Canada Post continued to pay builders of the Winnipeg mail-processing plant six years after the facility was complete, and more than a year after RCMP first learned of possible fraud in the construction project, CBC News has reported.
The details are found in a Feb. 2, 2017 sworn affidavit RCMP used to force TD Bank to provide records related to the joint venture between Caspian Projects Inc. and AECON, the two companies hired by Canada Post to build the Winnipeg mail-processing plant near Richardson International Airport in 2008.
CBC says RCMP said earlier this year they are investigating the construction of the mail-processing plant, which was built by the company responsible for the Winnipeg police headquarters project — which has been under investigation for two years.
Both the airport postal facility and the downtown police HQ were built by Caspian Construction.
Investigators were permitted to look at the banking activity in the joint-venture account between July 1, 2008 — the date the contract was signed to construct the Winnipeg mail-processing plant — and Jan. 1, 2016, when RCMP said Canada Post made its last payment to the builders.
CBC News says it has made repeated requests to Canada Post to ask why it was still paying the Caspian-AECON joint venture for a project they finished building in 2010, but the Crown corporation declines to discuss the matter.
“We do not disclose or discuss details of contracts as they are commercially sensitive,” Canada Post spokesperson Jon Hamilton was quoted as saying.
The Winnipeg Construction Association (WCA) said it’s highly unusual for a company like Canada Post to still be paying builders six years after a project was completed.
“Normally the final monies flow after the building is declared substantially complete by the design team,” said WCA president Ron Hambley. “At that point, the builders lien holdback of 7.5 per cent plus amounts for outstanding items would remain to be paid.”
“Lien holdback is supposed to flow after 40 days. The other amounts won’t flow until work is completed,” Hambley said.
According to court documents, the RCMP first learned of possible fraud in the construction of the Winnipeg mail-sorting plant on Dec. 17, 2014 while searching Caspian’s office as part of its investigation into the construction of the Winnipeg police headquarters building, CBC has reported..
During the search, officers found and seized two binders of invoices for the mail plant with the words “true” and “inflated” written on them.
At the time, according to a police affidavit, the officer who discovered the binders believed that if someone had received an inflated quote, “they may have been a victim of a fraud.”
“The investigation into the Canada Post mail-processing plant began in late 2015,” RCMP spokesperson Robert Cyrenne said in an email to CBC News, but wasn’t able to say why.
In the affidavit, RCMP alleged that between 2008 and 2011 Caspian’s owner, Armik Babakhanians, defrauded Canada Post of more than $5,000 by submitting a fraudulent copy of a quote from one of the sub-contractors hired to work on the mail facility.
But the Mounties didn’t notify Canada Post about the investigation until February 2016, more than 14 months after they suspected fraud in the construction project.
When asked why, Cyrenne said: “We won’t be discussing any other aspect of the investigation at this time.”
Caspian and AECON declined to comment to CBC.