Former Winnipeg CAO argued he should only be on the hook for half of $327K bribe if he loses appeal

Winnipeg's former chiefadministrative officer tried to argue notall of the money a judge ruled he owes the city for damages belongs to him.

That's because some of the money involved in the disputeactually went to the city's former mayor.

But the Manitoba judge nonetheless ordered former CAO PhilSheegl to pay all the money back.

In March, Court of Queen's Bench Chief Justice Glenn Joyal found Sheegl breached his duty as a senior city official when he accepted a bribe from the contractor hired by the city to build the Winnipeg Police Service headquarters.

The$327,200 payment to Sheegl from contractor Armik Babakhanians of Caspian Construction constituted acivil bribe, Joyal ruled.

"Any portion of that tainted money paid toSheeglcannot be permitted to remain withSheegl," he wrotein a decision issued in March.

In a subsequentdecision last month, Joyal ruled the amountshould be treated as damages for breach of trust, andis now payable to the city.

Sheegl's lawyer Robert Tapper saidhis client plans to appeal that ruling.

That appeal has not yet been filed, but a late Marchcourt filing from Sheeglin reply to Joyal's decisionstateshalf of the money he got "waspaid to a person other than Sheegl."

Though that filing does not name that person, previous court documents have said thatthe moneySheeglwas paid byBabakhanianswas split with Katz.

Katz was not a defendant in the lawsuit, and there isno reference to Katz owing money to the city in Joyal's decision.

In a judgment dated May 4, Joyalordered Sheegl to pay the full amount as part of$1.1 million package of payments to the city.

Joyal ordered Sheegl to pay the city $200,000 in Canadian funds, plus nearly $32,000 in interest for part of the $327,000 worth ofdamages.

He was also ordered to pay $127,200 in U.S. funds, plus just over $18,000 in interest for the rest of the damages.

In addition, Joyalordered Sheegl to return his$250,000 severance payment to the city, plus nearly $32,000 in interest, along with $100,000 in punitive damages and almost $333,000 worth of costs incurred by the city while it pursued the court case.

In January 2020, the city filed a lawsuit against Sheegl, Babakhanians,Caspian Construction and numerous others who worked on the police headquarters project. The city claimed they conspired to defraud it of millions of dollars in the construction of the downtown building.

Sheegl maintained the money is part of a real-estate deal he and Katz didwith Babakhanians in Arizona. He claims in 2011,Babakhanians purchased an interest in land he and Katz owned with other investors.

A handwritten note outlinedthe real estate transaction. But the court heard the only otherdocumentation to demonstrate it took place was what the city, in its court filings,described as a self-serving email dated January2017 in whichSheegl described the Arizona landto his counsel.

Sheegl's March reply to the judgmentsaidthere are two problems with the court's ruling that he owes $327,200to the city.

Babakhaniansmaintains he has an interest in the Arizona land, and if the Caspian owner comes after Sheegl for the money, it will need to be paid, according to Sheegl'srecently filed court document.

"Sheegl must pay [Babakhanians]out without the benefit of the funds paid for the interest [in the land]," the document stated.

Sheegl saidthe second problem is the money was paid in U.S. dollars, at a time when the dollar rate was essentially the same as the Canadian dollar.

"And thus it is respectfully submitted, should the ruling be upheld, that that sum be paid in Canadian funds," said the March 28 court filing.

Joyal'sApril decision on the payment of damages indicates he disagreedwith that argument.

"The City is correct in maintaining that there is no reason why the Sheegl defendants should receive any advantage in respect to current currency calculations of the value of funds or exchange rates," Joyal wrote.

Katz did not immediately respond to a request for comment.

Former Winnipeg CAO argued he should only be on the hook for half of $327K bribe if he loses appeal

2 years ago

Duration 1:08

Former City of Winnipeg Chief Administrative Officer Phil Sheegl says he plans to appeal the court ruling that orders him to pay back what is described as a bribe. A new court document also says Sheegl has only half the money he's been told he has to pay back to the city.