The RCMP has arrested two Revenue Canada workers in Montreal during raids on six construction-industry offices belonging to a man close to former Montreal executive committee member Frank Zampino.
On Tuesday, RCMP officers and Revenue Canada investigators raided six offices belonging to Simard-Beaudry Construction.
The RCMP has not yet laid charges, but it confirmed that a major operation was underway. Sources said two Revenue Canada officials were arrested at the agency's offices in Montreal and interviewed by Mounties.
"It is specifically linked to the construction industry," a source said. "More people are being investigated."
One of the officials works for Revenue Canada's black-market branch and the other works on tax-avoidance probes. Revenue Minister Jean-Pierre Blackburn will address the arrests later Wednesday at a news conference in Montreal.
The matter started as a Revenue Canada investigation into construction companies, but the RCMP was called in to conduct a criminal probe when new information and allegations of internal wrongdoing surfaced.
The arrests and raids will likely fuel calls for a public inquiry into the construction industry in Quebec. Last week, the Quebec provincial police raided 18 companies in connection with allegations of tax fraud and money laundering.
Zampino connection
The president of the construction firm that was raided on Tuesday is Tony Accurso, one of the biggest players in Quebec's construction industry. Accurso has been under fire for his close ties to major union officials and municipal politicians, a number of whom have vacationed on his luxury yacht.
In 2007 and 2008, Zampino went on trips to the Caribbean with Mr. Accurso. At the time, Zampino was chairman of the city's executive committee, and was involved in the awarding of a $355-million water-meter contract, which went to a consortium that included Simard-Beaudry Construction.
Zampino, who said he paid all expenses for his yacht trips, left municipal politics last year to become vice-president of Dessau Inc., an engineering firm that is also a partner in the water-meter consortium.
Montreal Mayor Gerald Tremblay called on the city's auditor-general to look into the contract after criticizing Zampino's decision to go on the yacht with Accurso.
"I wouldn't have gone, because it can create impressions, perceptions or an appearance of a conflict of interest," Tremblay said last week.