Hotel owner faces legal firestorm over $16 million COVID fund scandal
Sukhminder Rai denies accusations that he orchestrated a “fraudulent scheme” during the hotel’s use as a COVID-19 quarantine facility.

TCS Wire

September 14, 2023

The Westin Calgary Airport hotel is embroiled in a massive scandal, with part-owner Sukhminder Rai and his PHI Hospitality corporation facing a lawsuit alleging the misappropriation of nearly $16 million in federal funds meant for COVID quarantine operations.

Hotel owner faces legal firestorm over $16 million COVID fund scandal

Rai is accused by hotel co-owners of orchestrating a “fraudulent scheme” during their hotel’s use as a COVID-19 quarantine facility from June 2020 to October 2022. 

This comes after Conservative MP Michelle Rempel Garner discovered that Canadian taxpayers spent almost 7 million dollars to quarantine just 15 people at this same hotel.

The co-owners became suspicious when noticing discrepancies between Garner’s discovery of federal spending at their hotel and their own financial records. 

The lawsuit claims that Rai misled them by stating that the government was only paying for 100 of the hotel’s 247 rooms, when, in fact, the government had allocated funds for all rooms.

The alleged misappropriation involves the revenue from these 147 additional rooms, amounting to approximately $15.7 million.

Documents reveal that Rai established a separate bank account under PHI Hospitality a month before the Public Health Agency of Canada (PHAC) began depositing funds for Westin invoices

Only $12.05 million of the total funds deposited, estimated to be between $27.74 million and $29.07 million, reached the hotel for its quarantine contract.

Though unproven in court, financial records that are backed by affidavits allege that the missing funds were either withdrawn as cash, transferred offshore somewhere, or funneled into Rai-affiliated entities. 

Rai strongly denied the allegations. “We intend to defend ourselves in court vigorously,” he told CBC News.

The Westin Calgary Airport hotel is jointly owned, with a 50 percent stake held by the Siksika Calgary Airport Limited Partnership. According to the hotel’s co-owners, Rai didn’t give a satisfactory explanation for the discrepancy between PHAC funds and the hotel’s reported revenue.

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