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US Pursues Criminal Charges Against Huawei

Phil Harvey
1/28/2019
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The US Justice Department has unsealed documents leveling criminal charges at Huawei, its affiliates and its CFO, Wanzhou Meng, who was arrested in December in Canada.

These criminal charges, detailed in two unsealed indictments this afternoon, mark the latest attempt by the US government to stamp out the Chinese vendor's activities in the US.

In a ten-count indictment today in a district court in Washington State, the government is charging Huawei Technologies Co. Ltd subsidiaries with "theft of trade secrets conspiracy, attempted theft of trade secrets, seven counts of wire fraud, and one count of obstruction of justice."

The indictment was returned by a grand jury on January 16. It lays out a scenario where Huawei tried to steal trade secrets from T-Mobile US Inc. related to a robotic phone testing device called "Tappy." (See T-Mobile Accuses Huawei of Espionage.)

Separately, a 13-count indictment was unsealed in a Brooklyn, NY, federal court against Huawei, two of its affiliates -- Huawei Device USA Inc. and Skycom Tech Co. Ltd. -- as well as Huawei's CFO Meng. In that group of charges, the government, in a statement today, said, "Huawei and its principals repeatedly lied to US government authorities about Huawei's business in Iran."

Huawei operated Skycom to obtain US goods and then allow Huawei to claim ignorance of illegal activity as Skycom was selling gear to Iran in violation of US sanctions, the indictment said. Around July 2007, the FBI met with "the founder of Huawei" and that individual, the indictment states, lied to the FBI about whether Huawei had any direct dealings with any Iranian company or ever violated US export laws.

In 2017, the government said that Huawei attempted to cover its tracks by moving individuals with knowledge of its dealings with Iran to the People's Republic of China (out of US jurisdiction) and the vendor destroyed and concealed evidence of Huawei's Iran-based business.

Both sets of indictments follow a familiar narrative -- Huawei operates with impunity and follows its ambition to keep growing at all costs. When it trips up, gets caught or discovered, it's alleged that the company then goes to great lengths to cover up its actions from authorities.

— Phil Harvey, US Bureau Chief, Light Reading

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chechaco
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chechaco,
User Rank: Light Beer
1/29/2019 | 3:03:15 AM
Re: Excellent!! Great news!! Banish the Corrupt company
Do you mean ban E///? Last October FT reported Ericsson's 5G recovery overshadowed by US corruption probe. And that in addition to E/// violating US sanctions against South Sudan to which E// paid the fine, though much smaller than ZTE, last July. And all that in addition to the investigation of E/// by the authorities in Greece. So, whom to trust?

 

Phil Harvey
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Phil Harvey,
User Rank: Light Sabre
1/28/2019 | 7:53:44 PM
Comments re: alleged sanctions violations
Here's a bit of what Acting Attorney General Matthew Whitaker said (prepared remarks) during a presser today: 
As early as 2007, Huawei employees allegedly began to misrepresent the company's relationship with its Iranian affiliate, which is called Skycom. Huawei employees allegedly told banking partners that Huawei had sold its ownership interest in Skycom—but these claims were false. In reality, Huawei sold Skycom to itself.
By claiming that Skycom was a separate company—and not an affiliate which Huawei controlled—Huawei allegedly asserted that all of its Iran business was in compliance with American sanctions. These alleged false claims led banks to do business with the company and, therefore, to unknowingly violate our laws. One bank facilitated more than $100 million worth of Skycom transactions through the United States and in just four years.
Huawei allegedly lied about other relationships, as well. In 2017, when one bank decided to terminate its global banking relationship with Huawei over concern about risk, the company allegedly told other banks that Huawei was distancing itself from the bank—not the other way around. Huawei allegedly did this in an attempt to, among other things, manipulate those other banks into expanding and maintaining their banking relationships with Huawei.
There are additional troubling allegations in the indictment as well, including that Huawei lied to the federal government, and attempted to obstruct justice by concealing and destroying evidence and by moving potential government witnesses back to China.
rocket101
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rocket101,
User Rank: Light Sabre
1/28/2019 | 7:18:36 PM
Excellent!! Great news!! Banish the Corrupt company
Excellent!! Great news!! Banish the Corrupt company.  Cheating, Stealing , dishonesty is in their DNA. Hope TMobile learnt a lesson.
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