US charges Huawei with fraud, trade secrets theft - Mobile World Live

US charges Huawei with fraud, trade secrets theft

29 JAN 2019

The US Department of Justice filed criminal charges against Huawei, accusing the company of bank fraud, sanctions violations and theft of intellectual property from operator T-Mobile US.

During a press conference, Acting Attorney General Matthew Whitaker (pictured, centre) outlined allegations of criminal activity stretching back “at least ten years” and “all the way to the top of the company”.

Charges
A grand jury in New York charged Huawei and affiliate Skycom Tech with 13 counts of bank and wire fraud, money laundering, violating US sanctions on Iran and conspiracy to obstruct justice. Company CFO Meng Wanzhou was also charged with bank fraud, wire fraud and conspiracy.

Huawei and Meng were accused of lying to banks about Huawei’s control of Iran-based Skycom Tech, duping them into processing transactions which violated US sanctions.

Officials said Meng was charged based on her personal conduct rather than the actions of other executives and confirmed they are seeking her extradition from Canada to the US to answer the allegations.

Richard Donoghue, US attorney for the Eastern District of New York, accused Huawei and its subsidiaries of engaging in “serious fraudulent conduct” with the full knowledge and “personal involvement” of executives.

“For over a decade, Huawei employed a strategy of lies and deceit to conduct and grow its business.”

Huawei was also accused of IP theft, wire fraud and obstruction of justice in a separate ten-count document from a grand jury in Washington State. This alleges the company encouraged staff to steal information about T-Mobile’s mobile device testing robot, known as Tappy. Officials said Huawei employees violated non-disclosure agreements, taking photos and measurements of the robot and, in one instance, even stealing one of its arms.

The charges related to theft of trade secrets are punishable by a fine of up to $5 million or three-times the value of the stolen trade secret, whichever is greater. Wire fraud and obstruction of justice are punishable by fines of up to $500,000.

Smear tactic
Huawei issued a statement: “The company denies that it or its subsidiary or affiliate have committed any of the asserted violations of US law set forth in each of the indictments.”

It added the trade secret charges were already the subject of a civil suit which was settled by the parties after a Seattle jury found no damages, or willful and malicious conduct.

China’s government insisted the latest charges are politically motivated and pledged to defend Chinese companies.

Geng Shuang, China’s Foreign Ministry representative, said in a statement: “For some time, the US has been using national power to tarnish and crack down on specific Chinese companies in an attempt to strangle their lawful and legitimate operations. Behind such practices are deep political intentions and manipulations. We strongly urge the US to stop its unreasonable bashing on Chinese companies including Huawei, and treat them objectively and fairly. China will also continue to uphold the lawful and legitimate rights and interests of Chinese companies.”

Trade talks
The news came just before the start of the latest round of trade talks between the US and China, which are set to kick off on 31 January.

Officials noted the charges against Huawei et alia don’t contain any allegations against the Chinese government: US Commerce Secretary Wilbur Ross stressed the charges are “wholly separate from our trade negotiations with China”.

However, Meng’s detention in Canada has angered China, which previously called on the US to forego an extradition request and warned it would retaliate if she is not released.

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Diana Goovaerts

Diana joins Mobile World Live as its new US Editor, reporting on infrastructure and spectrum rollouts, regulatory issues, and other carrier news from the US market. Diana comes to GSMA from her former role as Editor of Wireless Week and...

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