WINNIPEG — The City of Winnipeg has received a payment in trust amounting to $28 million from contractor Caspian, who were defendants in a lawsuit that stemmed from fraud and deficiencies of the Police Service Headquarters project at 245 Smith St.
Assuming the trust conditions are resolved, this payment will represent the last of several made to the city in the last few years totalling approximately $29.67 million, a release reads.
“Nearly $30 million has now been recovered for Winnipeg taxpayers, which is a major win for our city,” said Mayor Scott Gillingham in a statement. “This outcome shows that pursuing this matter was the right call. I want to thank the city’s legal team and staff across the organization who worked for years to see this through. Their persistence delivered real results for Winnipeggers.”
The development of the headquarters ran more than $70 million over budget by the time it was completed in 2016. The initial budget was $135 million.
The project was riddled with controversy. In 2022, in civil court, the city’s former chief administrative officer Phil Sheegl was found to have accepted a $327,000 bribe from Armik Babakhanians, owner of Caspian Projects.
The RCMP investigated the project and no criminal charges were laid. Sheegl argued the money he received from a Caspian executive was for an unrelated real estate deal in Arizona. He appealed the civil court decision but lost.
The project is now the subject of a public inquiry, which kicked off earlier this year.
The province approved $2.3 million for the inquiry, which is set to run until June.
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