Canada’s Competition Bureau has filed charges against three individuals and four companies in relation to allegations of bid-rigging by renovation contractors who service Toronto-area condominium corporations.
The federal agency announced charges of conspiracy to rig bids, conspiracy to commit fraud, and fraud over $5,000. Condominium renovation budgets can run in the millions of dollars on a single contract and such services run the gamut from carpet replacement to painting to parking garage repairs. The maximum sentences carried by the charges are up to 14 years of imprisonment.
The probe began in 2012 as a result of a whistle-blower complaint, and several search warrants were obtained to examine contracts dating back to 2006, but the charges relate to bids submitted between 2009 and 2014. In 2016, the Competition Bureau obtained a court order to collect records of contracts and bids from 141 Ontario condominium corporations.
“This has been going for seven years so I have no comment. ... The lawyers have 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 charged, as has his company, said he did not believe there was anything to the allegations.
Under the Competition Act, bid-rigging is defined as any agreement or arrangement between two or more parties to co-ordinate when answering a bid or tender from a third entity; the co-ordination can be an agreement on price (so as not to undercut each other, to the detriment of the party seeking services) or an agreement not to bid at all, to reduce the bidder pool.
Vaughan, Ont.-based LAR Condominium Refurbishment Specialists and its owner, Tony Romanin, have both been charged in the probe, but Michael Meneguzzi, principal of LAR, who began work there in 2016, said he was unaware of the charges. “At the moment, I’m going to inquire and look into it 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 company formerly based in Oakville, Ont., has no current listing or website.
None of the allegations have been proved in court.
Audrey Loeb, partner with Shibley Righton LLP, said she helped several condo corporation clients prepare records to hand over to the Competition Bureau in 2016. Ms. Loeb also suggested condo companies that were victims of an alleged fraud may end up looking for restitution through civil action, perhaps even a class-action lawsuit.
“These allegations are consistent with concerns we have raised with condo boards in numerous fraud examination engagements,” said William Stratas, managing director at Eagle Audit Advantage Inc., which specializes in condo fraud examinations. “Directors are untrained volunteers [and are] always at risk of possibly being duped by contractors or property managers on major projects.”
In 2016 and now, the Competition Bureau made clear the targets of the probes were not individual condominium owners but the vendors that 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 agreements with your competitors, we will do everything in our power to uncover the facts and bring the evidence to court,” said Matthew Boswell, Commissioner of Competition, in a statement accompanying news of the charges.