Caspian probe widens

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This article was published 09/03/2016 (3170 days ago), so information in it may no longer be current.

RCMP have cast their gaze upon a second public-sector project involving Caspian Construction, the Winnipeg firm facing allegations of fraud and forgery pertaining to the Winnipeg’s new police headquarters.

The Mounties are looking into the construction of Canada Post’s new mail-processing facility, which was completed by Caspian in 2010. The building near the airport replaced the Crown corporation’s downtown facility, which was purchased by the City of Winnipeg in 2009 and renovated by Caspian into the new home of the Winnipeg Police Service at a cost of $214 million.

In August 2014, RCMP began looking into allegations of fraud and forgery pertaining to police headquarters invoices. A formal criminal investigation started in December 2014, when the Mounties spent three days executing a search warrant at Caspian’s McGillivray Boulevard offices.

According to the search warrant, RCMP were looking for evidence of fraudulent invoicing and accounting activities pertaining to the police-HQ construction. According to additional court documents obtained by CBC Manitoba — but unavailable to the Free Press on Thursday — the Mounties seized two binders of documents pertaining to the Canada Post mail-processing facility near the airport.

The Crown corporation confirmed the RCMP acted upon those documents.

“Canada Post was first contacted by the RCMP on Feb. 2, 2016 regarding their investigation and has been fully co-operating. As this is a police matter, it would be inappropriate to comment further,” Canada Post spokesman Jon Hamilton wrote in an email.

A formal criminal investigation is not underway, however.

“RCMP investigators continue to review electronic files and are still evaluating all of the evidence obtained during the investigation. A determination as to whether a full criminal investigation will be undertaken by the RCMP will be made at a later date,” Sgt. Bert Paquet wrote in an email.

“We know there are a lot of questions surrounding the investigation but as this case remains active and ongoing, and to maintain the integrity of the case, we are not able to provide additional and specific details at this time,” he said, but added there are no plans to expand the scope of the existing investigation.

“At this point in our investigation, it appears that we will not be investigating other projects. The projects we see were ‘fixed cost’ projects that we have no reason to believe were fraudulent.”

Caspian president Armik Babakhanians could not be reached for comment. In February, he said he rejected the allegations against him and his firm.

In the 2014 search warrant, RCMP allege Babakhanians defrauded the city of more than $5,000 and used forged documents from February 2011 to December 2014. It’s also alleged Babakhanians and Caspian manager Pam Anderson created a forged document during that time frame.

In the warrant, RCMP Const. Marc Allard stated the Mounties were told Caspian engaged in “numerous instances of improper invoicing and payments in regards to services rendered” during the construction of the police service’s new downtown headquarters.

“Invoices are said to have been improperly associated to the WPS building when in fact the work was either done at other city properties, private properties or was not done at all,” Allard stated. He also alleged Caspian instructed subtrades to overcharge for work and “coached the subtrades on how to fill out the bids to quote low and then they would submit change orders.”

The documents obtained by CBC Manitoba referenced altered invoices involving subtrades on Canada Post’s new facility near the airport.

The City of Winnipeg purchased Canada Post’s old downtown complex in 2009 for $29.25 million as part of a sole-sourced sale arranged by Phil Sheegl, then Winnipeg’s deputy chief administrative officer. The city also agreed to extend Winnipeg Transit service to Canada Post’s new facility near the airport and build new traffic lights. 

bartley.kives@freepress.mb.ca