DOJ charges Chinese telecom Huawei for industrial espionage, evading Iran sanctions

Acting U.S. Attorney General Matthew Whitaker announced Monday the DOJ has indicted Huawei on charges the Chinese telecommunications equipment giant had stolen American technology and bypassed U.S sanctions to continue business dealings with Iran.

One of the largest telecom and consumer electronics manufacturers in the world, Huawei is headquartered in Shenzhen, China.  The firm was founded in 1987.

In two indictments, U.S. prosecutors laid out their case against Huawei, accusing the firm of a range of crimes from wire and bank fraud to stealing trade secrets and obstruction of justice.

“Huawei relied on dishonest business practices that contradict the very economic principles that have allowed American companies and the United States to thrive.  There is no place…for this kind of criminal behavior in our country,” said FBI Director Christopher Wray in a statement after the indictments were unveiled.

In the first of two indictments unsealed, U.S. officials claim in 13 complaints Huawei used a subsidiary, Skycom, to acquire U.S. goods, services, including banking services, to conduct business with Iran.

The complaint states Skycom was used to conceal Huawei’s role in business transactions with a subsidiary in Iran.  Huawei is also charged with bank fraud involving four financial institutions in violation of U.S. applicable law.

Additionally, the charges extend to the top of Hauwei’s corporate structure and target the firm’s CFO, Meng Wanzhou.  The daughter of the company’s founder, Ren Zhengfei, Wanzhou is charged with conspiracy to defraud the U.S., wire and mail fraud, and conspiracy.

Arrested in Vancouver, Canada, in December 2018, Ms. Meng is currently jailed and awaiting an extradition hearing filed by the U.S.

In a second indictment, Huawei is alleged to have stolen trade secrets from rival T-Mobile resulting to 10 additional charges.  The indictment claims engineers with Huawei illegally took photographic images of a T-Mobile phone-testing robot and passed the information to company employees.

The charges also state Huawei offered cash incentives to employees which encouraged the stealing of technology from competitors.  Dividends for the theft hinged on the value of the information provided.

Responding to the allegations, Huawei issued a statement denying all the charges.  China’s foreign ministry blasted the U.S. for its treatment of the firm and urged Washington to drop its bid to have Meng extradited for prosecution.

Commenting on the situation last week, Canada’s Chinese ambassador, John McCallum, argued against extradition by citing possible “political involvement” as a result of President Trump’s comments in late 2018 suggest Meng be used as a pawn in ongoing trade negotiations with China.

 

[Wall Street Journal] [Politico] [Photo courtesy Huawei via Asia Times]

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