Fears of witness intimidation, destruction of evidence revealed in Caspian case

During the RCMP investigation into fraud allegations in the construction of the Winnipeg Police Headquarters building, and the Canada Post Mail Processing Plant, the Mounties fought to keep details of their case sealed for fears two witnesses could be "subjected to harassment or intimidation," according to court documents obtained by CBC.

The papers also reveal concerns from the crown's office that if the identities of possible "targets" -- or suspects in the investigation -- were made public, it could lead to the potential destruction of evidence.

The details are found in a package of material Canada Post filed in court to support its fight for access to documents seized by RCMP in the fraud case. The crown corporation appears before a Manitoba judge today to argue its position.

Canada Post wants to analyze the paperwork to determine if it's owed money in the construction of the Winnipeg Mail Processing Plant near the James Richardson International Airport, which was finished in 2010.

• CBC INVESTIGATES Canada Post was still paying builder of Winnipeg mail plant a year after RCMP discovered possible fraud
• Canada Post requests access to documents seized for RCMP fraud investigation at Winnipeg plant

​Both the postal plant and the Winnipeg police headquarters were built by contractor Caspian - their offices were raided by the Mounties in December 2014.

Three years later, police still have the documents they seized in that search and Canada Post wants a judge to grant it access to them.

RCMP are opposed to that and have been against disclosure of documents in this case for years.

That position was made clear in a May 29, 2015 sworn affidavit of RCMP Constable Marc Allard - which had not been made available to the public until a few months ago.

Allard wrote the affidavit to oppose a 2015 CBC News application for access to the information police provided the courts for approval to search Caspian. In it, he outlined the Mounties case and expressed concerns for the safety of two witnesses in particular - if the information became public.

RCMP concerned for safety of witnesses

"I believe either could be subjected to threats or other safety concerns, directly or indirectly, from Armik Babakhanians, [Caspian's owner]," Allard wrote in the May 29, 2015 affidavit.

"My belief is based upon the sheer scope of Armik Babakhanians' criminal activity, and his present or past associations with:"

Allard then named two Winnipeg businessmen, John Garcea, who owns S&J Construction, and Ray Rybachuk, who died in 2013.

"Garcea has a personal relationship with Babakhanians. Garcea has been previously accused of uttering threats, in a RCMP file from 2014," Allard wrote in 2015. "Witness information in that file indicates Garcea has previously threatened clients and competitors," the affidavit said.

No uttering threats charge has ever been laid against Garcea.

Allard said Rybachuk and Babakhanians were believed to have maintained a business relationship "via ownership in the Boyd Building in Winnipeg."

"Rybachuk was a notorious thug known to both RCMP and Winnipeg Police, and believed to have ties to organized crime," alleged the affidavit.

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These allegations are from a series of sworn but unproven claims made by RCMP when they applied to obtain search warrants in the fraud investigation.

None of the police accusations have been proven in court and no charges have been laid.

Former mayor not a target in case

In the 2015 affidavit, Allard also noted concerns about the disclosure of witness allegations that he said had not yet been verified and could cause harm to reputations.

"Former City of Winnipeg mayor Sam Katz is not presently a target of this investigation. At this time, the witnesses' allegations in the ITO [a document police used in 2014 to get a judge to sign off on the Caspian search warrant] that he received payments from Caspian have not been corroborated, or are not considered to be criminal in nature. Disclosure of these allegations could cause serious harm to the former mayor's reputation," Allard wrote in the May 2015 affidavit.

Earlier this year Robert Tapper, Katz's lawyer told CBC Caspian paid Katz and his other client former Winnipeg CAO Phil Sheegl $327,000 as part of a real-estate deal the two made with Babakhanians in May or June 2011.

"I mean the reality is the allegation that's being made here is vastly more serious than they breached some ethical rules. They're saying they took a bribe. That's offensive and wrong," Tapper told CBC in January.

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Crown still reviewing files in fraud case

The documents also give some insight into the scope and volume of the police probe, which according to the head of Manitoba Prosecution Services, is not yet complete.

"It is my understanding that more evidence may be forthcoming from the RCMP," wrote Michele Jules, Manitoba Prosecution Services Executive Director in an October 16, 2017 affidavit.

Jules said a senior crown attorney has been assisting, consulting with, and providing advice to the RCMP in this case. And that the crown's review of the "voluminous" files takes time.

"By way of example, one batch alone was located on a hard drive containing 177 gigabytes of data and just under 203,000 files," wrote Jules.

"It is premature at this state to speculate as to whether Criminal Code charges might be laid, who might be named in those charges, and what those charges might actually be. The evidence needs to be reviewed in its entirety before such discretionary decisions can be made by a prosecutor. As I have explained, that necessary step is still not complete," said the October 2017 affidavit.

Jules said the crown is strongly opposed to any disclosure of evidence in the case. She spoke in generalities and said going into details about investigative techniques that were taken or what steps might remain could compromise the police probe.

"A potential cause for concern is that any discussion about, or disclosure of, the identity of any targets or potential targets of the investigation risks compromising the investigation. This could alert people that they may be targets which could, in turn, potentially lead to them concealing, altering or destroying evidence," Jules wrote.

Caspian opposing disclosure of documents

The documents Canada Post wants to analyze actually belong to Caspian and the Winnipeg Contractor is also opposing the crown corporation's application for disclosure.

• Crown, Caspian don't want documents seized in fraud investigation turned over to Canada Post

In a motion brief filed in court September 14, Caspian said the alleged evidence in the fraud case is based on "opinion and hearsay" and ought to be disregarded or "ignored".

"Not only is there an absence of evidence qualifying Constable Allard to opine, the evidence he gives suggests that he and the RCMP's Commercial Crime Section in Winnipeg are not qualified to opine in respect of substantial construction projects," the Caspian motions brief said.

The brief points to Allard's 2015 affidavit in which he says the RCMP Commercial Crime Section does not have the expertise to investigate construction projects of this magnitude and that the Mounties will be seeking construction professionals with knowledge of the procurement and contract administration of multi million dollar projects to assist them.

"No such professional with the requisite expertise has expressed any opinion concerning change orders or 'invoicing' practices in respect of the Canada Post Mail Processing Plant," the brief said.

The case is being heard in a Manitoba court today.

Calls to Garcea and Babakhanians were not returned.