Questions surround cybersecurity of Meng Wanzhou’s bail conditions

Huawei CFO’s husband is proposed as a surety but his lack of residency status puts wrinkle in defence’s argument

A pro-Huawei protester outside B.C. Supreme Court in Vancouver on Monday, Dec. 10, 2018. PHOTO BY CHUCK CHIANG/BUSINESS IN VANCOUVER

Huawei CFO Meng Wanzhou will wait at least one more day to see if she can return to one of her Vancouver-area homes on bail, to await a possible U.S. extradition hearing.

Flight risk is of paramount importance in the bail hearing.

Federal prosecutors in B.C. Supreme Court argued if anyone has the means to hack an electronic monitoring device, to escape an extradition hearing, it would be Meng, CFO of the world’s largest telecommunications equipment manufacturers presently detained in a Vancouver area jail.

Lead prosecutor John Gibb-Carsley also argued that Meng’s husband Xiaozong Liu cannot act as a surety for Meng should she be granted bail.

These central arguments were laid out in Vancouver Monday after Meng’s lawyers proposed that Meng enter de facto house arrest under the physical supervision of a private security firm and monitored using GPS technology connected to cell networks.

But Gibb-Carsley argued the “community custody plan” for Meng’s security offered no guarantees Meng would not flee. Aside from concerns about surveillance technology, Gibb-Carsley said having Liu as a surety is not sufficient, nor is it possible considering he is not a resident of B.C.

Lawyers for Meng, led by David Martin, said Meng was willing to pay for the services of Lions Gate Risk Management, a security firm launched in 2008 by retired RCMP officer Scot Filer.

Meng was arrested on a provisional arrest warrant while changing planes at Vancouver International Airport Dec. 1. The U.S. has yet to file an extradition request but has upwards of two months to do so.

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.”

According to reports, Huawei, under direction from Meng and other high-ranking company officials, is accused of selling telecom technology to Iran, via subsidiary companies, in contravention to a 2009-2014 sanction imposed by the United States.

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.

It was proposed Meng would wear GPS tracking devices 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 on W. 28th Avenue in Vancouver. Meng would provide Lions Gate with a weekly itinerary that would limit movement within the greater Vancouver region.

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 either case, “It’s still a safety and security requirement,” said Filer in court. 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.

When called to the stand, Recovery Science Corp. founder and director Stephen Tan - whose company would be providing Lions Gate the GPS surveillance ankle brackets and monitoring services - said Recovery Science 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.
Summarizing the concerns of the prosecutors, Justice Ehrcke said, “If there is a failure in technology, then she’s a person who otherwise has greater than ordinary means to exploit that failure.”

Meng’s defence also 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 argue 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.”

Martin outlined six points to Justice Ehrcke as to why Meng should be granted bail: one, she has character and dignity, having worked as an executive for a major multinational corporation; two, she has no criminal record; three, she has no motive to flee and has stated she will not; four, her husband (Xiaozong Liu) is willing to act as a surety and post $1 million in cash as well as the two homes he owns, worth about $14 million. As well, Filer was to act as a second surety; five, fleeing would embarrass her father, Huawei’s founder, and China itself; and six, there is the community custody plan to consider.

Justice Ehrcke questioned the immigration status of Liu, considering he was to be a surety. Martin said he was not sure but later noted Liu was on a multi-entry visa that expires next February. It was noted Liu may be able to stay for up to six months after his last time of entry, last week.
Justice Ehrcke noted sureties effectively act as jailers and if Liu is unable to stay at home with Meng then he cannot act as a surety.

Considering an extradition hearing can take years, “then what?” asked Gibb-Carsley.
According to documents presented to the court, a non-resident of the province cannot be a surety. Furthermore a surety must face financial loss, and he questioned if Filer faced such loss with only $1,000 posted. Martin argued Filer’s reputation was on the line. Furthermore, court registry documents for sureties do not necessarily address “quality of residency” and so Liu could be considered a temporary resident on a visitor’s visa.

Gibb-Carsley said the Attorney General of Canada does have issues with Liu being a surety, but largely on the grounds of his lack of connection to this jurisdiction.

Gibb-Carsley 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.
No sureties are proposed in the Vancouver community. This underscores the lack of meaningful connection, Gibb-Carsley argued.

Justice Ehrcke said these sorts of details need to be ironed out before any decision is rendered.
The hearing was 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!”
The hearing will reconvene Tuesday (Dec. 11).