Transit garage invoices billed to Winnipeg police HQ: court documents

The under-budget Winnipeg Transit garage on Brandon Avenue may have cost more than originally thought, according to allegations made in court documents unsealed today and obtained by CBC News.

The documents authorized the search of Caspian Construction's headquarters on McGillivray Boulevard.

The RCMP is investigating the company and its owner Armik Babakhanians over allegations of fraud and forgery in connection with the construction of the Winnipeg Police Service (WPS) headquarters building on Graham Avenue.

"Invoices are said to have been improperly associated to the WPS building when in fact the work was either done at other city properties, private properties or was not done at all," RCMP Const. Marc Allard stated in the documents.

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One of the city properties was the new Winnipeg Transit garage. Caspian won the contract to build the 135,000-square-foot facility in 2012.

Under budget

On the day of its official opening in February 2014, the city issued a press release that noted the transit project came in $350,000 under its $22.6-million budget.

Witnesses interviewed by RCMP alleged Caspian was billing expenses for the Winnipeg Transit garage in Fort Rouge to the Winnipeg police headquarters. These expenses included roofing work, insulation and metal stairs.

In one case, altered documents were used, according to what a former employee told police in court documents.

Police said Babakhanians and an office manager "did knowingly make a false document ... with intent that it be acted upon as genuine and did thereby commit forgery."

The alleged forgeries were invoices for insulation. A former accounting assistant who worked at Caspian between between March and August 2013 said an office manager would place the Winnipeg police headquarters label on top of the transit garage invoice, photocopied it and "whited out the lines and photocopied it again to make it appear as an original invoice," according to court documents.

Employees from the contractor that provided stairs and railings for both buildings told investigators $53,800 of an $253,000 invoice billed to police headquarters "was for work actually completed at the Winnipeg Transit garage," according to court documents.

The former Caspian accounting assistant said the person checking invoices for the Winnipeg Transit garage would not approve costs that were over budget.

"It was up to Caspian to come under budget or on budget" for the transit garage, she told investigators.

"At Winnipeg police headquarters, it was not an issue because Caspian had a person in place to approve invoices."

A senior accounting assistant who worked with Caspian for five years told investigators the transit garage contract was a "set price," but when it came to the police headquarters "Caspian can only make a certain percentage profit on the job. Caspian has to provide proof of cost to the City of Winnipeg to ensure they do not exceed the maximum percentage profit."

She did admit that she had not seen the police headquarters contract in the court documents.

This same assistant described "unusual invoicing" from a separate contracting company for work done on the Winnipeg police headquarters, which added up to millions of dollars.

She said some of the "invoices were paid by Caspian Projects, and then in turn, some of Armik's [Babakhanians] companies not related to the Winnipeg police headquarters job have invoiced [the company] to get the money back."

When contacted by CBC News, Babakhanians declined to comment and referred questions to his lawyer. The lawyer, Patrick Riley, has not responded to requests for comment.

An RCMP spokesperson told CBC News charges have not been laid in the case and the investigation is ongoing.

None of the allegations have been proven in court.