U.S. brings new charges against Chinese tech giant Huawei
Huawei is accused of stealing trade secrets from American companies
WASHINGTON — The Justice Department has added new criminal charges against Chinese tech giant Huawei and several subsidiaries, accusing the company in a brazen scheme to steal trade secrets from competitors in America, federal prosecutors announced Feb. 13.
The company also provided surveillance equipment to Iran that enabled the monitoring of protesters during 2009 anti-government demonstrations in Tehran, according to the indictment, and also sought to conceal business that it was doing in North Korea despite economic sanctions there.
The company issued a statement disputing the allegations and calling them “without merit.”
The new allegations come as the Trump administration raises national security concerns about Huawei, the world’s largest telecommunications equipment manufacturer, and aggressively lobbies Western allies to bar the company from wireless, high-speed networks.
The superseding indictment, brought by federal prosecutors in Brooklyn, adds to the company’s legal woes in the U.S. It adds charges of racketeering conspiracy and conspiracy to steal trade secrets to an existing criminal case in that district, where the company already faces charges of lying to banks about deals that violated economic sanctions against Iran.
Federal prosecutors in Seattle have brought a separate trade secrets theft case against the company, while Meng Wanzhou, a senior Huawei executive and the daughter of the company’s founder, is accused of making false representations to banks about Huawei’s relationship with its Iran-based affiliate. She was arrested in Vancouver, British Columbia, and has yet to be extradited to the U.S.
The latest indictment, an update of a case first filed last year, accuses Huawei of plotting to steal the trade secrets and intellectual property of rival companies in the U.S.
In some instances, prosecutors said, Huawei recruited former employees of rival companies in an effort to gain access to their intellectual property. The company also provided incentives to its own employees to steal from competitors by offering bonuses to those who brought in the most valuable stolen information, and it used proxies — including professors at research institutions — to steal intellectual property, prosecutors said.
The stolen information including antenna and robot testing technology as well as user manuals for internet routers. One goal of the theft, the Justice Department said, was to allow Huawei to save on research and development costs.
In May 2013, according to the indictment, a Huawei employee who accessed the laboratory of a company in Washington state removed a robot arm in a laptop bag. An engineer took photographs and measurements of the arm and shared them with people at Huawei before it was ultimately returned to the company, the indictment said.
At a 2004 trade show in Chicago, a Huawei employee was found in the middle of the night in the booth of a technology company, “removing the cover from a networking device and taking photographs of the circuitry inside,” prosecutors said. The employee wore a badge that listed his employer as “Weihua,” or Huawei spelled with its syllables reversed.
In another episode, a professor at a Chinese university entered into a contract with Huawei to develop prototype software for memory hardware, then signed a licensing agreement with a rival company that offered the professor access to its own proprietary technology, according to the indictment. The professor didn’t disclose his relationship with Huawei, prosecutors said.
The indictment also lays out steps that the company to conceal its business dealings with Iran and North Korea, referring to both countries in internal documents by their code names.
In a statement, Huawei called the new indictment “part of the Justice Department’s attempt to irrevocably damage Huawei’s reputation and its business for reasons related to competition rather than law enforcement.”
“These new charges are without merit and are based largely on recycled civil disputes from last 20 years that have been previously settled, litigated and in some cases, rejected by federal judges and juries,” it said. “The government will not prevail on its charges, which we will prove to be both unfounded and unfair.”
Trump administration officials, including Cabinet secretaries, have recently levelled national security allegations against Huawei in an effort to encourage European nations to ban the gear from next-generation cellular networks.
Secretary of State Mike Pompeo and Defence Secretary Mark Esper made the pitch to Western allies during a trip to Munich this week. Attorney General William Barr, in a speech last week, lamented what he said was China’s aspiration for economic dominance and proposed that the U.S. invest in Western competitors of Huawei.
The administration’s national security adviser, Robert O’Brien, asserted this week that Huawei can secretly tap into communications through the networking equipment it sells globally. The company disputes that, saying it “has never and will never covertly access telecom networks, nor do we have the capability to do so.”