Winnipeg police HQ contractor argues city's case doesn't add up to 'fraud,' 'conspiracy'

The contractor behind the scandal-plagued Winnipeg Police Services headquarters says the facts laid out in a City of Winnipeg lawsuit don't add up to "fraud," "conspiracy" and "misrepresentation."

A notice of motion filed last week in Manitoba Court of Queen's Bench by several of the defendants named in the suit asserts that even if the city's claims are true, the facts laid out in the lawsuit don't support the city's accusations.

The motion was filed on behalf of Caspian Projects Inc. and Caspian Construction owners ​​​Armik, Jenik and Shaun Babakhanians, as well as Caspian office manager Pamela Anderson and her company, Triple D Consulting Services.

"The paragraphs relating to 'fraud,' conspiracy,' and 'misrepresentation' are not plead with the precision and specificity required by law," said the notice of motion, filed on Jan. 23.

In a lawsuit filed on Jan. 6 of this year, the City of Winnipeg names more than two dozen defendants, including contractors, subcontractors, consultants and their principals, as well as former city chief administrative officer Phil Sheegl.

It alleges the defendants worked together to profit from the construction of the police HQ under false pretences. They are accused of allegedly coming up with a "scheme" to inflate and overcharge the city for the cost of construction, through fraudulent quotes and invoices, altered quotes from subcontractors and kickbacks. 

The lawsuit came after a five-year RCMP investigation into the construction project wrapped up in December 2019, with no charges laid.

The downtown police headquarters building, which opened in 2016, was $79 million over budget and three years behind schedule. The city has also alleged construction deficiencies.

In the notice of motion, Caspian, the three Babakhanians, Anderson and Triple D ask the court to strike out paragraphs alleging they conspired together to defraud taxpayers, but don't specifically deny any of the allegations made against them.

The defendants also take issue with being accused alongside one another, and all the other people named in the lawsuit.

"The paragraphs relating to 'fraud,' conspiracy,' 'misrepresentation' and 'conversion' improperly collectivize or 'lump together' all 'defendants' in the action," the notice of motion says.

To date, none of the defendants have filed a statement of defence, and none of the city's allegations have been tested in court.

City fighting for seized documents

The city is also seeking an order from the court to allow it to examine and make copies of documents seized by the RCMP during their investigation.

It says the documents include design development submissions, Caspian invoicing and accounting documents, subcontractor invoicing, Caspian correspondence with subcontractors, construction meeting minutes and change orders.

The city says it wants the documents directly from the RCMP, citing fears Caspian won't hand over all of the relevant paperwork. The city also expressed concerns that some of the evidence might be destroyed.

"There is also evidence of what appears to have been at least one previous attempt by Caspian and its principals to destroy potentially incriminating evidence," said the Jan. 29 motion brief.

The city referred to a suspected arson that took place in the summer of 2016 at an unoccupied warehouse owned by Caspian, which destroyed some documents relating to the Winnipeg mail processing plant — a project built by Caspian that was also under police investigation.

"The fire originated on top of a pile of those documents and there was evidence of tampering with the fire suppression system of the building," says the motion brief.

It also says the city hopes to identify other individuals who may have been involved.

"There are a number of other parties who may have been complicit in the scheme of which the city has no knowledge," the brief reads.

"There would be nothing preventing Caspian from considering any documentation related to these parties as irrelevant and failing to produce them, despite their clear disclosure obligation."

The lawyer representing Caspian, its principals, Anderson and Triple D did not return calls from CBC News for comment.

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