Huawei CFO case straightforward, Crown argues
Canadian prosecutors called for the extradition of Huawei Technologies Co. Chief Financial Officer Meng Wanzhou on Wednesday, describing the U.S. case against her as a straightforward fraud.
“Ours is not a complex theory of this case,” prosecutor Robert Frater told a Vancouver court on the third day of hearings. “Lying to a bank in order to get banking services that creates a risk of economic prejudice is fraud.”
At issue in a legal battle that has severely strained Canada-China relations is whether the U.S. extradition request meets the crucial test of double criminality: Would Meng’s alleged crime have also been a crime in Canada?
The U.S. has charged Meng with bank and wire fraud, accusing her of lying to HSBC Holdings Plc and tricking it into conducting transactions that violated U.S. sanctions on Iran.
Earlier this week, her lawyers argued the case fails to meet the double criminality test because Canada doesn’t have sanctions on Iran -- any transactions by HSBC wouldn’t break any Canadian laws.
While the U.S. has tried to “dress up” its handover request as a case of fraud to make it easier to extradite Meng, in reality it’s a sanctions-violations complaint that seeks to obligate Canada to enforce U.S. trade laws, her lawyers said in a court filing.
Frater disputed that Wednesday: “Fraud, not sanctions violations, is at the heart of this case.”
According to the U.S., HSBC had begun questioning Huawei about its dealings in Iran after the bank came under the scrutiny of U.S. regulators. In late 2012, HSBC entered a deferred prosecution agreement with the U.S. after agreeing to pay $1.92 billion to settle a probe into allegations it laundered funds of sanctioned nations.
Meng’s misrepresentations to an HSBC executive in 2013 induced the London-based lender to continue servicing Huawei, including participating in a $1.5 billion syndicated loan in July 2015, in violation of U.S. sanctions, according to the U.S. extradition request.
“The misrepresentation misled them,” at a time that HSBC was under a deferred prosecution agreement for dealings in Libya and Sudan, Frater told the court. “If someone is making false misrepresentations to you, you are deprived of the chance to assess your business model as you should.”
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Meng, the eldest daughter of billionaire Huawei founder Ren Zhengfei, has become the highest profile target of a broader U.S. effort to contain China and its largest technology company, which Washington sees as a national security threat.
The U.S. charged Meng, who turns 48 next month, with bank and wire fraud which carry a maximum term of 20 years in prison on conviction. If the Canadian judge rules her case doesn’t meet the double criminality test, she could be discharged, according to Canada’s extradition rules.
The double-criminality hearings are scheduled to continue through Thursday. The judge will likely issue a written decision sometime later.