Canadian Prosecutors: New HSBC Evidence ‘Bolsters’ US Extradition Case Against Huawei Exec
VANCOUVER, British Columbia — In the second day of hearings into an application to introduce a dump of documents handed over by the bank in Hong Kong about HSBC’s knowledge of the company’s relationship with an Iranian subsidiary that may have violated U.S. sanctions, Canadian government lawyers didn’t contest their reliability, but rather their relevance to the extradition case of Huawei CFO Meng Whanzou.
“Relevance, unlike reliability, is a comparatively more
rigorous test,” Robert Frater, a lawyer for the Canadian government acting on
behalf of the United States, told the court.
Meng is accused of lying to an HSBC executive at a 2013
meeting in Hong Kong, where she gave a PowerPoint presentation that described
the subsidiary Skycom as “controllable” by Huawei, a term the judge overseeing
the proceedings acknowledged is “ambiguous.” The new evidence she seeks to
admit includes email chains and internal reports produced by the bank about
perceived risk of continuing to do business with Huawei, which kept more than 100
accounts at HSBC, including accounts it controlled for both Skycom and
Canicula, accounts that were later closed by Huawei.
On Tuesday, Meng’s lawyers argued the new evidence shows the
U.S. case against their client is “manifestly unreliable,” due to widespread
knowledge among HSBC employees that Huawei controlled Skycom, as well as
Canicula, the company that eventually acquired it. Meng’s lawyers attacked the
U.S. records of the case, claiming new evidence shows that certain paragraphs
used against their client were “patently false” and therefore unreliable enough
to deny her extradition to New York to face fraud charges. But the Canadian
government’s team claimed Wednesday that the new evidence shows quite the
opposite.
“In large measure, the evidence presented on this
application simply confirms the requesting state’s evidence that [Meng] failed
to communicate the true nature of the relationship between Huawei and companies
it controlled,” the Attorney General of Canada’s written submission states. “The
proposed evidence is incapable of demonstrating that any part of the various
records of the case are unreliable.”
The misrepresentation of Huawei’s control of Skycom lies at
the heart of the U.S. fraud case against the Chinese telecom executive. She’s
accused of providing false assurances to an HSBC representative, dubbed Witness
B, about whether Huawei had exposed the bank to potential sanctions violations
due to Skycom’s dealings in the sanctioned Islamic republic. That witness,
Frater said, is set to testify that he didn’t know Huawei controlled Skycom
since Meng allegedly distanced the company from Huawei by falsely describing it
as a “third-party business partner.”
“Their evidence cannot refute Witness B’s evidence,” Frater
told the court. “If they want to challenge him on that point, they have to do
it at trial.”
Moreover, Frater said that even if some bank employees knew
of Huawei’s dominance over both Skycom or Canicula, that doesn’t mean fraud
didn’t occur — refuting Meng’s lawyers claims that both senior and junior HSBC
employees knew.
“Fraud exists even if some people knew, that’s what the law
says,” Frater argued. “There’s a distancing of Skycom and Huawei and the idea
that everyone knew is not reflected in the paper they want you to look at.”
This month, Meng had sought to keep the new proposed
evidence under seal, but Associate Chief Justice Heather Holmes denied the
request though her reasons only became public Wednesday morning. Releasing the
proposed new evidence, a dump of documents handed over to Huawei by HSBC in
relation to a Hong Kong court action, was contingent on an agreement to seek to
keep them confidential in Canada, though the deal contemplated that Canadian
law wouldn’t support such a ban.
“Given the high public interest in the case as a whole, the
potential centrality of the documents suggests that banning publication of
their contents would have heavy negative effects on freedom of expression,”
Holmes wrote. “There is a strong interest in the public being informed of the
contents in order to understand the positions of the parties and the reasons
for the court’s decisions.”
Frater argued that accusations by Meng’s lawyers that the
U.S. records of the case contain outright falsehoods, stopping short of calling
them “bald-faced lies,” were unwarranted and contradicted by the very material
they’re seeking to admit.
“Rather than presenting clear and cogent evidence that
refutes the allegations of the requesting state, the HSBC Hong Kong materials
bolsters the allegations in the [records of the case] that [Meng] deceived HSBC
about the true nature of the relationship between Huawei and Skycom,” the
attorney general’s written submission states.
“We are so far down in the weeds of this case that it ought
to give your ladyship pause,” Frater told Holmes before concluding the day’s
submissions. “This is the sort of discussion that ought to be had at trial,
about what inferences could be drawn from who knew what at what time and what
information was shared, that’s why we have trials. That is not the function of
this court.”
But Holmes disagreed.
“I’m not speaking so much about evidence, but rather the
theory of the case as disclosed in the [records of the case] that are frankly a
little difficult to wrestle with on certain points,” Holmes said. “I would
simply invite you to consider that that may be, in part, an explanation for
being as far down in the weeds as we appear to be.”
After a brief exchange, though, Frater told the judge the
case remains simple at its essence.
“There are a variety of issues to canvas on committal, I
don’t deny that, but the heart of the case is pretty easy,” Frater said. “Lying
to your banker to get more credit is fraud.”
Holmes left it up in the air as to when she would rule on
the latest application to admit the new evidence, scheduling a case management
conference for July 9. The home stretch of Meng’s marathon extradition case is
set to begin Aug. 3.
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