Former ad executive Jean Lafleur has pleaded not guilty to 35 fraud charges related to the federal sponsorship scandal.

Lafleur entered his plea in a Montreal courtroom Thursday afternoon, hours after he surrendered to Quebec provincial police at the Pierre Elliot Trudeau International Airport.

Jean Lafleur holds up a document at the Gomery inquiry into the federal sponsorship scandal in Montreal in February 2005.
(Paul Chiasson/Canadian Press)

He'll return to court on Friday for his bail hearing, after the Crown said it was opposed to conditional release.

Lafleur, 66, was arrested early Thursday morning, shortly after his flight from Belize touched down in Montreal.

Lafleur knew he'd be arrested when he reached Canadian ground, police said.

"He travelled alone on a commercial flight, and he knew Quebec provincial police would be waiting for him," police spokeswoman Chantal Mackels said.

The former executive's lawyer contacted Quebec Crown prosecutors Tuesday to tell them Lafleur was going to turn himself in to police, Mackels said. Police had issued a Canada-wide arrest warrant for Lafleur Friday.

Lafleur is alleged to have defrauded the government between 1996 and 2001. He faces a 35-count, $1.6-million fraud indictment for his alleged role in the federal sponsorship scandal.

Normally the RCMP would have handled the fraud investigation and Lafleur's arrest, but Quebec provincial police was asked to take over because of a conflict of interest involving the federal police force.

"The RCMP had received a sponsorship from Lafleur Communication, so for transparency reasons, that specific file was transferred to the Sureté du Québec [Quebec provincial police]," Mackels told CBC.

The former president of Lafleur Communication Marketing had been missing from Montreal for a few weeks, according to police.

Investigators went looking for him in late March at his apartment in Old Montreal, but according to neighbours in the building, Lafleur had not been seen since he took over the lease two years ago.

He had reportedly moved to Costa Rica.

Scandal helped drive Liberals from power

Lafleur is one of several Montreal-based ad executives involved in the federal sponsorship scandal.

Lafleur's company won millions of dollars in public contracts, and he is accused of deceiving the government to secure payments.

Millions of dollars flowed from Ottawa to several ad firms for little or no work, and some ad executives admitted to paying kickbacks to the Liberals' Quebec wing in return for lucrative federal sponsorship contracts.

The scandal devastated the Liberal party in Quebec and helped drive them out of power in the 2006 federal election.

A number of people involved in the sponsorship program have been found guilty and sentenced to jail for their roles in the scandal.

On Thursday, former advertising agency boss Jacques Paradis was acquitted on a charge of defrauding the federal government of $58,000 in sponsorship money.

Paradis was the one-time head of ad firm Publicité Martin who was charged in connection with a federal contract that involved the former Montreal Expos baseball team.

The Crown argued that Paradis charged the government $58,000 more than he should have. His lawyer pointed out to jurors that Paradis wasn't cited in Justice John Gomery's report into the scandal.

With files from the Canadian Press