The City of Winnipeg is still fighting in court to get documents from defendants, more than two years into its lawsuit alleging fraud by some of the contractors and consultants involved in the Winnipeg police headquarters construction project.
In January 2020, the city launched a civil lawsuit in Manitoba Court of Queen’s Bench against Caspian Construction and dozens of other companies and individuals involved in the construction of the downtown police HQ.
That was a month after a five-year-long RCMP probe into allegations of fraud and secret commissions associated with the project ended with no charges being laid.
The city has requested additional documents from the Caspian defendants, which include owner Armik Babakhanians, his family members and several of his companies.
To date, the City of Winnipeg has not received them all, chief administrative officer Michael Jack says in court documents.
The city is now asking the court to order the Caspian defendants to provide those documents, including income tax returns, notices of assessment dating back to 2010 and any correspondence with the Canada Revenue Agency related to the police HQ.
The city also wants the final cost ledger of the project.
A notice of motion filed by the city asks a judge to order the Babakhanians family, Caspian and connected companies to produce financial records for 39 bank accounts.
It wants records from 2009 — the year city council approved the purchase of a downtown Canada Post building and its conversion into a new Winnipeg Police Service headquarters — to the end of 2016, the year work on the project was completed.
“The Caspian defendants were performing work on the WPSHQ project up until September 2016,” wrote lawyer Michael Finlayson, who is representing the city in the suit.
The city is already in possession of some banking records for Babakhanians and his companies, as well as those of former city chief administrative officer Phil Sheegl and former mayor Sam Katz.
Those were obtained from the evidence gathered as part of the RCMP investigation into the HQ project.
Jack wrote in an affidavit that in October 2020, the city received 46 banker’s boxes of evidence seized by RCMP during their investigation.
The sheer volume of documents is cited by Babakhanians’s lawyer as one of the reasons for the delay.
“We have had six people reviewing records over the past two months and we are, unfortunately, not in a position to produce the records yet,” wrote Caspian lawyer Karen Poetker in an email included in the court filings.
Poetker did not respond to a request for comment on behalf of Caspian for this story.
City wants contractor’s medical records
The City of Winnipeg is also asking for Armik Babakhanians’s medical records for January 2012 to December 2013.
Babakhanians’s medical health came up in a letter written by one of the defendants in the lawsuit, consultant Peter Chang, in response to news stories about the RCMP investigation into the police HQ.
In a letter to his employer — Adjeleian Allen Rubeli Ltd., known as AAR, an engineering firm that worked on the headquarters project — Chang said that Babakhanians had asked for help with numerous projects he had on the go around the end of 2011, including the police headquarters, according to an affidavit.
Babakhanians told Chang he was diagnosed with a medical condition and “he needed us to assist his son Shaun in completing all this work,” said Chang’s letter, included by Jack as an exhibit in court filings.
Chang told his employer in that letter that this agreement was made before AAR was awarded the contract for the police HQ.
He was paid for that work by Caspian, through an affiliated company, “after Armik informed us that he would be putting an additional $2M to pay for all engineering services for … [the police headquarters] and his other projects that he had,” wrote Chang.
Jack’s affidavit noted Chang made similar statements to the RCMP when he was interviewed.
“If Armik is going to corroborate this in his evidence, we will need his medical records for the time period,” the city’s lawyer wrote in an email to Caspian’s lawyer, which was filed in court.
Asked for comment, Chang’s lawyer said his client’s position on the new court filings is the same as his statement of defence filed in late 2020, in which he denied that he was involved in, or benefited from, fraud as alleged.
The city also wants the court to impose a deadline for the production of a list of documents from Ossama AbouZeid — the director hired by the city to look after its interests in the police HQ project — and his company Dunmore.
AbouZeid and Dunmore have failed to provide an affidavit of documents “despite this court’s direction that … [they] were to be exchanged on or before January 15, 2021,” reads the city’s motion filed earlier this month.
“Our client denies any and all wrongdoing and quite frankly is not the focus of the litigation,” wrote AbouZeid’s lawyer, Jamie Kagan.
Jack says AAR has also refused a city request to produce documents, including income tax returns and correspondence with the Canada Revenue Agency relating to income or expenses claimed by the engineering firm for the police HQ project.
AAR’s counsel did not respond to a request for comment.
The city also says it is asking the court to order McCaine Electric Ltd. to preserve documents it has identified that could help with this case.
McCaine hasn’t been accused of any wrongdoing, but the city says in court filings that it wants invoices, quotes and agreements related to the redevelopment of the Winnipeg police HQ.
That includes the police service’s Wyper Road gun range, and Canada Post’s mail processing plant near the Winnipeg airport — another project Caspian worked on.
A staff member at McCaine Electric said it had no comment about the case.
Examination for discovery in the case — or in-person questioning — is scheduled to start in mid-July, beginning with Peter Chang.
Armik Babakhanians’s examination is scheduled for a week in August.