2014 search warrant alleges fraud by police HQ contractor Caspian

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This article was published 28/02/2016 (3181 days ago), so information in it may no longer be current.

The RCMP investigation into Winnipeg’s police headquarters — now into its 15th month — was sparked by fraud allegations involving Caspian Construction, the main contractor on the $214-million project.

In December 2014, the Mounties executed a search warrant at Caspian’s McGillivray Boulevard offices and spent three days removing computers and documents. The raid occurred four months after Manitoba Justice asked the federal police to look into the new headquarters for their municipal counterparts.

Since the initial raid, the RCMP have been tight-lipped about their investigation, going as far as to argue in court to extend the period in which the search warrant was sealed from public view.

The warrant, unsealed on Monday, alleges Caspian president Armik Babakhanians defrauded the city of more than $5,000 and used forged documents between February 2011 and December 2014. It also alleges Babakhanians and Caspian manager Pam Anderson created a forged document between February 2011 and August 2014.

No charges have been laid and the allegations have not been proven in court.

In the warrant, RCMP Const. Marc Allard states the Mounties were told Caspian engaged in “numerous instances of improper invoicing and payments in regards to services rendered” during the construction of the Winnipeg 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 states.

For example, the warrant states former Caspian employee Tiffany Gray “described several incidents where invoices were charged to the (Winnipeg police headquarters) that had nothing to do with the work being done.”

Gray stated that work included a swimming pool at a Headingley house belonging to Caspian employee Shaun Babakhanians, renovations at another Babakhanians family house and septic work at a third Babakhanians-owned property. Gray also cited irregularities involving other firms as well as inflated invoices involving police-headquarters sub-trades, alleging Caspian “coached the sub-trades on how to fill out the bids to quote low and then they would submit change orders.”

The warrant also states general contractor Fabca had some police-HQ invoices paid by Caspian but was then billed by companies owned by Armik Babakhanians. The warrant also states contactor Century Steel conducted work at a Winnipeg Transit garage as well as at the police HQ but all the invoices were shown to have involved the latter project.

In a brief telephone interview on Monday, Armik Babakhanians said he rejects the allegations made about himself and his firm.

The police headquarters has been plagued by delays and cost hikes since city council approved a $135-million purchase and renovation of the former downtown Canada Post building. The total project cost now stands at $214 million, due to a series of design changes and cost overruns, some of which were excoriated in a scathing external audit completed by consulting firm KPMG in July 2014.

The same month, former Canadian Taxpayers Federation prairie director Colin Craig sent a letter to Manitoba Justice, claiming two whistleblowers had approached the Winnipeg Police Service with allegations of doctored invoices at the police HQ and payments to “a member of council.”

According to the letter, only one witness was interviewed. Winnipeg police Chief Devon Clunis has since said his members acted upon the information they received.

In August 2014, Manitoba Justice asked the Mounties to review Craig’s letter as well as external audits of Winnipeg’s police headquarters, fire-paramedic stations and real estate transactions. According to the search warrant, the Mounties investigated the police-HQ file for months before they raided Caspian’s office and declared they were engaged in a criminal investigation.

More than 14 months later, no charges have been laid in the police-HQ case, RCMP Sgt. Bert Paquet confirmed on Monday.

“Once we complete our investigation, we will provide Manitoba Justice with all of the material and findings. A decision on charges will be made after this step has taken place,” Paquet said in a statement.

“We know there are a lot of questions surrounding information contained within the documents released but as this is an ongoing investigation and to maintain the integrity of the case, we are not able to provide any additional specific details at this time.”

Paquet said the RCMP has assigned 14 investigators to the case as well as “a number” of specialized support staff.

“This is a large and extremely complex case that has already involved over 80 interviews,” Paquet added. “RCMP investigators are also reviewing tens of thousands of pages of hard copies seized throughout the investigation as well as over 200,000 emails.”

bartley.kives@freepress.mb.ca