Winnipeg police HQ loss higher than expected: court documents

The dollar amount lost in the construction of the Winnipeg police headquarters is believed to be "substantially higher" than previously thought, according to an RCMP affidavit filed in court last June.

RCMP Const. Marc Allard also said that some subtrades involved in the work have been complicit with Caspian as it relates to specific business records.

"Many other companies, trades and contractors have been discovered as the result of reviewing the business records of Caspian and email correspondence," wrote Allard in an application to a judge. "We continue on making new discoveries of criminal activity involving the falsifying of documents." 

The June court documents say RCMP confirm "the falsifying of records are being found in change orders, quotes, progress claims and other supporting documents" in Caspian's business records. Allard alleged investigators in the commercial crime section are "seeing several consistent themes of fraudulent activity by Caspian involving the various sub trades and businesses."

The RCMP investigation into allegations of fraud at the new Winnipeg police headquarters is looking into "the largest data set" ever examined in provincial history, according to court documents.

In a raid of Caspian Construction offices in December 2014, officers seized approximately 46 banker boxes and "four filing cabinets representing thousands of financial documents." Court documents reveal Mounties also copied six terabytes of digital material, including 200,000 email messages from Caspian's hard drives and servers, including external servers in Ontario.

Two months after the police raid, an RCMP officer looking into the allegations said he expected charges would be laid in the case, according to court documents.

"I believe the items seized under the authority of the search warrant … will afford evidence to support charges of fraud and similar charges which I anticipate will be laid at the conclusion of this investigation," Allard wrote in court documents obtained by CBC.

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​In the court documents, Allard also commented on what police had seen in the two months since searching Caspian's office. "From the initial review, some documents have been identified as false or misrepresented as it pertains to work being coded to the new Winnipeg police headquarters​.​" ​ But more than a year after that statement, the investigation is still not complete.​

Safe opened, cash seized

​​During the search, RCMP busted open the safe in Caspian owner Armik Babakhanians' office, which contained cash which was "bagged and sealed," according to court documents.

Officers were forced to transport the money to RCMP headquarters on Portage ​A​venue for safekeeping until it could be returned to the Babakhanians. He was out of the country on holidays at the time of the search and officers did not know when he was to return. Babakhanians personally picked up the money at "D" division last April. 

Mounties call in help

The Mounties are not looking into Caspian's records on their own. A forensic accountant was hired ​at the beginning of 2015 ​to analyze the financial records, and it was anticipated the work would take several months. As of June, the accountant's term was to be extended to the end of August 2015. Police have not said whether it was extended again.

RCMP investigators were also looking for construction professionals with experience in multimillion dollar construction projects to review change orders, documents and records for their "technical validity." That project was also expected to take several months. 

​By February 2015, police had conducted more than 30 interviews in the investigation. That number jumped to more than 80 as of two weeks ago, an RCMP spokesperson said. 

"At times, the RCMP had 14 investigators assigned to this case in addition to a number of specialized support staff. This is a large and extremely complex case​,​" Sgt. Bert Paquet said in an email.

Charges have not been laid in the case and ​none of the allegations have been proven in court. 

Calls to Armik Babakhanians have not yet been returned.

Based on CBC's calculations the total cost of Winnipeg police headquarters $212,267,000. Tack onto that $6.2 million for financing and debts service costs and that brings the total to $218,503,869 including interest.

The original cost of the project was estimated to be $135 million.