City of Winnipeg drops lawsuit against Abesco Ltd. and owner Wally Fast
The city of Winnipeg has dropped its lawsuit against one of the subcontractors it accused of defrauding taxpayers.
On January 19, a notice of discontinuance was filed in the Manitoba Court of King’s Bench. It states that the City of Abesco Ltd. and its owner Wally Fast, but does not say why.
The city is suing dozens of individuals and companies it alleges defrauded taxpayers in building the Winnipeg Police Service headquarters. The lawsuit was filed in January 2020, a month after a five-year RCMP investigation ended without charges.
The city alleged in a May 4, 2022 application notice that Abesco filed bills for unrelated work on a Winnipeg church, a Winnipeg transit garage, and a police dog station. The case against Abesco has now been dropped.
Abesco was added to the list of defendants in the May lawsuit, among others, including John Garcea, his wife Mabel and five affiliated companies, Pietro Giannuzzi Sr. and 6820540 Manitoba Ltd.
The city alleged in court filings at the time that subcontractor Garcea, his wife Mabel, and five of their companies defrauded the city by inflating bills, bills for work not completed, and bills for work unrelated to police headquarters.
In a defense statement filed Jan. 6, Garcea Group denies that its companies Strada Construction Ltd., S&J Construction Ltd., Color Design Decorating Inc., Granite Concrete Services and Tuscany Construction Ltd. used as tools to “commit fraud”. against the city.
“The Garcea Group denies that it designed, orchestrated, implemented, had knowledge of, participated in, or had any involvement with the scheme as claimed or at all, and urges the city to provide rigorous proof thereof.” , the defense statement said.
The Garcea Group says S&J and Granite “performed nominal work on the project…for which they were fairly paid.”
They also say that Strada was not involved in the police headquarters construction project.
“Strada received payment from general contractor Caspian and promptly returned all monies to Caspian and otherwise received no payment for this project,” the defense brief reads.
Color Design, Tuscany, S&J and Granite were Caspian’s subcontractors and owed duties to Caspian, not the city, it said. Strada, John and Mabel were not parties to the agreements and cannot be held liable in this action, it said.
“The Garcea Group has at all times acted honestly, diligently and in good faith that it has been honest and open about its contractual performance,” the defense reads. “She carried out all the work required of her in a good and professional manner and for the sums agreed in the agreements with the general contractor Caspian.”
It further states that Color Design was not paid in full for the water damage restoration and still owes $100,000.
“The Garcea Group declares that it has not prepared, provided or submitted any altered, fraudulent and/or inflated offers and/or invoices,” the defense reads.
The Garcea Group has filed a counterclaim against Caspian Projects, its owner Armik Babakhanians, his son Shaun, his wife Jenik, office manager Pamela Anderson and Paul R. LaMontagne, who was an employee of Caspian at the time, and their affiliates.
“The Garcea group states that if the city suffered any loss or damage as alleged, or at all … such loss or damage was caused or contributed to by the Caspian defendants,” the counter-indictment reads.
Company numbered 6820540 Manitoba Ltd., owned by Peter Giannuzzi Jr. and incorporated for tax planning purposes, filed a defense and counterclaim stating that the Company’s “sole interest in Caspian Projects was the payment of the monies due and owing.” to be obtained from Giannuzzi Jr. according to the employment contract.”
The employment contract dates from Giannuzzi Jr.’s tenure as an employee of Caspian Projects beginning in 2009.
“Starting around 2012, Giannuzzi Jr.’s employment relationship deteriorated as a result of Caspian Projects’ toxic work environment, coupled with Caspian Projects’ failure to deliver on promises related to salary payments, project profits and ownership interests. This culminated in November 2013 with the departure of Giannuzzi Jr.”, the defense brief reads.
Caspian and Giannuzzi Jr. settled how much he was owed for his work, resulting in a $1 million settlement paid to the numbered company in two installments, with the first payment in January 2014 followed, followed by the second in April 2015.
In a May 4, 2022 application notice, the city alleges that 6820540 Manitoba Ltd. was an alter ego of Giannuzzi and was “used as a tool…to commit a scam against the city” for Giannuzzi Jr.’s personal gain.
The numbered company denies that it “conspired, colluded, or otherwise collaborated with any party to defraud or harm the city,” court documents said.
“It has neither benefited from nor been enriched by the alleged ‘scheme’.”
The defense statement said that during Giannuzzi Jr.’s tenure at Caspian, “unilaterally imposed” changes to the project by the City and Police Department of Winnipeg contributed to cost increases.
City project managers and Winnipeg Police Department officials were “disorganized and confused” about their respective roles in the building’s construction, the filing says.
The numbered company says “the city is making such allegations in reckless disregard for their truth” and that the allegations are “so serious and baseless” that they merit recognition of attorneys’ fees.
The numbered company’s counterclaim states that if the city suffered losses, they were caused by the other defendants in the case, with the exception of Giannuzzi Jr.
Two other defendants, Peter Giannuzzi Sr. and G&G Interiors, filed a joint defense statement, saying the company only issued genuine bids and invoices for work done at police headquarters.
The city says it only found out about G&G’s involvement in April 2021, when it found Caspian had billed the city $8 million for work it said G&G was doing at the police headquarters were done, “while [Caspian’s] known payments to G&G totaled less than $6 million,” according to the May 4 filing notice.
G&G “was not paid any excess or excess over the amount billed,” said the defense brief, filed Jan. 6, which also calls for the lawsuit against G&G to be dismissed.