide the fate of the $6 million — an amount traced back to the $10-million payoff.

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