Crown claims Meng Wanzhou's 'dishonesty' sits at the heart of fraud alleged in extradition request
Judge says she's had 'great difficulty' understanding sanctions violations underpinning extradition
A lawyer for Canada's attorney general drilled down to the nuts and bolts of a U.S. request for Meng Wanzhou's extradition Wednesday, accusing the Huawei executive of "dishonesty" that resulted in a fraud against HSBC.
"And so my lady, at last we come to committal," Robert Frater told B.C. Supreme Court Associate Chief Justice Heather Holmes as he began submissions on the final leg of a process that began more than two-and-a-half years ago with Meng's arrest at Vancouver's airport.
Frater told the judge an extradition proceeding is not a trial; he said the Crown only has to show that prosecutors would have enough evidence to try Meng for fraud in Canada if her alleged wrongdoing had happened here.
"It is now crystal clear that the central goal of the law of fraud in Canada is to prevent dishonesty in commercial deals," Frater told the judge.
"And we say this case is a case about dishonest commercial dealings."
Meng is Huawei's chief financial officer and the daughter of the Chinese telecommunication giant's billionaire founder, Ren Zhengfei.
The 49-year-old is charged in New York with fraud and conspiracy charges related to allegations she lied to an HSBC executive in Hong Kong during a meeting in August 2013 after a series of reports suggesting a Huawei subsidiary had violated U.S. economic sanctions against Iran.
Meng allegedly gave a Powerpoint claiming that her company had cut connections it once had to the subsidiary, Skycom, and that Huawei was in full compliance with U.S. sanctions law.
Prosecutors claim HSBC relied on Meng's misrepresentations in deciding to continue clearing financial transactions for Huawei through the U.S. banking system — putting the bank at risk of loss and criminal prosecution.
Holmes has to make a determination based on three documents filed by U.S. prosecutors detailing the evidence and witnesses they have to back up their allegations.
The documents include an initial record of the case filed in the weeks after Meng's arrest and two supplementary records filed in the time that has followed.
'First message was no risk'
Frater said Meng "falsely tried to distance Huawei from Skycom" because she wanted to keep Huawei's relationship with HSBC intact in the face of the news reports that suggested Huawei might be a risky client.
"The truth was that Huawei was in full control of Skycom — Skycom was Huawei," Frater said.
"The dishonesty in this respect was partly through painting a picture of distance through what Ms. Meng did say and neglecting to disclose the true nature of the relationship by omission."
Frater said Meng had committed "sins of both commission and omission" by describing Skycom as a local business partner and the relationship between them as "controllable."
"First message was 'no risk,'" he said.
"Second, not only do you face no risk from Huawei, but you face no risk from Skycom, because we require Skycom and anyone else we do business with in Iran to comply with American sanctions law."
Lying alone is not proof of fraud, but the Crown claims the evidence shows Meng acted deliberately to fool HSBC.
"These were clearly knowing intentional representations in a meeting set up by Ms. Meng to try and satisfy their banker that they had no risk," Frater said, claiming Meng had the "guilty mind" needed to establish a charge of fraud.
'They acted on it, and that's fraud'
Holmes peppered Frater with questions from the outset of the day's proceedings, echoing questions the defence has raised in the past about the likelihood one woman's Powerpoint would be enough to fool a bank like HSBC.
"[Is it] reasonable to suppose that an international bank with large numbers of people involved in risk committees and so forth would rely on an assurance from one person about compliance by other companies not under Huawei's direct control?" Holmes asked.
Frater said fraud could still be proven if some people at the bank knew the truth about the relationship between Huawei and Skycom.
He said Meng's word carried significant weight.
"When you send the CFO to the banker to try and persuade them that there is no risk, it certainly sends the message because this is the person whose work it is to know they're in compliance," Frater said.
Holmes also admitted that she was having "some difficulty" understanding the U.S explanations of what business did and did not comply with sanctions in Iran.
Frater explained that there was "good business" and "bad business" as far as U.S. sanctions law was concerned, and that it would have been Meng's job to know the difference.
He said the question of whether HSBC should have "cross-examined" Meng on her claims was besides the point.
"Whether HSBC should have believed that, the fact is they did," Frater said.
"They acted on it, and that's fraud."
Frater's submissions are expected to wrap Thursday, and the defence will begin making its arguments on committal Friday.
Meng's lawyers have already filed a lengthy set of submissions with the court in which they say that the Crown has failed to make its case "on every element of the alleged offence."
The defence claims Meng — who has denied the charges against her — was not dishonest and that there is no evidence that she "intended to deceive HSBC."
They also say that prosecutors have failed to prove that HSBC faced any prospect of loss because of Meng's actions.