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

SNC-Lavalin Construction, the division in question, paid $127 million to 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 owner Riadh Ben Aissa, a former top executive of the company who pleaded guilty in 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 see the company's construction division pay a $280-million fine over five years, and be placed on probation for three years.

Five other fraud and corruption charges filed against SNC-Lavalin, SNC-Lavalin Construction and SNC-Lavalin International were dropped.

Federal prosecutor Richard Roy cited as mitigating factors the 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, proportionate and deterrent sentencing," he said.

Five other fraud and corruption charges filed against SNC-Lavalin, SNC-Lavalin Construction and SNC-Lavalin International were dropped in exchange for the guilty plea. (Paul Chiasson/The Canadian Press)

"The sentence 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, chair of 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.

(Rob Easton/CBC)

On Sunday, former executive Sami Bebawi was found guilty in a separate case of 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 concluded that Prime Minister Justin Trudeau violated ethics laws when he tried to persuade his then-justice minister Jody Wilson-Raybould to reverse her decision to not grant the agreement.

Wilson-Raybould eventually quit cabinet and was kicked out of the party over 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."

2019 began with very public questions about the rule of law in our country. I am glad to see it end with that principle being upheld. The justice system did its work. It is time to move forward and for the company to look to its future. (3/3) —@Puglaas

Quebec Premier François 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.