US charges against Meng Wanzhou turn fraud law 'on its head', her lawyer says in final week of extradition case

The US case against Huawei Technologies executive Meng Wanzhou "turned fraud law on its head", failing to show that she lied to HSBC, thought the bank was being put at financial risk by her statements, or had caused any actual deprivation, her lawyer argued on Monday as the final week of hearings in her extradition fight began in a Canadian court.

US prosecutors want Meng to face trial in New York for allegedly defrauding HSBC by lying in a 2013 PowerPoint presentation she made about Huawei's business in Iran, conducted via an affiliate called Skycom.

This allegedly induced HSBC to route Iran-related payments from Skycom to a British firm called Networkers through the bank's US subsidiary, thus putting the bank at risk of breaching American sanctions on Tehran.

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But Mark Sandler, a lawyer for Meng, told Associate Chief Justice Heather Holmes in the Supreme Court of British Columbia that it was "crystal clear" from Meng's presentation that Huawei and Skycom were working together in Iran, and HSBC still chose to route the Networkers payments this way.

Meng Wanzhou arriving at the Supreme Court of British Columbia for her extradition hearing in Vancouver on Monday. Photo: Reuters alt=Meng Wanzhou arriving at the Supreme Court of British Columbia for her extradition hearing in Vancouver on Monday. Photo: Reuters

"Nothing Ms Meng said induced HSBC to violate US sanctions laws," Sandler contended to the committal hearing, and even if the bank was at risk, this was "its own doing".

He called the US pursuit of Meng an "extraordinary case" in which "the causal link is broken" between her actions and any impact on HSBC; this was "the Achilles heel" of the case, Sandler said.

Meng's alleged deception is claimed to have caused HSBC "deprivation" by putting it at risk of sanctions prosecution, but the bank is not said to have suffered any actual financial loss.

This was an "unprecedented" theory, Meng's lawyers wrote in a submission, calling it "factually and legally untenable".

Meng, Huawei's chief financial officer and a daughter of company founder Ren Zhengfei, was arrested on December 1, 2018, at Vancouver International Airport, triggering an extradition battle that has infuriated Beijing and sent China's relations with Canada and the US into crisis.

The committal hearings in Vancouver are the final courtroom process in the extradition case before Holmes decides whether to release Meng, who has been on partial house arrest at one of her Vancouver homes, or recommend to Canada's Justice Minister David Lametti that she be sent to face trial in New York.

The final decision on whether to surrender Meng to US authorities will rest with the minister.

Experts say that appeals are likely regardless of what Holmes decides, potentially dragging out the extradition process for years.

In the committal stage, which began last week and is scheduled to end on Friday, the Canadian government lawyers who are representing US interests in the case must establish a prima facie case of fraud, not that Meng is guilty: that is, the accusations must be capable of supporting prosecution in Canada had the conduct been committed there.

Government lawyer Robert Frater said last week that Meng's dishonesty in her presentation to HSBC was "abundantly clear".

"The evidence demonstrates that Ms Meng deliberately made dishonest representations to HSBC in an attempt to preserve Huawei's relationship with the bank, knowing that, by acting in reliance on her misrepresentations, HSBC's pecuniary interests would be put at risk," the government side said in a submission.

But Sandler scorned the proposition that HSBC had been a victim of Meng, by virtue of the bank breaching US sanctions itself, and thus facing legal peril.

"There has never, ever been [a] fraud case in Canadian jurisprudence in which, in the absence of actual loss, and the risk of actual pecuniary loss, [there was] the possibility that the government will go after the victim for liability," he said.

Meng's written submission said: "Ms Meng's representations were not inaccurate; but, in any event, HSBC knew what it needed to know in order to protect its own interests.

"The record discloses nothing that could amount to a fraud in Canadian law. Ms Meng cannot be extradited to face trial on evidence and allegations that would not justify a trial in Canada. She must be discharged."

The committal hearings have coincided with an escalation of diplomatic tensions between Beijing and Ottawa. In the days immediately after Meng's detention, two Canadians - Michael Spavor and Michael Kovrig - were arrested in China, and this year they were tried for espionage.

Last Wednesday, the day Meng's committal process began, a Chinese court announced that Spavor had been convicted and sentenced to 11 years' imprisonment. No verdict has been announced in Kovrig's case.

Canadian Prime Minister Justin Trudeau - who has describe Kovrig and Spavor as victims of hostage diplomacy - decried the Spavor ruling as "absolutely unacceptable and unjust".

China's foreign ministry responded to Trudeau by calling Canada "arrogant" and "ridiculous".

This article originally appeared on the South China Morning Post (SCMP).

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