Caspian manager testifies about ‘fake’ invoices at police HQ inquiry

The office manager for Caspian Projects testified Wednesday that she followed instructions to alter costs on invoices for the Winnipeg Police Service headquarters project, and at times wrote notes that refer to “fake” and “real” claims.

Pamela Anderson, who works for the key headquarters contractor, told the public inquiry into the project that she took such steps at the direction of company owner Armik Babakhanians.

Anderson said she believed other Caspian employees also took part in changing documents, though she repeatedly stated that Babakhanians is best suited to explain the reasons for it.

Anderson also confirmed she wrote a note displayed at the inquiry about asking subcontractor McCaine Electric for a “fake inv” (invoice).

“I guess it would have been maybe a cover letter instead of the word fake but … that’s what I used,” she said.

Commissioner Garth Smorang asked whether she was specifically asking for an invoice that was not legitimate.

“That could be the reason for the fake (word), yes,” answered Anderson.

In another email, Anderson asks Babakhanians and others, “Is this a “real” invoice? Since our books are being audited, we have to show a paper trail.”

When asked what she meant by the word “real” in that question, Anderson said she was asking whether the invoice should be processed for payment or not.

“We could post it in the system but not pay it,” she said.

Anderson told the inquiry she sometimes put a piece of paper over an address to cover it, then photocopied the document.

“You told us you covered up addresses sometimes … so that it looked like it was all for the headquarters project, coming to Caspian?” asked Heather Leonoff, the legal counsel for the provincial inquiry.

“Correct,” Anderson answered.

Problems related to the headquarters at 245 Smith St. triggered multiple legal battles since it was completed in 2016. First expected to cost $135 million, the price soared to $214 million, when late flood damage and security upgrades are included.

Earlier this month, forensic accountant Victor Neufeld told the inquiry he estimates $45 million to $50 million in excess claims were filed for the HQ project.

Leonoff asked Anderson about Neufeld’s conclusion that Caspian billed the city for a “blended” tab of different construction projects, not just the headquarters work. The expert alleged Caspian sometimes blended costs for a church, Transit garage and police canine unit building into invoices billed for the HQ.

Anderson testified that a subcontractor was at one point asked to resubmit an invoice under the headquarters that actually reflected construction at the church, something she also believed happened for the canine unit building. She said she didn’t recall whether that happened with the transit garage.

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On Monday, Babakhanians testified he submitted hundreds of false invoices. However, he denied overcharging the city for the work. He also denied billing the headquarters project for work on other construction projects.

Babakhanians said the invoices he submitted aimed to cover the project’s guaranteed maximum price and an expected profit of $17 million to $18 million.

The City of Winnipeg is taking steps to claim a combined settlement of up to $28 million for fraud and construction deficiency lawsuits it filed in relation to the headquarters project.

joyanne.pursaga@freepress.mb.ca

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Joyanne Pursaga
Reporter

Joyanne is city hall reporter for the Winnipeg Free Press. A reporter since 2004, she began covering politics exclusively in 2012, writing on city hall and the Manitoba Legislature for the Winnipeg Sun before joining the Free Press in early 2020. Read more about Joyanne.

Every piece of reporting Joyanne produces is reviewed by an editing team before it is posted online or published in print — part of the Free Press‘s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.