The Trump administration on Monday brought criminal charges against Huawei for alleged theft of trade secrets, wire fraud and breach of sanctions, among other violations.
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In 23 indictments, filed in federal court in Brooklyn and Seattle, the U.S. claims that Huawei sought to steal confidential information from T-Mobile from 2012 to 2014, and that executives at the top brass of the company were aware of the effort. The government also alleges that the Chinese firm misrepresented its ownership of an Iranian affiliate called Skycom. The U.S. has sanctions against doing business in Iran.
The list of defendants includes Huawei's Chief Financial Officer Wanzhou Meng, who was arrested in Canada last month and is facing extradition to the U.S. A formal extradition request is expected to be filed by Tuesday, according to acting Attorney General Matthew Whitaker.
The decision marks a dramatic escalation in the global efforts to curb the operations of the telecommunications firm that U.S. officials say effectively operates as a conduit for Chinese espionage.
"We need more law enforcement cooperation with China. China should be concerned about criminal activity by Chinese companies and China should take action," Whitaker told reporters.
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The charges also come as officials from the U.S. and China are prepared to meet in Washington D.C. this week to continue discussions on a trade deal between the two nations. White House press secretary Sarah Sanders on Monday said the charges will not influence the ongoing talks.
In 2012, Huawei allegedly began to steal information on a new robot T-Mobile was building to test phones. Employees at the firm -- which was trying to build its own phone-testing machine -- took covert photos and stole parts of the robot so engineers in China could replicate it, the suit says. Huawei also offered employee bonuses contingent on the level of stolen information, according to emails obtained by the FBI.
“The charges unsealed today clearly allege that Huawei intentionally conspired to steal the intellectual property of an American company in an attempt to undermine the free and fair global marketplace,” Director Christopher Wray said. “The FBI will not tolerate corrupt businesses that violate the laws that allow American companies and the United States to thrive.”
In 13 additional indictments filed separately in Brooklyn, the U.S. claims that Huawei engaged in "conspiracy to commit bank fraud" and money laundering, bank fraud and "conspiracy to obstruct justice" by lying about its ownership of Skycom, which the firm said it sold.
Meng, along with other Huawei employees, "continued to lie to Huawei's banking partners" about its relationship with Skycom, the suit says, also opening up the financial institutions to possible civil or criminal penalties for processing transactions related to Iran through the U.S. When Huawei learned of the federal government's investigation into Skycom, the firm allegedly tried to move witnesses outside of U.S. jurisdiction and destroy evidence of its Iranian operations.
“For years, Chinese firms have broken our export laws and undermined sanctions, often using U.S. financial systems to facilitate their illegal activities,” said Commerce Secretary Wilbur Ross. “This will end."