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Top Montreal executives face charges in real-estate corruption probe

Top Montreal executives face charges in real-estate corruption probe

Frank Zampino was close to Mayor G&#233;rald Tremblay in 2005, when this shot was taken, but his ties to the Faubourg Contrecoeur project led to his arrest on a range of criminal charges early Thursday, May 17, 2012.

Frank Zampino was close to Mayor Gérald Tremblay in 2005, when this shot was taken, but his ties to the Faubourg Contrecoeur project led to his arrest on a range of criminal charges early Thursday, May 17, 2012.

Photograph by: Marie-France Coallier , Gazette files

MONTREAL — Frank Zampino, former right-hand man to Montreal Mayor Gerald Tremblay, was "the ringleader" in a bid-rigging scheme that defrauded Montreal taxpayers of approximately $1 million, investigators with Quebec's permanent anti-corruption squad alleged Thursday.

Zampino, the former head of Montreal's executive committee, stands accused of fraud, conspiracy, breach of trust and being a party to an offence for his purported role in the scheme, which pertained to a construction project in the city's east end.

He is alleged to have enlisted the help of Martial Fillion, former director of the city's real estate agency, and Bernard Trepanier, former top fundraiser for Tremblay's Union Montreal municipal party, to funnel confidential information about a municipal land development contract to Montreal-based firm Construction Frank Catania et Associes.

"(Zampino) used his influence to ensure that this information was transmitted to Frank Catania et Associes, and, to a certain extent . . . to ensure that certain actions were taken," Insp. Denis Morin, head of the Quebec provincial police's Hammer Squad, told a news conference Thursday.

The information allegedly allowed Catania to place the winning bid for the project. The contract was awarded in March 2007, and Catania purchased the 38-hectare lot from the municipal real estate agency — the Societe d'habitation et de developpement de Montreal (SHDM) — with the intention of erecting a housing development.

It was later revealed that the company obtained the land for a fraction of its value. The $300-million project was eventually scrapped and Fillion fired from his position as head of the real estate agency.

In exchange for insider information about the contract, police say, Fillion, Trepanier and Zampino received unspecified "rewards or advantages" from the Catania firm. At least one of those advantages was a vacation or trip of some kind for Zampino, investigators say. There may also have been money funnelled into the coffers of "a political party," but Morin would not specify how much money or which party.

A total of nine people were rounded up Wednesday and Thursday. Zampino was approached by reporters as he was loaded into a police car just after 6 a.m., but had no comment.

Construction magnate Paolo Catania, head of the Catania construction firm, was arrested at the airport as he attempted to leave the country late Wednesday. He, too, offered no comment as he left police headquarters Thursday morning.

Catania's offices in Brossard were searched two weeks ago by agents from Revenue Quebec and the province's permanent anti-corruption unit. Investigators have confirmed that those searches were linked to this investigation.

At Thursday morning's news conference, anti-corruption unit director Gilles Martin said he was "very happy with the work that was done" in the investigation.

"This is another major step forward in the fight against corruption," Martin said.

The nine arrests represent the culmination of 2 1/2 years of work, he said, adding that the probe started with a single tip that led to meetings with more than 120 witnesses and the seizure of an enormous amount of computerized data.

Some evidence was destroyed before investigators could get their hands on it, Morin explained. Because of that, and because of the sheer amount of data that needed to be examined, it took a long time for the investigation to reach this stage, he said, and it still isn't complete.

Police believe the scheme defrauded taxpayers of approximately $1 million. Back in 2008, however, there were allegations that Catania paid just $4.4 million even though the land had been evaluated at $31 million — resulting in an estimated loss of more than $26 million for the city.

Morin said police are basing their much lower estimate of $1 million "on the evidence we obtained."

Officials in the current city administration co-operated fully with the investigation, he added. Tremblay confirmed on Thursday that he was interviewed several times by anti-corruption unit.

The nine people arrested have been charged with a variety of offences, including fraud, breach of trust, conspiracy and fraud against government. All were expected to be released Friday on conditions.




Read more: http://www.montrealgazette.com/news/Montreal+executives+face+charges+real+estate+corruption+probe/6639950/story.html#ixzz1vY6ZWfdu