The city is going to court over alleged fraudulent activity during police HQ construction
WINNIPEG -- The City of Winnipeg has announced it’s suing several companies, individuals and its former top bureaucrat over the scandal-plagued downtown police headquarters project, alleging in a statement of claim the defendants conspired with each other to defraud the city by orchestrating and implementing a kickback scheme.
The move comes just weeks after prosecutors announced no criminal charges would be laid in connection to the project.
The city alleges it suffered financial losses because the defendants – including Caspian Construction, former Winnipeg CAO Phil Sheegl and others – conspired with each other to obtain a secret profit for their own benefit.
"Today's legal actions are against a number of parties and include serious allegations of fraudulent activity and a complex kickback scheme,” Winnipeg Mayor Brian Bowman told reporters Monday at city hall. "I can assure Winnipeggers that their municipal government will use any and all available legal means under its authority to seek accountability."
The cost of the police headquarters project ballooned, ending up tens of millions of dollars over budget. CTV News Winnipeg previously reported the construction project came in around $85 million over budget.
The RCMP investigated for five years and last month, after examining all available evidence the Manitoba Prosecution Service decided it's not sufficient enough to proceed with criminal charges, prompting the city to proceed civilly.
The statement of claim listed no specific amount of money – it seeks general, special and punitive damages to be determined at trial.
"To be clear, what we've articulated in the statement of a claim is a scheme,” said Michael Jack, the city’s chief corporate services officer.
It alleges the defendants including contractors and consultants "designed, orchestrated, and implemented a scheme to defraud the city and thereby obtain monies under false pretences."
The statement of claim alleges it was done through "the creation of fraudulent and/or inflated sub-trade quotes, invoices” which were meant “to wrongfully inflate the cost of the project.”
It also alleges: “The payment of secret commissions and other benefits (“kickbacks”) to the contractors, the consultants, the contractors principals, the consultant principals, their related corporations, Sheegl, the Sheegl companies and other unknown persons in return for their participation and complicity in the scheme.”
"What we have is more than sufficient evidence in front of us demonstrating the scheme that we're alleging,” said Jack.
None of the allegations have been tested in court and no statements of defence have been filed.
CTV Winnipeg has reached out to Caspian and Sheegl for comment but has not heard back.
The city, through a notice of motion filed in court, is also requesting the RCMP and Manitoba Prosecution Service preserve and give the city access to all the documents and files obtained during the criminal investigation.
"We know there is more information to be learned, more information to be gleaned from what is available,” said Jack. “Particularly, in what is in the possession of either the RCMP or Manitoba Justice."
This isn't the first lawsuit launched by the city in connection with the police headquarters project – a separate lawsuit dealing with deficiencies in the building is still before the courts.
-with files from CTV's Kayla Rosen