A homemaker, yoga instructor, insurance agent and a realtor came forward with cash and home equity, to be custodians of Huawei CFO Meng Wanzhou while she is released on bail in Vancouver awaiting possible extradition to the United States.
It was ruled Meng will be able to live under house arrest in her family’s multimillion-dollar home located at 4005 West 28th Avenue in Vancouver, after a BC Supreme Court judge granted her $10 million bail Tuesday.
Flight risk was of paramount importance in the three-day bail hearing, however Justice William Ehrcke ruled he was satisfied with the bail conditions laid out by Meng’s team of attorneys led by David Martin.
“While no bail order can function as a guarantee …the risk of her non-attendance in court can be reduced to an acceptable level by the conditions,” ruled Justice Ehrcke.
Meng, a 46-year-old Chinese citizen, speaking through her counsel, said she is looking forward to reading a novel and spending time with her husband and daughter. She also said she is interested in pursuing a PhD at Sauder School of Business at University of B.C.
“I have been working hard for 25 years. If I were to be ordered released my simple goal is to be with my husband and daughter,” stated Meng, via lawyer David Martin.
“I wish to remain in Vancouver to contest the allegations,” she told the court.
Meng must remain in her house between 11 p.m. and 6 a.m. and surrender her passports to RCMP, among many other conditions.
Central to the decision was determining who Meng’s sureties (or custodians) would be, how much money would be put up for bail and how a private security firm would monitor Meng.
Meng ended up posting bail for $10 million, including $7 million cash from Meng and $3 million from her sureties.
Federal Crown prosecutor John Gibb-Carsley had argued Meng has substantial resources to flee and has unsubstantial ties to stay in Canada.
But if granted bail, “There should be a significant amount of cash, as well as sureties able to supervise” Meng, said Gibb-Carsley.
The bail hearing was twice extended in order to iron out the bail conditions for the daughter of Ren Zhengfei, the founder of Huawei, the world’s largest telecommunications equipment manufacturers. Ren is worth an estimated $3.2 billion.
Meng, who has a 10-year-old daughter and three older sons from two partnerships, now awaits a possible U.S. extradition hearing, following her Dec. 1 detention at Vancouver International Airport, where Canadian police followed through on a provisional arrest warrant from the United States — by way of an extradition treaty between the two Western allies.
She is accused of conspiracy to defraud multiple international financial institutions in relation to international sanction violations.
As Meng’s arrest reverberated around the world, the U.S. has yet to file an extradition request but has upwards of two months to do so (until Jan. 29, 2019), noted Justice Ehrcke. If the request is made, an extradition hearing will occur and this could take years, he added.
Meng is next scheduled in court Feb. 6, 2019.
Initially, Martin proposed Meng’s husband Liu Xiaozong as a surety, as well as $14 million of equity in his two homes (assessed at a combined $21.9 million but subject to $7.5 million in mortgages). But the judge was concerned on Monday that Liu was not a resident of B.C., a prerequisite to be a surety, according to court registry form.
Justice Ehrcke previously noted finding members living in the Vancouver community was important, as it is less likely Meng would harm an outsider’s financial interests (as opposed to her own husband’s) by violating the bail conditions (and possibly fleeing).
So on Tuesday Martin introduced new sureties, including the couple’s realtor, who pledged his $1.8 million Vancouver home.
The realtor is said to have sold Liu both of his homes. He said in an affidavit he meets the couple and their children annually and are now close friends.
Also proposed as sureties were: A homemaker living in a $6 million home, who pledged $850,000 in equity. Her husband is a former Huawei employee; A family friend, proclaimed to be Canadian citizen since 1999 who has known Meng since the mid-1990s after working at Huawei together. Now an insurance agent, this friend pledged $500,000 in home equity from a $1.4 million home; finally, a proclaimed part-time yoga instructor, and also Meng’s neighbour in their high-priced Vancouver neighbourhood, pledged $50,000 cash.
Martin still contended Liu could be considered a temporary resident, as he could obtain visitor status. He also argued case law to maintain Liu as a surety. Foreign nationals caring for sick relatives are extended stay, he noted.
But, regardless of Liu’s surety status, Martin proposed Liu’s home equity in addition to the other proposed sureties should suffice.
In the end the judge did not name Liu a surety.
Prior to judgement, Gibb-Carsley reminded the court the Attorney General of Canada was opposed to release.
Regarding surety, Gibb-Carsley said what was paramount was Liu’s ability to supervise the Meng.
And considering Liu can only stay in Canada as a visitor, “He is not an appropriate surety,” argued Gibb-Carsley, who also said Liu’s lack of ties to Vancouver were of concern.
“If she made the decision to go, it would inconceivable he would not go with her,” he said.
And so it became a matter of determining “what’s on the table,” said Justice Ehrcke.
“There should be a significant amount of cash as well as sureties able to supervise,” said Gibb-Carsley.
Martin said Meng pledged to further restrict her movements while in house arrest.
Martin had proposed that Meng enter de facto house arrest under the 24/7 physical supervision of a private security firm and be monitored using GPS technology connected to cell networks. Martin said this “community custody plan” would see Meng willing to pay for the services of Lions Gate Risk Management, a security firm launched in 2008 by retired RCMP officer Scot Filer, who would also personally act as a surety, thus putting his company’s reputation on the line.
Gibb-Carsley had argued, if anyone has the means to hack an electronic monitoring device, to escape an extradition hearing, it was Meng with her extraordinary resources.
It was proposed by Meng’s team that she wear a tracking device and be moved around the city by a team of one driver and two security officers, supervised by Filer and Lions Gate COO Doug Maynard. This is in addition to a security detail at Meng’s property. Meng would provide Lions Gate with a weekly itinerary that would limit movement within the greater Vancouver region.
Meng is prohibited from entering areas around the airport and parts of the North Shore. She must report to a bail supervisor weekly, or as directed. She must be home between 11 p.m. and 6 a.m., unless given permission from a supervisor. She is to surrender all passports to RCMP and act in a lawful manner.
Filer, however, confirmed in court that Lions Gate has worked mostly on corporate executive security details and has never conducted an operation of monitoring a suspect out on bail in the community.
In addition, the court noted that Lions Gate networks - while purportedly encrypted to Canadian military standards - use existing mobile 3G networks to communicate between devices. Filer could not guarantee the security of the networks would not be compromised
Martin said Tuesday “the Lions Gate people are extraordinarily qualified” and their firm’s “reputation is on the line.”
Meng’s devices will be provided by Recovery Science Corp. Its founder and director Stephen Tan said Monday his company has worked on high profile bail cases and currently has 113 active monitoring cases.
But Tan also noted there has been one case since the company’s launch in 2009 where a suspect on bail had escaped monitoring and was not caught.
Tan said the device could theoretically be removed with scissors or smashed apart. Once it is tampered with, it cannot be used again, said Tan. He added he wasn’t aware of the technology being hacked and that it has cyber security mechanisms in place.
According to a Dec. 3 letter to the United States Department of Justice, from the United States Attorney Eastern District of New York, Meng has been “charged in connection with a conspiracy to defraud multiple international financial institutions.”
It is alleged, Huawei, under direction from Meng and other high-ranking company officials, sold telecom technology to Iran, via unofficial subsidiary SkyCom, in contravention to a 2009-2014 sanction imposed by the United States.
It’s alleged banks were induced to carry out transactions with sanctioned countries.
Meng denies allegations she was involved in any such transactions.
Security experts in Western countries have long viewed the company’s reach and ties to Beijing as a risk to national security. The U.S., Japan, New Zealand and Australia have banned Huawei equipment from its emerging 5G networks, citing concerns of hacking by the Chinese government.
Meng’s defence dismissed the Canadian prosecutors’ position regarding the Huawei executive’s recent absence from visiting the United States – she has not entered the country since March 2017, despite multiple entries in the years prior. American prosecutors argued this is tantamount to “intent to evade apprehension” in the U.S., because Meng allegedly became aware of Huawei subsidiaries being investigated in April 2017.
“That’s a speculative construction,” Martin said in court, noting that prior to her arrest she was slated to travel to Mexico, Costa Rica, Argentina and France before returning to China on this current trip.
“She is a businesswoman doing her job all over the world. We don’t all have to spend time in the United States.”
Justice Ehrcke agreed with Martin, saying he put “little weight” in such “speculation.”
Martin previously outlined six points to Justice Ehrcke as to why Meng should be granted bail, including her character and dignity, having worked as an executive for a major multinational corporation. Fleeing would also embarrass her father and China itself.
Gibb-Carsley previously said Meng, despite having lived here before, had no “meaningful” connections to Vancouver. Meng admitted in filings that she spends 2-3 weeks in Vancouver each summer and “I say that is not meaningful.”
Her permanent resident card expired in July 2009, noted Gibb-Carsely.
The first two days of the hearing were well attended by hundreds of people, as it was on Friday; this included portions of the Chinese-Canadian community. Some people in attendance were handing out paper slips with a WeChat QR code, allowing access to social media chat groups supporting Meng’s fight against extradition to the United States.
“If you want Huawei to continue to bring pride to the Motherland, and if you want to support them, scan and join,” one slip read. “Overseas Chinese unite!”
Huawei Technologies released a statement following the bail decision, saying the company has “every confidence that the Canadian and US legal systems will reach a just conclusion in the following proceedings.
“As we have stressed all along, Huawei complies with all applicable laws and regulations in the countries and regions where we operate, including export control and sanction laws of the UN, US, and EU. We look forward to a timely resolution to this matter.”
