The man who oversaw the Westin Calgary Airport hotel's time as a COVID-19 quarantine facility is being sued for allegedly misappropriating nearly $16 million in federal funds.
A new lawsuit claims that part-owner Sukhminder "Sukhi" Rai and his PHI Hospitality corporation kept money from the Public Health Agency of Canada (PHAC) that was supposed to pay for the hotel to house travellers for their mandatory quarantine periods from June 2020 until October 2022.
CBC News has obtained and reviewed hundreds of pages of legal and financial documents related to the lawsuit, filed by two of the hotel owners against the third.
Rai led a "fraudulent scheme" targeting the hotel and PHAC officials, according to the statement of claim, telling the other owners the government was taking over the entire hotel but only paying for 100 rooms — when he had actually negotiated government payment for all 247 rooms.
It's alleged he misappropriated the revenue difference of those 147 rooms: at least $15.7 million.
Documents show Rai, a B.C. resident, set up a bank account under PHI Hospitality one month before PHAC began depositing Westin invoice funds there. That account was not affiliated with PHI's operation of the Westin.
The federal health agency transferred a total of between $27.74 million and $29.07 million over more than two years to that account, according to deposit records.
Affidavits attest that only $12.05 million was ever paid to the hotel for the quarantine facility contract.
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