City lawyers ask for $ 1.2 million more to pursue possible $ 24 million in Winnipeg Police Headquarters fraud case – Winnipeg


The City of Winnipeg Legal Team has asked for an additional $ 1.2 million to hire help to examine the “massive volume” of paperwork surrounding the Winnipeg Police Headquarters fraud case .

The team also alleges that there could be up to $ 24 million in fraudulent activity surrounding the case.

The city filed a declaration and notice of motion in January 2020, accusing a large number of people and businesses in connection with the construction of the new Winnipeg Police Department headquarters.

The city alleged that the contractors behind the company, Caspian Construction, along with dozens of others, including former CAO Phil Sheegl, orchestrated a vast plot to inflate prices and quotes and ultimately increase the cost of the project.

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Sheegl and Caspian Construction have denied all allegations. None of the allegations have been proven in court.

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As the city seeks roughly $ 700,000 in damages from Sheegl alone, the city’s director of legal services Doug Brown said Tuesday they believe the city has been defrauded of up to $ 24 million, if not, more.

“It’s a surprising starting point, frankly, and I can tell you exactly how many have grown.

“I can’t give you a definitive number at this point, but that number has certainly increased significantly.”

Brown said the team didn’t anticipate needing more money to complete the accounting and discovery process.

According to the report, the city decided to continue after a first examination “identified more than 20 million dollars of claims from contractors and subcontractors related to the project which are not clearly documented or accounted for”.

“Legal and forensic work done to date has identified a serious pattern of potential misconduct consistent with the allegations made in the City’s statement. These questions require additional forensic and legal examination. “

The report states that after the initial fraud report, attorneys uncovered new information that “suggests the city paid Caspian over $ 24 million… in connection with invoices from Fabca Projects Ltd. (“Fabca”). These invoices have been variously described as relating to demolition, asbestos decontamination and other matters.

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“None of the work described in the invoices was carried out by Fabca. It would appear that none of the $ 24 million was ultimately paid to Fabca.

Fabca was initially part of the city’s civil lawsuit, but the city filed a disclaimer against them last year.

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The legal team said if one or more of the defendants in the civil case were found to be responsible for fraud around the WPS headquarters building, it is likely that a judge would award the costs to the city, recovering the costs. legal.

However, this is not guaranteed, Conseil. Brian Mayes pointed out.

The city has already spent $ 2.85 million on outside lawyers and forensic accounting, according to the report.

The EPC unanimously adopted the motion, and it will now go to council for approval.

Read the entire claim declaration:

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The RCMP opened an investigation into the matter in 2014 at the request of the province.

That investigation turned cold in December 2019 when Manitoba Justice said it would not lay charges due to lack of evidence.

Despite this, the city has filed a civil action against Sheegl, Caspian Construction and others because it is easier to prove a case in civil court than in criminal court.

“The first is the burden of proof in a criminal case,” said Karen Busby, professor of law at the University of Manitoba last year.

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“You have to prove it beyond a reasonable doubt. While in a civil case, it suffices to prove it on a balance of probabilities. This is number 1.

“No. 2, in a criminal case the accused persons have the right to remain silent. They do not have to cooperate. They have nothing to say. But in a civil case they do. And they must. produce documents on demand.

“And third, there might be differences in what exactly needs to be proven in terms of the elements of the alleged wrongdoing. So, you know, the standard of a trustee and for a criminal charge might be different from the standard of a trustee for a civil claim. “

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