The Competition Bureau of Canada has filed charges against three individuals and four companies over allegations of bid-rigging by renovation contractors serving Toronto-area condominiums.
The federal agency has announced charges of conspiracy to rig bids, conspiracy to commit fraud and fraud over $ 5,000. Condominium renovation budgets can run into millions of dollars on a single contract and these services run the gamut from carpet replacement to painting to parking garage repairs. The maximum penalties provided by the charges can be up to 14 years’ imprisonment.
The investigation began in 2012 following a whistleblower complaint and several search warrants were obtained to examine contracts dating from 2006, but the charges relate to offers filed between 2009 and 2014. In 2016, the Bureau de la concurrence obtained a tribunal to collect contract and bid records from 141 Ontario condominium corporations.
“This has been going on for seven years, so I have no comment. … The lawyers told me not to talk to anyone, ”said Bob Vlahopoulos, owner of Tri-Can Contract Inc. of Markham, Ont. Mr Vlahopoulos, who has been personally indicted, as has his company, said he did not believe there was anything in the allegations.
Under the Competition Act, bid-rigging is defined as any agreement or arrangement between two or more parties to be coordinated when responding to a bid or offer from a third party; coordination can be an agreement on the price (so as not to compromise each other, to the detriment of the party seeking the services) or an agreement not to bid at all, to reduce the pool of bidders.
LAR condominium renovators in Vaughan, Ont., And its owner, Tony Romanin, were both indicted in the investigation, but Michael Meneguzzi, director of LAR, who began working there in 2016, said he ‘he was unaware of the accusations. “For the moment, I will inquire and investigate the matter further.”
JCO & Associates of Aurora, Ont., And owner Jose De Oliveira were also charged, but could not be reached for comment. A fourth company, CPL Interiors Ltd., has been charged with conspiracy, but the formerly Oakville, Ont., Company does not have an up-to-date list or website.
None of the allegations have been proven in court.
Audrey Loeb, a partner at Shibley Righton LLP, said she helped several clients of condominium companies prepare cases to submit to the Competition Bureau in 2016. Ms. Loeb also suggested that condominium companies affected by a suspected fraud could end up seeking civil restitution. action, maybe even a class action.
“These allegations are consistent with concerns we have raised with condominium boards in the course of numerous fraud review engagements,” said William Stratas, Managing Director of Eagle Audit Advantage Inc., which specializes in in condominium fraud reviews. “The administrators are untrained volunteers [and are] always at the risk of being duped by entrepreneurs or property managers on large-scale projects.
In 2016 and now, the Competition Bureau has made it clear that the targets of the polls are not individual condominium owners, but the vendors who sell their services to them.
“Criminal conspiracies that undermine competitive markets can cause extreme damage to our economy. The message should be loud and clear: If you enter into criminal deals with your competitors, we will do everything in our power to find the facts and bring the evidence to court, ”said Matthew Boswell, Commissioner of Competition, in a press release accompanying the latest charges.