Meng Wanzhou’s ‘lies’ to HSBC are a clear case of fraud, Canadian lawyer tells extradition hearing

Ian Young

A Canadian government lawyer has firmly rejected claims by Huawei Technologies executive Meng Wanzhou that she should be freed at her extradition hearing in Vancouver, saying that her alleged lies to HSBC about the tech firm’s business in Iran amount to a clear case of fraud.

“Ours is not a complex theory … lying to a bank in order to get economic services is fraud,” said Robert Frater, adding that Meng’s case thus passed the test of “double criminality” required to send her to the US to face trial.

Frater, whose team of government lawyers is representing US interests in the case, told Justice Heather Holmes: “Your job is not as my friends [on Meng’s side] suggested, to stand up for Canadian sovereignty … those concerns are for the executive.”

Free Meng Wanzhou and send $$$ for nudez: Vancouver’s unlikely anti-extradition activists

Meng, whose extradition case formally began in the British Columbia Supreme Court on Monday, more than 13 months after her arrest at Vancouver’s international airport, is accused of defrauding HSBC by lying in a meeting with a bank official about Huawei’s business in Iran.

That is said to have put HSBC’s economic interests at risk, by putting the bank in breach of US sanctions on Iran, and in peril of US fines, prosecution and reputational damage.

But Canada does not have banking sanctions on Iran, and Meng’s lawyers argued on Monday and Tuesday that her case therefore failed the test of “double criminality” – the requirement that an extraditable person be accused of something that would constitute a crime in Canada as well as the requesting state.

Frater’s team has countered that “the essence of [Meng’s] offending conduct is fraud, not violating sanctions”.

Frater told Holmes that she should not get “knee deep” in the foreign indictment, and instead focus on Canadian law to make sure the test of double criminality was met.

China repeats call to free Huawei’s Meng Wanzhou

Meng’s arrest on December 1, 2018, was a seismic event in China’s relationships with both the US and Canada. It infuriated Beijing, which said that Meng, Huawei’s chief financial officer and the daughter of its founder Ren Zhengfei, was the victim of a political prosecution.

Her case comes amid the continuing US-China trade and tech wars. The US has instigated an intense debate over whether to allow the Chinese telecommunications giant to take part in high-speed 5G internet networks now being developed around the world.

Moreover, in the days following Meng’s detention, China arrested Canadians Michael Spavor and Michael Kovrig and accused them of spying. But the move was widely seen in the West as retaliation for Meng’s treatment.

Meng is living in Vancouver in a C$13.6 million (US$10.4 million) mansion that she owns. She is under the guard of a private security team, and must wear a GPS tracker on her ankle, abide by a curfew and stay away from the airport.

Meng Wanzhou is living in Vancouver in a US$10.4 million mansion that she owns. Photo: AFP

Meng’s meeting with the HSBC banker that is at the heart of the current arguments took place in a Hong Kong teahouse in August 2013. Meng is alleged to have used a PowerPoint presentation to mislead the banker about Huawei’s relationship with the tech firm’s affiliate in Iran, a company called Skycom.

Frater said that Meng had committed “deliberate misrepresentation on any understanding of the facts” at the teahouse meeting.

He said that there was no need for HSBC to suffer actual loss to support a charge of fraud, and that the mere risk of economic prejudice would suffice.

HSBC knew of Huawei’s ties to Iran before Meng arrest, documents show

Frater said HSBC stood at reputational risk as a result of Meng’s alleged lies, were it to become known that it was “the banker of choice for an Iranian business”. He highlighted the fact that in 2013 HSBC was already party to a deferred prosecution agreement that resulted in a massive US$1.9 billion settlement for breaching US sanctions in Iran, Libya and elsewhere.

The risk of prejudice to HSBC’s interests as a result of Meng’s misrepresentations, Frater said, “ends in committal. End of story. I could sit down now.”

Asked by Holmes if he was oversimplifying things, Frater added: “But I’m not going to stop there, don’t worry about it … I’m just getting wound up,” drawing laughter from the gallery.

Frater called other double-criminality arguments by Meng’s team – that to support a charge of fraud in Canada all elements of the fraud must have occurred in Canada – “absurd”.

Were that the case, “Canada would be the destination of choice for telemarketing fraudsters and internet hucksters”, Frater said.

Judge grills Meng’s lawyer over ‘fraud’ on day 2 of extradition hearing

Frater took a little over two hours for his rebuttal, and the hearing was adjourned until Thursday morning for the response by Meng's lawyers.

The double-criminality phase of the hearing could possibly continue into Friday. More court dates are pencilled in until November, but the case could stretch beyond that, with some extradition proceedings lasting years.

Later hearings are expected to consider whether Meng was subjected to an abuse of due process when she was arrested and questioned at the Vancouver airport.

The later hearings will also address accusations the case is politically motivated, with Meng’s lawyers citing comments US President Donald Trump made soon after her detention that he might intervene in her case if it was to the economic advantage of the US.

Sign up now for our 50% early bird offer from SCMP Research: China AI Report. The all new SCMP China AI Report gives you exclusive first-hand insights and analysis into the latest industry developments, and actionable and objective intelligence about China AI that you should be equipped with.

More from South China Morning Post:

This article Meng Wanzhou’s ‘lies’ to HSBC are a clear case of fraud, Canadian lawyer tells extradition hearing first appeared on South China Morning Post

For the latest news from the South China Morning Post download our mobile app. Copyright 2020.