Quarantine hotel co-owner allegedly misused $15.7 million in taxpayer dues during COVID pandemic

Sukhminder Rai supposedly led a 'fraudulent scheme' against the hotel and Health Canada officials. He negotiated taxpayer payment for all 247 rooms but only informed his partners of payment for 100 rooms — a revenue difference of $15.7 million.

Quarantine hotel co-owner allegedly misused $15.7 million in taxpayer dues during COVID pandemic
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The part-owner of a COVID Quarantine hotel in Calgary is in hot water for alleged misappropriation of nearly $16 million in federal funds.

Sukhminder Rai of the Westin Calgary Airport hotel is subject to a lawsuit from the other two owners claiming he and his PHI Hospitality corporation kept money from Health Canada meant to quarantine COVID-positive travellers from June 2020 until October 2022. 

The hotel's co-owners, Satnam Rai and Siksika Calgary Airport Limited Partnership, said they became aware of supposed financial discrepancies as their records did not align with the media's reports.

According to the statement of claim, Rai orchestrated a "fraudulent scheme" against the hotel and Health Canada officials, as first reported by the CBC.

It reads that while he negotiated taxpayer payment for all 247 rooms, he informed his partners that compensation was only given for 100 rooms — a revenue difference of $15.7 million.

According to legal documents obtained by the state broadcaster, Rai opened an RBC bank account under but not affiliated with his corporation just one month before receipt of the invoice funds from Health Canada.

From June 2020 to October 2022, the federal health agency deposited between $27.74 million and $29.07 million to that account. Only $12.05 million supposedly went to the Westin.

In an affidavit, RBC financial records allege Rai funnelled the missing money to several entities, including offshore accounts. 

As of writing, Rai intends to take legal action to combat the claims and maintain his innocence. "We intend to defend ourselves in court vigorously," he wrote in a statement to the CBC

"The allegations of misappropriation in the court documents are completely false." 

Rai claims the suit derives from a "business dispute" over how much money each hotel owner is entitled to and alleges the financial and legal documents "exaggerated" the dollar amounts. 

The plaintiffs are suing the part-owner for at least $18 million for breach of contract, damages from conspiracy to defraud, or restitution of the amount misappropriated.

A judge has granted an application to freeze Rai's assets in the interim.

During the COVID pandemic, the quarantine hotels were the centre of controversy owing to their disregard for civil liberties, high costs and poor tracking measures for deposited funds.

In January, reports emerged that only 15 people stayed at the Westin Calgary Airport hotel in 2022 at $453,000 per person. 

An order paper document released by Conservative MP Michelle Rempel Garner uncovered that Health Canada spent $6.7 million to quarantine Canadians at the facility last year. 

Between June 2020 and October 2022, taxpayer payments totalled $26.8 million to quarantine 1,490 travellers at the Westin.

Rempel Garner called the exuberant spending of taxpayer dues "legitimately flabbergasting" as the mandatory COVID quarantine requirement ended on August 9, 2021. 

Then Health Minister Patty Hajdu ordered the erection of quarantine facilities across 38 hotels in 14 cities as of January 2021.

"Waste of this magnitude […] shows that [Prime Minister Justin] Trudeau doesn't have the capacity or willingness to get things under control," said Rempel Garner.

According to the Quarantine Act, Hajdu could designate any place in Canada to act as a quarantine facility and amend or cancel the designation at her whim

Canadians returning from non-essential travel abroad had to take a test and await results at a designated quarantine hotel until they received a negative result.

Cabinet last October ended the Quarantine Act policy of 72-hour hotel stays for cross-border travellers arriving in Canada without proof of a "suitable place" to quarantine. However, unvaccinated Canadians still had to isolate themselves for 14 days after entering the country.

During the quarantine mandate, these hotels cost taxpayers more than $17,000 for every traveller given shelter for 72 hours, reported Blacklock's Reporter. In June 2021, the Federal Court of Canada ruled it unconstitutional to bill travellers while they quarantined.

"The costs associated with this program included lodging, meals, security, traveller support and transportation," said a Department of Health briefing note Designated Quarantine Facilities

"A total of 22,188 travellers were quarantined or isolated at designated quarantine facilities between March 22, 2020 and September 30, 2022," for $338.7 million, read the June 19 note.

"The costs associated with this program included lodging, meals, security, traveller support, and transportation," said Tammy Jarbeau, spokesperson for Health Canada.

"The Government of Canada has always worked to protect Canadians, adapting our COVID response based on the latest science and evidence."

Upon ending the border measures on October 1, 2022, the Public Health Agency managed 17 quarantine hotels with a total capacity of 1,465 rooms.

"Maintaining these facilities as a contingency was an important part of protecting Canadians," said the briefing note.

Then Transport Minister Omar Alghabra justified the expense, stating, "We did what we felt was necessary to protect the health and safety of Canadians."

"Doesn't that seem excessive?" asked a reporter. He replied: "We did a lot of extraordinary things to protect the health and safety of Canadians, unimaginable things that none of us imagined."

In a subsequent report, Enforcement Of Quarantine And Covid-19 Testing Orders, the Auditor General depicted the program as an expensive failure and reported Blacklock's Reporter.

"This is not a success story," Auditor General Karen Hogan told reporters on December 9, 2021. "I am concerned the Public Health Agency is unable to show us whether or not these border measures are effective."

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  • By Keean Bexte


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