Winnipeg police HQ contractor loses appeal for documents seized during fraud investigation

The contractors behind the Winnipeg police headquarters construction project will not get back boxes of documents and data seized by the RCMP until the conclusion of a civil lawsuit, Manitoba's Court of Appeal judge has ruled.

The April 7 appeal court decision is the latest in a long legal battle over the construction project, and in the fight over documents seized as part of an RCMP investigation that began more than six years ago.

In December2014,RCMP executed a search warrant on the offices of Caspian Construction as part of aninvestigation into alleged fraud and forgery connected with the downtown police headquarters project.

Over the course of three days, police seized 46 boxes of documents. The Mounties also got a production order for Caspian's backup computer data.

In late 2019, the province announced that the RCMP's investigation was over and no charges would be laid.

Within weeks, the City of Winnipeg sued Caspian and dozens of othersinvolved in the construction project forallegedly defrauding taxpayersof more than $24 million through fraudulent paperworkand secret kickbacks. At the time,the city also asked courts for access toseized material in the RCMP's possession.

Manitoba Court of Queen's Bench Justice Glenn Joyalsided with the city and ordered RCMP to hand over the documents, which they did.

In September, some of the defendantsincludingCaspian Projects Inc., Caspian Construction Inc., Caspian owner Armik Babakhanians, his wife,Jenik Babakhanians, his son Shaun Andre Babakhanians, and Caspian's office manager, Pamela Anderson appealed that decision.

Theyargued that since theRCMP investigation was over, the Mountieswere no longer lawfully in possession of the documents and should return them.

This week's Manitoba Court of Appeal decision foundJoyaldid not errin his ruling.

"The decision in question was a matter wholly within the discretion of the case management judge who was in the best position to determine such issues. We were not persuaded that he misdirected himself or that his decision amounted to an injustice," said the Manitoba Court of Appeal's written decision.

Last Month, Winnipeg's former chief administrative officer lost his bid to question two RCMP officers who investigated the allegations of fraud and bribery in the police HQconstruction project.

Phil Sheegl's lawyer had accused the Mounties of knowingly misrepresenting information about the former CAOin sworn statements in order to obtain production orders on his bank accounts.

Sheegl is one of the people being sued by the city in the police headquarters lawsuit. LastJune, Justice Joyal granted an application to split Sheegl's case from the rest of the defendants.

His lawyer successfully argued that Sheegl's case should be dealt with separately "because 99 per cent of the city's case doesn't involve him."