The City of Winnipeg has recovered zero dollars of the millions it was owed following civil litigation against the Winnipeg Police Service’s headquarters contractor and the city’s former chief administrative officer who agreed a bribe from the builder.

The city quietly placed a $28 million mortgage on at least five properties associated with police headquarters contractor Caspian Construction last April.

The move comes a year after the City Council voted to settle with the so-called Caspian defendants over lawsuits alleging fraud, secret kickbacks and construction defects in the acquisition and construction of the downtown headquarters on Graham Avenue.

The city has not received a single cent of the $21.5 million – and growing – settlement it reached with Caspian, company director Armik Babakhanians, his wife and son, and several associated companies .

“We now have secure assets that guarantee the repayment of the amounts owed,” said the advisor. Jeff Browaty, who chairs the city’s finance committee, said Friday.

THE amount due increases over time. Caspian has already missed the first deadline to pay $21.5 million, meaning it owes $22.5 million if it pays by March 2025, $23.5 million if payment is made the following year and $28 million if full payment is not made by March 2026.

Browaty said appraisers had been sent to estimate the value of Caspian’s assets.

“If they were to default,” Browaty said, “some properties would be guaranteed to the city if they didn’t pay.”

According to real estate records, the city has placed a $28 million mortgage on at least five properties associated with the Caspian Sea, including:

• 611 Academy Rd., valued at $4.8 million.
• 621 Academy Rd., valued at $3.5 million.
• 2245 McGillivray Boulevard, valued at $1.8 million.
• 2233 McGillivray Boulevard, valued at $5 million.
• 1225, chemin Plessis, valued at $3.9 million.

Other properties may have been secured by the city, but when asked for a list, city spokesperson David Driedger told CBC News he was unable to share more details.

“The city continues to take steps to ensure that the damages awarded by the court as well as the settlement terms approved by the council are respected,” Driedger wrote in an email.

No payment from Sheegl

Driedger said the city also did not receive payment from former city manager Phil Sheegl.

Sheegl was initially named in the city’s lawsuit against Caspian, but he fought and won the right to have his case heard separately.

He was accused of having received a secret commission.

Chief Justice Glenn Joyal of the Manitoba Court of King’s Bench found that Sheegl accepted a $327,000 bribe from Armik Babakhanians.

It is an “irrebuttable presumption” that the Babakhanians intended to influence Sheegl through this payment, and Sheegl was influenced by this payment and the city suffered damage, Joyal wrote in its decision of March 2022.

Joyal ordered Sheegl and his companies to repay the bribe, his $250,000 severance package from the city, plus court costs, damages, for a total of about $1.1 million dollars.

Lawyers representing the Caspian and Sheegl defendants did not immediately respond to CBC’s requests for comment.