Caspian owner admits he made up invoices, but says city was never over-charged for police HQ project

The owner of a construction company says he did not overcharge the city for the controversial police headquarter construction project. Jeff Keele has more.

Despite as admission he falsified invoices, Caspian Construction’s owner says he never over-billed the city for the Winnipeg police headquarters project and, in fact, he is owed money.

Armik Babakhanians was back on the stand Monday during the Winnipeg police headquarters inquiry’s second phase, called The Money Trail.

Earlier testimony from a forensic accountant estimated excess claims for the work ranged between $45 and $50 million.

Babakhanian’s lawyer George Orle asked him about those estimates.

“Where is that money? I could use it right now,” Babakhanian said.

Babakhanians says he was frustrated the city was constantly demanding invoices for work being done, which he believes he was under no obligation to provide.

Instead, he says he made up amounts based on line items from a document jointly produced by Caspian and the city.

The Caspian owner admitted he falsified invoices, which he said was wrong, but said he did not receive additional money as a result.

“Did you submit these made up invoices to get more money than what the price the city agreed to?” asked Orle.

“No sir,” replied Babakhanians

He testified he was actually shorted $1 million by the city, because they did not give him his final payment for the project.

“Would you ever enter into another contract with the City of Winnipeg under the terms that they put forward in their contract?” asked Orle.

Babakhanians gave an animated response.

“I’m going to say, categorically, hell no.”

Deadline to pay lawsuit settlement arrives

Caspian settled a lawsuit with the city for up to $28 million.

Babakhanian testified he is finalizing a deal with a financial institution to secure the necessary funds.

In an emotional response, he said he decided to settle the suit for commercial and family considerations.

“It just tore our family apart. It just did,” Babakhanians said.

“I could see the pain watching my granddaughters.”

Babakhanians says he has paid more than $5 million in legal fees as a result.

Meanwhile, Monday was deadline day for the lawsuit payment.

If the settlement was paid Monday, the cost would be $23 million. If not, the city will seek a judgment for $28 million.

The controversial construction project has also been the subject of audits and an RCMP investigation that did not result in any criminal charges.

Premier Wab Kinew ordered the inquiry into the project in February 2025. The purpose of the inquiry is to gather information and not assign blame.

Former Winnipeg Mayor Sam Katz and former CAO Phil Sheegl testified in the first phase.

Caspian’s Pamela Anderson and Shaun Babakhanians are both still set to testify in the inquiry’s final phase, which is expected to wrap up this week.