Huawei CFO Faces Multiple 30 Years Prison Sentences For Fraud And Violating US Sanctions In Iran

After being arrested on Saturday, Huawei CFO Meng Wanzhou is still awaiting extradition to the United States. At the time no formal charges had been disclosed, but a bail hearing held in Vancouver revealed that Meng Wanzhou has been charged with fraud and violating US sanctions against Iran.

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The scandal revolves around a small company called Skycom Tech that is located in Hong Kong. According to John Gibb-Carsley, a lawyer working for Canada's Justice Department, Skycom has operated as an unofficial subsidiary of Huawei for several years. The two companies have attempted to hide their relationship from the public, but internally the company is clearly a part of Huawei as employees have Huawei email addresses and ID badges.

In order to circumvent US sanctions on Iran, Huawei allegedly used Skycom Tech to conduct business in Iran in its stead. Skycom Tech also helped to facilitate financial transactions for Huawei, which caused funds to be inadvertently passed from American banks to Skycom Tech in Iran.

In an attempt to be released on bail, Meng Wanzhou's lawyer, Mr. Martin, has offered two properties in Vancouver as well as a cash deposit to help win Meng Wanzhou's freedom. Mr. Martin has also stated that Meng Wanzhou would not violate the terms of her bail if released as it would "humiliate and embarrass her father, who she loves. She would not embarrass China itself," said Mr. Martin.

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Bail hearing at courthouse in Vancouver

Mr. Gibb-Carsley, who is representing Canada's interests in the bail hearing, argued against her release stating that she has no ties to Canada and enormous financial resources.

"At the starting point, there is an incentive to flee. Ms. Meng is charged with conspiracy to defraud multiple international financial institutions. It is a serious offence, with each offence carrying a maximum of 30 years in prison" said Mr. Gibb-Carsley.

The judge residing over the case hasn't set bail yet, and the bail hearing is set to reconvene on Monday. After the bail hearing, Canada also needs to consider the extradition request put forth by the US Justice Department, which Meng Wanzhou will also be able to fight. Regardless of the outcome of the bail hearing, it's likely that Meng Wanzhou's work as Huawei's CFO will be put on hold for several months while these criminal matters are investigated.