As RCMP investigation into Winnipeg's police HQ enters 5th year, no sign of charges or when it will end

On Dec. 17, 2014, the RCMP raided the offices of Caspian Construction, the primary contractor on the Winnipeg police headquarters project. "The investigation is ongoing," an RCMP spokesperson said last week.

RCMP raided offices of police HQ contractor Caspian Construction on Dec. 17, 2014

Four years ago, RCMP raided the offices of Caspian Construction, the primary contractor on the police HQ project. The investigation into that project is ongoing. (CBC)

The RCMP investigation into Winnipeg's police-headquarters project is entering its fifth year with no indication as to when it will conclude or whether any charges will be laid.

On Dec. 17, 2014, the RCMP raided the McGillivray Boulevard offices of Caspian Construction, the primary contractor on a project that saw Canada Post's former downtown Winnipeg warehouse complex converted into the new home of the Winnipeg Police Service.

On the first day of the raid, the RCMP said they were conducting a criminal investigation of the police HQ project. That project cost the city $214 million in real estate and construction charges by the time it was completed in 2016.

The investigation, codenamed Project Dalton, initially involved fraud and forgery allegations. According to information provided to a judge in order to obtain search warrants in 2014, the Mounties alleged Caspian engaged in "numerous instances of improper invoicing and payments in regards to services rendered during the construction."

The RCMP alleged in 2015 documents that Caspian owner Armik Babakhanians "used inflated and altered subtrade invoices and quotes to defraud the city of millions of dollars for work that was done at costs less than his fraudulent submitted costs."

At the time, Babakhanians deferred comment to his legal counsel. He did not respond to requests for comment last week.

RCMP raided the McGillivray Boulevard offices of Caspian Construction on Dec. 17, 2014. (Brett Purdy/CBC)

In 2015, the RCMP told a judge they were investigating allegations Babakhanians offered police-HQ project manager Ossama AbouZeid a $600,000 secret commission to benefit Babakhanians and an engineering subcontractor.

AbouZeid told CBC News in 2016 he never asked for the commission, was never offered one and never received one.

"In all my working life I have never asked for monies outside my contractual entitlements," AbouZeid said in a statement at the time.

Breach-of-trust allegations

The investigation later involved breach-of-trust allegations.

In information provided to a judge in 2016 in order to obtain bank records, the Mounties alleged former Winnipeg chief administrative officer Phil Sheegl provided inside information about the city's new police headquarters to Caspian and received $200,000 — and that Sheegl then shared the money with Sam Katz, Winnipeg's former mayor.

Lawyer Robert Tapper, representing both Sheegl and Katz, acknowledged in 2017 that Caspian owner Babakhanians paid Sheegl and that Sheegl paid Katz, but denied the RCMP's breach-of-trust allegations.

Tapper said Caspian's payment to Sheegl was part of a $327,000 Arizona real estate deal his clients made with Babakhanians in May or June 2011.

Tapper declined to respond to requests for comment last week.

None of the allegations made by the RCMP have been proven in court. No charges have been laid as a result of Project Dalton.

"The investigation is ongoing," RCMP spokesperson Robert Cyrenne said last week.

He could not say when it will wind up or whether the Crown is contemplating any charges. 

The City of Winnipeg is continuing to co-operate with the investigation, said Jeremy Davis, a spokesperson for Mayor Brian Bowman.

"We look forward to the outcome of the RCMP's investigation," said David Driedger, a spokesperson for the city's public service.

With files from Caroline Barghout and Joanne Levasseur