Auditor shows inquiry how he determined city paid $45M to $50M in excess claims for police HQ

Quotes that appeared inflated, a flurry of invoices written up in a 60-minute span, and billings submitted from a company that didn’t have workers are among the findings forensic accountant Victor Neufeld presented to the Winnipeg Police Service headquarters inquiry on Tuesday.

Neufeld painstakingly detailed some of the methods and documents he relied on to come up with his estimate that $45-$50 million of excess claims were submitted to and paid for by the City of Winnipeg. 

Neufeld is scheduled to appear before the inquiry for four days this week as part of the second phase of the inquiry, titled “The Money Trail.” 

The five-month long inquiry was called by the province to examine the procurement and construction of the police headquarters.

The Winnipeg Police Service HQ project has been subject to two city-commissioned audits, a five-year RCMP investigation that resulted in no charges, and a pair of lawsuits. 

The first lawsuit found former Winnipeg CAO Phil Sheegl received a $327,000 bribe from Caspian principal Armik Babkhanians. A second lawsuit was settled by Caspian and several other defendants in 2023 for a maximum of $28 million to be paid to the city.

After showing a slide with the calculations he used to come up with $6.7 million in estimated excess claims charged for doors and drywall, Neufeld explained how metadata — information embedded in digital files that includes things including the author's name as well as time and date stamps — led to a “significant” finding. 

He said 19 invoices that ranged in date from July 2012 to February 2014 all had a date stamp of March 5, 2014 between 8:14 and 8:56 a.m.

“[It] appears within a one hour, 19 of these invoices totaling millions of dollars were created in this fashion here. So to me, as an accountant, that is significant,” Neufeld said, one of several examples he showed to back up his finding that these invoices might have been created as a group. 

Neufeld presented two nearly identical documents to show that a price quote submitted by Caspian to the city to justify a request for additional funds was “inflated.” 

The document found in a folder belonging to the city was for $25,000. The one found in Caspian’s records was for $5,200. 

“All the work that we did all ties into real transactions behind literally thousands of invoices,” Neufeld said. 

When Neufeld dug into the documentation for the construction of a berm at the WPS shooting range, he found Caspian claimed three invoices totalling $2.6 million from Strada, a Garcea group company with no employees. 

“These invoice amounts appear to be entirely excess claims.” Neufeld said.