Meng Wanzhou's extradition lawyers call US fraud case implausible, unprecedented, fatally flawed
Lawyers for the Huawei Technologies executive Meng Wanzhou
called the US fraud case against her implausible, unprecedented and fatally
flawed, as they argued in the final stage of her extradition hearing on Friday
that she must be released.
The US accusation - that Meng defrauded HSBC by lying about
Huawei's business dealings in Iran and thus put the bank at risk of breaching
American sanctions on Tehran - "displays legal and factual defects rarely
seen in fraud prosecutions, at least at the committal stage", her lawyers
told the Supreme Court of British Columbia in a submission.
Meng lawyer Eric Gottardi told Associate Chief Justice
Heather Holmes that the US case was based on "vague and shifting theories
of risk and causation".
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Most fraud cases involve a victim being cheated out of their
money, Gottardi said, but in Meng's case, "the theory of economic loss by
HSBC is wholly illusory [and] fatally flawed".
The extradition battle, which began when Meng was arrested
at Vancouver International Airport on December 1, 2018, is reaching a climax as
the diplomatic furore surrounding the case escalates. China was infuriated by
Meng's arrest, and her treatment has sent Beijing's relations with Ottawa and
Washington into crisis.
"No deception. No loss. Not even a plausible theory of
risk. And no causal connection between the impugned representations and the
deprivation said to have befallen the putative victim," Meng's lawyers
said in a written submission to the committal hearing, which is the last
courtroom process before Holmes decides whether to release Meng or recommend to
Canada's Justice Minister David Lametti that she be extradited.
The final decision on whether to surrender Meng to US
authorities to face trial in New York will rest with the minister alone.
Meng, who is Huawei's chief financial officer and a daughter
of company founder Ren Zhengfei, is alleged to have lied to a HSBC banker in a
2013 PowerPoint presentation that was intended to allay concerns about Huawei's
business in Iran, which was conducted via an affiliate called Skycom.
Committal requires that a prima facie case of fraud is
established: that is, the accusations must be capable of supporting prosecution
in Canada had the conduct been committed there.
Robert Frater, a Canadian Department of Justice lawyer
representing US interests in the case, said on Wednesday that a prima facie
case had been established, and that Meng's dishonesty to HSBC was
"abundantly clear".
But the submission by Meng's lawyers argued that "no
reasonable trier of fact could find that HSBC was actually misled about
Huawei's control of Skycom when the very presentation the Requesting State
relies on described Skycom as 'controllable' by Huawei".
"And no reasonable trier of fact could find that HSBC,
by relying on Ms Meng's representations, risked sanctions violations because on
all versions of the facts, HSBC already knew that Skycom did business in
Iran," it added.
The submission called the supposed risk HSBC faced - that
the bank might be charged with violating US sanctions for clearing Skycom
payments through the US - "entirely unmoored" from the presentation
Meng made in a Hong Kong teahouse.
"The requesting state's theory of liability is
unprecedented in Canadian law," the submission concluded, as it called for
Meng's discharge.
"In no prior case has an individual been found guilty
of fraud for exposing another individual - much less a sophisticated
multinational corporate entity - to the hypothetical risk of a separate and
future enforcement proceeding."
The sanctions risk allegedly arose from the US routing of
Iran business payments by Skycom to a British firm called Networkers, Gottardi
said.
The Canadian government's lawyers have said that Skycom and
Huawei were not separate entities, but one and the same.
But "nothing said by Ms Meng [about the relationship]
was capable of giving rise to sanctions risk", Gottardi said, and there
was "not a scintilla" of evidence she had influenced HSBC's decision
to route the Networkers payments through the bank's US entity.
In any case, Gottardi said, a report by former White House
lawyer John Bellinger debunked the idea that Skycom had breached sanctions with
the payments and nothing Meng said in her PowerPoint presentation was
misleading or untrue.
The "decisive" Bellinger report showed that the
Huawei-Skycom relationship was irrelevant to HSBC's sanctions risk, Gottardi
said.
Another of Meng's lawyers, Frank Addario, said of Meng's
PowerPoint presentation: "She doesn't dispute the allegations of a close
connection [between Skycom and Huawei]...the only thing she says is 'we didn't
sell embargoed equipment and nor did any of our partners'."
Addario said that Skycom was indeed a third party to Huawei
in its relationship with HSBC, "not an arm's-length third-party partner,
but a third party nonetheless".
Until the committal process began on Wednesday, Meng's
extradition case has mostly been devoted to her lawyers' claims that she has
suffered such an "egregious" abuse of process that her case should be
stayed, or halted entirely.
Experts say that regardless of what Holmes decides, an
appeal is likely, potentially extending the case for years.
The committal hearings, which could last until August 20,
have coincided with a ramping-up of tensions between China and Canada and the
US. On Wednesday, a Chinese court announced that it had convicted Canadian
Michael Spavor of espionage and sentenced him to 11 years' imprisonment.
Spavor and a second Canadian, Michael Kovrig, were arrested
in China in the days after Meng's detention; Ottawa has called them victims of
"hostage diplomacy" that is in retaliation for the Meng case. Kovrig
was also tried for espionage this year, but the outcome has not been announced.
Canadian Prime Minister Justin Trudeau decried the Spavor
ruling as "absolutely unacceptable and unjust". China's foreign
ministry responded to Trudeau by calling Canada "arrogant" and
"ridiculous".
Another Canadian, Michael Schellenberg, had his death
sentence for drug trafficking upheld in China on Tuesday.
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