Crown sets out charges of fraud against Meng

Bid to deny bail to exec over fears she’s a flight risk

National Post (National Edition) - - NEWS - Keith Fraser

VAN­COU­VER • Meng Wanzhou, the chief fi­nan­cial of­fi­cer of Huawei Tech­nolo­gies and the daugh­ter of the Chi­nese tech gi­ant’s founder, was ar­rested at the Van­cou­ver air­port on Dec. 1 at the re­quest of the United States. Un­til Fri­day, the rea­son was shrouded in mys­tery.

With Meng, 46, dressed in green sweat­pants and sit­ting in­side a glass box at B.C. Supreme Court, fed­eral Crown prose­cu­tor John Gibb-Cars­ley told her bail hear­ing on Fri­day that she is al­leged to have com­mit­ted mul­ti­ple acts of fraud by par­tic­i­pat­ing in a scheme to trick fi­nan­cial in­sti­tu­tions into mak­ing trans­ac­tions that vi­o­lated U.S. sanc­tions against Iran.

Gibb-Cars­ley urged Jus­tice Wil­liam Ehrcke to deny bail to Meng. who has no mean­ing­ful con­nec­tions to Canada and is a se­ri­ous flight risk. News of her ar­rest shook world stock mar­kets.

“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.”

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.,” the prose­cu­tor said in a court­room packed with in­ter­na­tional me­dia and mem­bers of the Chi­nese-Cana­dian com­mu­nity. Out­side the court­room six TV screens had been set up to ac­com­mo­date the over­flow crowd.

Meng was ar­rested Dec. 1 at Van­cou­ver In­ter­na­tional Air­port af­ter ar­riv­ing from Hong Kong on her way to Mex­ico.

Cana­dian of­fi­cials, based on 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 a Huawei sub­sidiary named Sky­com to do busi­ness in Iran with an Ira­nian telecom­mu­ni­ca­tions com­pany, in vi­o­la­tion of U.S. sanc­tions against trade with Iran.

When a Reuters wire agency story was pub­lished in 2013 de­scrib­ing how Huawei con­trolled Sky­com and that Sky­com had at­tempted to send U.S.-man­u­fac­tured com­puter equip­ment into 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.

The ac­tions of Meng put the banks in­volved at se­ri­ous fi­nan­cial risk, he said.

“Sky­com was Huawei. This is the al­leged fraud,” said Gibb-Cars­ley. “Sky­com em­ploy­ees were Huawei em­ploy­ees.”

None of the al­le­ga­tions have been proven in court.

Gibb-Cars­ley told the judge that while Meng va­ca­tions in Van­cou­ver and has two “very ex­pen­sive” homes in Van­cou­ver, there’s no real 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 put up for bail.

Meng would not breach bail be­cause to do so would hu­mil­i­ate her fa­ther whom she loves, said Martin. Her fa­ther, Ren Zhengfei, is a for­mer Chi­nese army in­tel­li­gence of­fi­cer. His Huawei is the most pres­ti­gious tech com­pany in China. “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.”

He said one of the glar­ing de­fi­cien­cies in the al­le­ga­tions is that the sum­mary of the case doesn’t dif­fer­en­ti­ate be­tween time pe­ri­ods. Martin said at the meet­ing Meng had with a bank that was re­ferred to in a story by Reuters, she ex­plained Huawei owned Sky­com for a pe­riod of time but it sold the com­pany in 2009. Martin told the court the Pow­erpoint pre­sen­ta­tion his client de­liv­ered to the bank is sup­posed to be ev­i­dence of fraud, but that claim is “pre­pos­ter­ous.”

Huawei sold Sky­com be­fore the sanc­tions be­came law in the United States un­der pres­i­dent Barack Obama in 2010, he said.

The de­fence lawyer em­pha­sized that the com­pany’s mis­sion was to com­ply with ap­pli­ca­ble ex­port laws and reg­u­la­tions.

Huawei is the big­gest global sup­plier of net­work gear used by phone and in­ter­net com­pa­nies, and has been the tar­get of deep­en­ing U.S. se­cu­rity con­cerns. The United States — which sees Huawei and smaller Chi­nese tech sup­pli­ers as pos­si­ble fronts for Chi­nese spy­ing and as com­mer­cial com­peti­tors — has pres­sured Euro­pean coun­tries and other al­lies to limit the use of its tech­nol­ogy.

The hear­ing con­tin­ues on Mon­day.

SHE HAS MEANS TO FLEE AND TO RE­MAIN OUT­SIDE CANADA.

JEFF VINNICK / GETTY IM­AGES

Peo­ple wait in line to at­tend the bail hear­ing of Huawei Tech­nolo­gies chief fi­nan­cial of­fi­cer Meng Wanzhou in Van­cou­ver on Fri­day. Wanzhou was de­tained by border of­fi­cials while chang­ing flights en route to Mex­ico.

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