WINNIPEG \u2014 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.<\/p>\n
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.<\/p>\n
\u201cNearly $30 million has now been recovered for Winnipeg taxpayers, which is a major win for our city,\u201d said Mayor Scott Gillingham in a statement. \u201cThis outcome shows that pursuing this matter was the right call. I want to thank the city\u2019s legal team and staff across the organization who worked for years to see this through. Their persistence delivered real results for Winnipeggers.\u201d<\/p>\n
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.<\/p>\n
The project was riddled with controversy. In 2022, in civil court, the city\u2019s former chief administrative officer Phil Sheegl was found to have accepted a $327,000 bribe from Armik Babakhanians, owner of Caspian Projects.<\/p>\n
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.<\/p>\n
The project is now the subject of a public inquiry,<\/a> which kicked off earlier this year.<\/p>\n