A top Huawei executive will soon walk free in Canada and be able to return to China after the Biden Justice Department agreed to enter into a deferred prosecution agreement with the Chinese military-linked company and acquiesced to ending the United States’s extradition request.
Meng Wanzhou was arrested by Canadian authorities in December 2018 at the request of the U.S., indicted in the Eastern District of New York in January 2019, and charged with bank fraud and wire fraud as well as conspiracy to commit both, but she will soon walk free and return to China.
Meng, the daughter of Huawei’s founder, Ren Zhengfei, has served as Huawei’s CFO since 2010, and she appeared virtually before a federal district court in Brooklyn on Friday. The DOJ said she was “arraigned on charges of conspiracy to commit bank fraud and conspiracy to commit wire fraud and bank fraud” but that she “entered into a deferred prosecution agreement” with the U.S. government. The DOJ said the Biden administration also “agreed to withdraw its request to the Ministry of Justice of Canada that Meng be extradited to the United States.”
Shortly after Meng’s arrest in 2018, Canadians Michael Spavor and Michael Kovrig, dubbed “the two Michaels,” were arrested and have been held ever since, being secretly tried and convicted in China in March. Spavor headed a business in China that helped promote visits to North Korea. Kovrig is a former Canadian diplomat who had worked for Canada’s Ministry of Foreign Affairs and had been working in China as an adviser on relations between China and North Korea for the International Crisis Group.
Hours after Meng’s release was announced, news broke that the two Michaels were released and headed back to Canada.
The Chinese Communist Party had repeatedly been accused of engaging in hostage diplomacy, and the U.S., Canada, and numerous other nations have condemned China for the “arbitrary detention” of the two Michaels.
“In entering into the deferred prosecution agreement, Meng has taken responsibility for her principal role in perpetrating a scheme to defraud a global financial institution,” Nicole Boeckmann, the acting U.S. attorney for the Eastern District of New York, said Friday. “Her admissions in the statement of facts confirm that, while acting as the Chief Financial Officer for Huawei, Meng made multiple material misrepresentations to a senior executive of a financial institution regarding Huawei’s business operations in Iran in an effort to preserve Huawei’s banking relationship with the financial institution.”
Boeckmann added: “Meng and her fellow Huawei employees engaged in a concerted effort to deceive global financial institutions, the U.S. government, and the public about Huawei’s activities in Iran.”
Sen. Tom Cotton, an Arkansas Republican, condemned the DOJ’s move, tweeting: “This week, the Biden administration returned to a policy of appeasing China, a strategy that’s failed for decades … The administration is surrendering to China’s hostage diplomacy by dropping criminal charges against a Huawei executive currently held in Canada.”
The nonprosecution agreement was entered into by Meng and the DOJ in front of Judge Ann Donnelly of the Eastern District of New York. The DOJ agreed to defer prosecution until December 2022, after which the charges will be dismissed entirely.
The DOJ’s 13-count indictment in the Brooklyn court said Huawei, as well as two affiliates, Huawei USA and Skycom, were also charged with wire fraud, bank fraud, conspiracy, money laundering, and dodging sanctions against Iran.
Meng was released on $8 million bail in early January 2019 and has been living in a mansion her family owns in Vancouver. She was allowed to travel around the city with a GPS monitor on her ankle while awaiting the result of her extradition proceedings, which were long tied up in Canadian court.
“This Deferred Prosecution Agreement will lead to the end of the ongoing extradition proceedings in Canada, which otherwise could have continued for many months, if not years,” Mark Lesko, the acting assistant attorney general for the DOJ’s national security division, said on Friday.
The DOJ said Meng “has agreed to the accuracy of a four-page statement of facts that details the knowingly false statements she made” to the unnamed bank. The DOJ claimed that “if Meng breaches the agreement, she will be subject to prosecution of all the charges against her in the third superseding indictment filed in this case.”
The DOJ and U.S. intelligence agencies believe Huawei and other Chinese companies are working hand-in-hand with the ruling Chinese Communist Party, potentially giving China‘s surveillance state access to hardware and networks across the world.
The Commerce Department explained in December that Huawei was added to the entity list because the company and its affiliates “engaged in activities that are contrary to U.S. national security or foreign policy interests.”
The Biden administration agreement to defer the Huawei prosecution could be seen as the U.S. bowing to pressure from China.