RCMP raided Winnipeg police HQ last June in Caspian investigation
Police believe city overpaid $2.5 million for the new police HQ, according to court documents
RCMP raided an office inside the new Winnipeg police headquarters last June as part of its investigation into fraud and forgery by the building's general contractor, Caspian Projects, CBC News has learned.
After looking at a "small fraction" of the evidence it had collected up to that point, police believed the city overpaid $2.5 million for the new police headquarters building, according to the June 2015 information to obtain a search warrant.
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"Discrepancies were found between the monetary values that sub-trades charged Caspian and the amount Caspian then charged to the City of Winnipeg," wrote RCMP Cst. Julie Cote in court documents.
Officers believed they would find the information that was used by Caspian to back up invoices submitted to the city inside the second floor office on Graham Ave.
Peter Chang, principal engineer with AAR "recommended the costs based on the submission of Caspian's inflated documents and in turn, forwarded them to the City of Winnipeg," said Cote in court documents.
Chang was hired by the city in 2012 "as their consultant whose responsibility was to protect their interests" on the police HQ project, according to court documents.
Several sub-trade invoices, alleged to have been inflated by Caspian, were submitted to the city, including:
- Western Industrial Services Limited (WISL) — RCMP alleged Caspian inflated two WISL invoices by a combined total of $570,000 with the intention of defrauding the city. A WISL employee told investigators he did not quote the higher amount and the "amounts must have been changed after the fact," according to court documents. The company declined to comment to CBC News. Peter Chang of AAR recommended the higher invoice and it was submitted to the city for payment, RCMP allege in the court documents.
- Contempra Window Coverings — RCMP alleged Caspian inflated Contempra's quote by $137,530 and knowingly submitted it for approval to defraud the City of Winnipeg. Contempra owner Don Michalski told police the base price he was paid by Caspian was the lower amount and he did not recognize the new price, according to court documents. The documents say Peter Chang of AAR recommended the higher invoice and it was submitted to the city for payment. Contempra declined to comment.
- Calado Crane Rentals — RCMP alleged Caspian "altered the amount of Calado's invoice and knowingly submitted the forged invoice for approval" which was $52,500 more than the original. Calado employees told police they had no knowledge of the more expensive invoice, court documents say. Calls to Calado were not immediately returned.
AAR is the second company where offices were searched as part of the investigation into allegations of criminal wrongdoing during the building of the Winnipeg police HQ.
Cote alleged Caspian billed the city more than once for the same work and for work done at unrelated jobs, according to court papers. Caspian was conducting additional construction jobs during the building of the headquarters.
Cote alleges the City of Winnipeg was billed $1.8 million for steel work not connected to the police HQ in any way based on three invoices from Abesco. Abesco owner, Wally Fast, told police the work was done at an unrelated job site, the court documents say. Abesco did not immediately respond to a request for comment.
No charges have been laid and none of the allegations have been proven in court.
Armik Babakhanians and Peter Chang did not respond to requests for comment.