Defence claims no proof Meng Wanzhou is tied to any loss suffered by bank
A lawyer for Meng Wanzhou says the Crown has failed to
establish a link between the Huawei executive's actions and any loss
purportedly suffered by HSBC.
Mark Sandler took aim at the heart of the case for
extradition to the U.S. Monday, claiming prosecutors lack evidence they need to
try Meng for fraud: loss or threat of loss to a victim and a connection between
that loss and the accused.
In legal documents and submissions filed in the high-profile
B.C. Supreme Court case, it's referred to as a "causal link" — or
"causation."
"You cannot commit Ms. Meng [for extradition] absent
evidence that she made representations that were relied upon by HSBC to its
detriment," Sandler told Associate Chief Justice Heather Holmes.
"Causation is the Achilles' heel in the requesting
state's case."
Final week of legal proceedings
The high-profile extradition proceeding entered what is
scheduled to be its last week of court time Monday, more than two-and-a-half
years after Meng first appeared in the same Vancouver courthouse in the days
after her arrest.
The 49-year-old is Huawei's chief financial officer and the
daughter of the company's billionaire founder, Ren Zhengfei.
She is charged with fraud and conspiracy in New York in
relation to allegations she lied to an HSBC executive in Hong Kong in August
2013 about Huawei's control of a subsidiary accused of violating U.S. economic
sanctions against Iran.
Prosecutors claim Meng gave a Powerpoint presentation which
described the relationship between Huawei and the other company as a
"controllable" business partnership, obscuring the fact that they
were one and the same entity.
HSBC allegedly relied on Meng's statements in deciding to
continue handling Huawei's finances, placing the bank at risk of both civil and
criminal liability for moving money tainted by sanctions violations through the
U.S. banking system.
Final arguments on the extradition request began last week
with the Crown describing the allegations against Meng as a routine fraud case
involving dishonesty in commercial dealings.
Robert Frater, the Justice Department's top lawyer, said the
only thing that sets the proceedings apart is the context of foreign sanctions.
Sandler told Holmes HSBC hasn't suffered any loss and was
never at risk of prosecution.
He said the transactions which would have allegedly drawn
the scrutiny of financial regulators involved payments Skycom made to a third
party that HSBC then cleared through the U.S. system.
Sandler said there's no evidence Meng was aware of those
payments and no evidence she knew her alleged misrepresentations would have any
influence on them.
In making his point, he cited a 1973 case in which a woman
was acquitted of defrauding Eaton's by lying on a credit card application
because the department store "did not actually rely on the application
form in determining whether to extend credit."
The name of the defendant in that case was Winning; Sandler
said "it was a winning case in a variety of ways, in my submission."
"Fraud cases in Canada aren't just about dishonesty in
commercial dealings," Sandler said.
"You don't convict people for fraud unless the
dishonesty is also manifested because a victim acted upon it to its
detriment."
The Crown contends that the risk of loss to HSBC should be
enough to establish a fraud charge — whether the bank lost money or not.
In answer to that argument, the defence has obtained an
affidavit from John Bellinger, a former senior associate counsel to the George
W. Bush White House.
"After an extensive review of U.S. sanctions
enforcement actions, Bellinger could not find a single case in which the U.S.
government had 'imposed civil or criminal liability on a bank or other party
for engaging in prohibited transactions as a result of having been
intentionally deceived by a third party,'" the defence says in its written
submissions.
In deciding whether to extradite, Holmes has to determine if
there would be enough evidence to send Meng to trial for fraud in Canada if her
alleged offences had occurred in this country.
Sandler told the judge both the Crown and the defence have
pored over Canadian fraud cases looking for similar fact patterns.
He said it "would turn fraud law on its head" to
accept the prosecution's theory of the case.
"There has never been a fraud case in Canadian
jurisprudence in which in the absence of actual loss and in the absence of risk
of actual pecuniary loss, the possibility that the government will go after the
victim for liability has supported a fraud prosecution," he said.
"Never happened."
The defence is expected to continue its submissions Tuesday.
The proceeding is scheduled to wrap by Aug. 20 after which
Holmes is likely to reserve her decision.
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