The structure was originally slated to cost $135 million but ended up costing more than $210 million by the time it was finished in 2016
WINNIPEG—The City of Winnipeg is suing construction companies, consultants and a former top city official, alleging they engaged in fraud and deceit that drove up the cost of a new police headquarters building.
The lawsuit alleges there were inflated invoices, altered quotes and kickbacks in the five years it took to erect the building.
The structure was originally slated to cost $135 million but ended up costing more than $210 million by the time it was finished in 2016.
The statement of claim contains allegations that have not been proven in court, and no statements of defence have been filed.
There was no immediate comment from lawyers who have represented the major contractor, Caspian Projects, and Winnipeg’s former chief administrative officer Phil Sheegl.
The RCMP earlier investigated the matter for possible fraud and breach of trust, but prosecutors announced last month there was not sufficient evidence to lay charges.
“The decision … to not proceed with criminal charges did not end the matter,” Michael Jack, the city’s chief corporate services officer, said in a written statement Monday.
“The city has the right to seek damages to protect its interests when it has suffered loss or damages as a result of an alleged fraud or negligent conduct.”
The statement of claim names more than 30 defendants. It alleges some “knowingly and fraudulently altered and/or inflated actual bona fide quotes and invoices,” which resulted in the city being overcharged for work.
The document also alleges a company owned by Sheegl received $200,000 from a company connected to Caspian Projects four months before Caspian was awarded the contract for the headquarters.
“The contractors, the contractor principals … and Sheegl conspired and combined amongst themselves and other unknown persons to procure, and induce the city to award, the Phase 1 contract to the joint venture by, among other things, providing kickbacks to Sheegl and/or the Sheegl companies and to other unknown persons in exchange for improper procurement advantages,” says the claim.
Robert Tapper, a lawyer who has represented Sheegl in previous matters, told the CBC in 2017 that the money Sheegl received was part of an unrelated real estate transaction involving property in Arizona.