Anaya Nolan
Huawei's CFO Meng Wanzhou was arrested in Canada in 2018 on a provisional U.S. extradition request for fraud and conspiracy to commit fraud in order to circumvent U.S. sanctions against Iran. She was accused of misrepresenting the relationship between Huawei and its subsidiary Skycom to HSBC, enabling transactions in the U.S. that supported Huawei's work in Iran in violation of U.S. sanctions. Meng was released on bail and, in 2021, the Department of Justice announced it had suspended its charges against her after she entered into a deferred prosecution agreement.
| Characteristics | Values |
|---|---|
| Name of Huawei CFO | Meng Wanzhou |
| Date of arrest | 1st December 2018 |
| Place of arrest | Vancouver International Airport, Canada |
| Charges | Financial fraud, bank fraud, wire fraud, conspiracy to defraud the United States, conspiracy to violate and substantive violations of the International Emergency Economic Powers Act (IEEPA), conspiracy to commit money laundering, fraud, conspiracy to commit bank and wire fraud |
| Allegations | Covered up attempts by Huawei-linked companies to sell equipment to Iran, violating U.S. sanctions |
| Court proceedings | Meng's extradition case |
| Court decision | Allowed extradition to the United States |
| Deal with U.S. prosecutors | Deferred prosecution agreement |
| Outcome | Charges dismissed |
What You'll Learn
- The CFO of Huawei, Meng Wanzhou, was accused of fraud and arrested in Canada in 2018
- Meng was accused of conspiring to defraud multiple international banks
- Meng was accused of violating US sanctions against Iran
- Meng was released on bail in 2018 and put under house arrest
- Meng reached an agreement with US prosecutors in 2021 to end the bank fraud case against her
The CFO of Huawei, Meng Wanzhou, was accused of fraud and arrested in Canada in 2018
The accusations against Wanzhou stem from her role as deputy chairperson and CFO of Huawei, as well as her position on the board of Skycom, a Hong Kong-based company that allegedly did business with Iran between 2009 and 2014. As a result of these dealings, U.S. banks that worked with Huawei at the time indirectly violated sanctions, and Wanzhou was charged with committing fraud against these banks.
Wanzhou was arrested while transferring planes at Vancouver International Airport en route to Mexico from Hong Kong. The arrest was made public on December 5, 2018, and she was released on bail on December 11, 2018, with a bail of $10 million and the condition of electronic surveillance. The United States had 60 days from the time of Wanzhou's arrest to provide Canadian courts with evidence and intent.
The United States Department of Justice formally announced financial fraud charges against Wanzhou on January 28, 2019, and Canada approved the extradition order on March 1, 2019. Wanzhou's lawyers made several allegations against the prosecution, including unlawful detention, unlawful search and seizure, extradition law violations, misrepresentation, international law violation, and fabricated testimonies.
On September 24, 2021, the Department of Justice announced that it had reached a deal with Wanzhou to resolve the case through a deferred prosecution agreement. As part of the deal, Wanzhou agreed to a statement of facts, conceding that she had made untrue statements to HSBC to enable transactions in the United States that supported Huawei's work in Iran, in violation of U.S. sanctions. The Department of Justice agreed to move to dismiss all charges against Wanzhou when the deferral period ends on December 21, 2022, on the condition that she is not charged with another crime before then.
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Meng was accused of conspiring to defraud multiple international banks
Huawei's CFO, Meng Wanzhou, was accused of conspiring to defraud multiple international banks. The accusations centred around her involvement with Skycom, a Hong Kong-based company that allegedly did business with Iran between 2009 and 2014. Meng served on Skycom's board during this time.
As US banks worked with Huawei, sanctions against Iran were violated indirectly, and Meng was therefore charged with committing fraud against these banks. Skycom was reported to be an unofficial subsidiary of Huawei, with the same company logo, and was referred to as "Huawei's longstanding Iranian subsidiary".
In August 2013, Meng personally made a presentation to an executive of one of Huawei's major banking partners, in which she repeatedly lied about the relationship between Huawei and Skycom.
Huawei relied on its global banking partners for banking services, including processing US-dollar-denominated transactions through the United States. US laws and regulations generally prohibited these banks from processing transactions related to Iran through the United States. The banks could have faced civil or criminal penalties for processing transactions that violated US laws or regulations.
Relying on the repeated misrepresentations by Huawei, banking partners continued their relationships with the company. One banking partner cleared more than $100 million worth of Skycom-related transactions through the United States between 2010 and 2014.
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Meng was accused of violating US sanctions against Iran
Huawei's CFO, Meng Wanzhou, was accused of violating US sanctions against Iran. Meng was arrested in Vancouver, Canada, in December 2018, on a US extradition request. She was accused of conspiracy to defraud multiple international institutions by clearing money that was claimed to be for Huawei, but was actually for Skycom, a company controlled by Huawei, which was dealing with Iran, contrary to sanctions.
Meng served on the board of Skycom, a Hong Kong-based company that allegedly did business with Iran between 2009 and 2014. As US banks worked with Huawei at this time, Iran sanctions were violated indirectly, and Meng therefore committed fraud against these banks, according to the prosecutor.
In January 2019, the US Justice Department announced it would formally seek the extradition of Meng to the US. In March 2019, Canada approved the extradition order. Meng was released on bail and placed under house arrest in Vancouver.
In September 2021, the US Department of Justice announced it had suspended its charges against Meng after she entered into a deferred prosecution agreement. Meng conceded that she had helped misrepresent the relationship between Huawei and Skycom to HSBC in order to facilitate transactions with Iran, but she did not have to plead guilty to the fraud charges. The Department of Justice agreed to dismiss all charges against Meng when the deferral period ends in December 2022, on the condition that she is not charged with another crime before then. Meng was released from house arrest and returned to China on 24 September 2021.
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Meng was released on bail in 2018 and put under house arrest
Meng Wanzhou, the CFO of Huawei, was released on bail in 2018 and put under house arrest in Vancouver, Canada. Meng was granted bail with conditions, including electronic surveillance, and was required to hand over her passports. Meng was arrested in Vancouver while transferring planes en route to Mexico from Hong Kong. The arrest was made by the Royal Canadian Mounted Police at the request of the United States, pursuant to the extradition treaty between the two countries. Meng was accused of financial fraud, including bank fraud, wire fraud, and conspiracies to commit bank and wire fraud. She was also accused of violating sanctions against Iran. Meng's lawyers made several allegations against the prosecution, including allegations of unlawful detention, unlawful search and seizure, extradition law violations, misrepresentation, international law violation, and fabricated testimonies. In 2021, Meng reached an agreement with U.S. prosecutors to end the bank fraud case against her, and she was released from house arrest and returned to China.
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Meng reached an agreement with US prosecutors in 2021 to end the bank fraud case against her
Huawei CFO Meng Wanzhou was granted release and allowed to return to China after reaching a deal with US prosecutors in September 2021. This agreement brought an end to the three-year-long extradition drama that had strained the relationship between the US, China, and Canada.
Meng was arrested in Vancouver, Canada, in December 2018, at the request of US authorities, and had been under house arrest since. She was indicted on bank and wire fraud charges for allegedly misleading HSBC about Huawei's business activities in Iran, in violation of US sanctions. Meng pleaded not guilty to these charges.
The deal with US prosecutors saw the fraud charges against Meng suspended, with the US Justice Department agreeing to defer her prosecution until December 2022. Meng was required to comply with certain obligations under the agreement, including not contradicting a signed statement of facts. If she fulfilled these obligations, the US would drop its extradition proceedings and dismiss the charges against her.
The agreement brought an end to the protracted legal battle that had caused diplomatic tensions and resulted in the detention of two Canadians in China. The deal allowed Meng to return to China, reuniting with her family, while the US maintained its stance on addressing fraudulent financial schemes and upholding its sanctions.
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Frequently asked questions
Meng Wanzhou, the CFO of Huawei, was accused of financial fraud, bank fraud, wire fraud, and conspiracies to commit bank and wire fraud. She was also charged with conspiracy to defraud the United States, conspiracy to violate the International Emergency Economic Powers Act (IEEPA), and conspiracy to commit money laundering.
Meng Wanzhou was released on bail and put under house arrest in Vancouver, Canada. In September 2021, the Department of Justice announced that it had reached a deal with Meng to resolve the case through a deferred prosecution agreement. Meng agreed to a statement of facts that said she had made untrue statements to HSBC to enable transactions in the United States, some of which supported Huawei's work in Iran in violation of U.S. sanctions. However, she did not have to pay a fine or plead guilty to the key charges. The Department of Justice agreed to dismiss all charges against Meng on December 2, 2022, on the condition that she was not charged with a crime before December 21, 2022.
The Chinese government threatened Canada with "serious consequences" if it did not release Meng Wanzhou and detained two Canadian citizens, Michael Kovrig and Michael Spavor, in apparent retaliation for Meng's arrest.
The U.S. Department of Homeland Security Secretary Kirstjen M. Nielsen stated that Huawei and Meng Wanzhou "broke U.S. law and have engaged in a fraudulent financial scheme that is detrimental to the security of the United States."
