A federal Crown prosecutor says a senior Huawei Technologies executive who was arrested in Vancouver and is being sought for extradition to the U.S. committed multiple acts of fraud against financial institutions and should be denied bail.
John Gibb-Carsley, a lawyer with the federal Justice Department, urged a judge on Friday to deny bail to Meng Wanzhou, the chief financial officer of the Chinese tech giant. The case is to continue on Monday.
Gibb-Carsley told B.C. Supreme Court Justice William Ehrcke that Meng has no meaningful connections to Canada and has vast resources and is a serious flight risk.
“At the starting point, there is an incentive to flee. Ms. Meng is charged with conspiracy to defraud multiple international financial institutions. It is a serious offence, with each offence carrying a maximum of 30 years in prison.”
She was arrested Saturday after an extradition request from the United States while in transit at the city’s airport.Gibb-Carsley said Meng has “significant” financial resources that would enable her to leave the country if she is granted bail and noted that her father, the founder of the company, is worth about $3.2 billion.
“She has the means to flee and to remain outside Canada. Her ordinary home is in a country without an extradition treaty with U.S.,” said the Crown lawyer.
On Dec. 1, Meng was arrested at Vancouver International Airport after arriving from China on her way to Mexico.
Canadian officials, using a provisional arrest warrant that was issued by a New York state judge in August, took her into custody.
Gibb-Carsley said that at the heart of the allegations against Huawei and Meng is that between 2009 and 2014, the company used an unofficial subsidiary named Skycom to transact business in Iran for an Iranian telecommunications company, in violation of U.S. sanctions against trade with Iran.
When a Reuters news agency story was published in 2013 describing how Huawei controlled Skycom and that Skycom had attempted to send U.S.-manufactured computer equipment to Iran in violation of the sanctions, several banks involved in the case asked Huawei whether the allegations were true.
Meng then made misrepresentations to the banks in a form of “damage control” to the news agency’s article, Gibb-Carsley alleged.
Relying on the misrepresentations by Meng and other Huawei representatives, one of the banks and its U.S subsidiary cleared more than $100 million dollars worth of transactions related to Skycom through the U.S. between 2010 and 2014, said Gibb-Carsley.
“Skycom was Huawei. This is the crux of the alleged misrepresentation. This is the alleged fraud,” said Gibb-Carsley. “Skycom employees, it’s alleged, were Huawei employees.”
The actions of Meng put the banks involved at serious financial risk, he said.
Gibb-Carsley told the judge that while Meng vacations in Vancouver and has two “very expensive” homes in Vancouver, there’s no meaningful connection with Canada.
David Martin, a lawyer for Meng, told the judge that the fact that a person has worked hard and has resources should not be grounds to deny bail.
He noted that both Vancouver properties — worth a total of $14 million — would be available to be put up for bail.
Meng would not breach bail because to do so would humiliate her father whom she loves, said Martin. Her father, a former Chinese army intelligence officer, is the founder of Huawei.
“You can trust her,” said Martin.
As for the allegations against Meng, Martin said no evidence of fraud could be made out against his client, calling the Crown’s case a “skeletal” description of liability. He called the U.S. allegations “preposterous.”
The defence lawyer emphasized that the company’s mission was to comply with applicable export laws and regulations.
He said that a PowerPoint presentation used by Meng, which was central to the allegations against her, was produced in 2013, five years ago, and questioned why it’s taken so long for a prosecution to be launched.
Martin noted that Hong Kong Bank, one of the alleged fraud victims, has never filed a lawsuit against the company.
Meng’s links to Canada include her formerly having permanent residence status and her husband and several children having lived in Vancouver at one point, said Martin.
“There is a consistent involvement of this family in life in Vancouver,” he said.
Meng would not flee if she was released from prison, he said.
“She would be an outcast in China if she did. Her father would not recognize her. She would be a pariah.”
Meng appeared in court wearing a dark green tracksuit and sat in the prisoner’s dock beside a Mandarin interpreter. She was seen talking with her lawyer and smiling at a man in the public gallery before the proceedings began.
The bail hearing was packed with reporters, a number of them from outside Canada, as well as a large number of members of the Chinese-Canadian community.
Outside the courtroom six TV screens were set up to accommodate the overflow crowd.
Martin is expected to call several witnesses Monday to describe a program of “community custody” that would be available to Meng if she is granted bail.
He said there would be a number of conditions for any release, including a curfew, the surrender of any passports and surveillance if necessary.
The arrest touched off a firestorm of controversy because of the U.S.-China trade war. The company denied any wrongdoing and the Chinese government said the arrest was a human rights violation and demanded the release of Meng.
Meng is a prominent member of Chinese society as deputy chairwoman of the Huawei board. The company is a privately held juggernaut with projected 2018 sales of more than US$102 billion that has already overtaken Apple in smartphone sales.
On TV and social media, commentators likened her arrest to the hypothetical detention in China of a Mark Zuckerberg sibling or a cousin of Steve Jobs.
Meng’s bio on the company website says she joined in 1993 and held various positions across the company, including director of international accounting and CFO of Huawei Hong Kong. She holds a master’s degree from Huazhong University of Science and Technology.
For a period of time she was in charge of Huawei’s successful internationalization efforts.
Meng’s father, now 74, comes from rural roots, according to the Huawei website. His parents were school teachers and he grew up in the remote mountainous town in Guizhou province.
Huawei says Ren was a standout in the Chinese military’s engineering corps, retiring in 1983 when the unit disbanded.
Meng, who also goes by the first name Sabrina, is one of four deputy chairs listed on the Huawei website and one of three women to sit on the Huawei board.
With files from CP