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Unpacking New US Criminal Charges Against Huawei
The U.S. Justice Department is ratcheting up pressure on Huawei Technologies, announcing on Thursday new criminal charges against the Chinese telecom equipment and smartphone maker.
The case against Huawei, its subsidiaries and its chief financial officer, Meng Wanzhou, announced in January 2019, has added to trade tensions between the U.S. and China and comes as U.S. authorities clamp down on Chinese theft of U.S. intellectual property.
The new charges, contained in a superseding indictment filed in New York, accuse the company of stealing trade secrets from six U.S. companies and violating a mob-busting U.S. law. The indictment also includes new allegations about Huawei's business activities in countries under U.S. sanctions such as Iran and North Korea.
Here is what you need to know about the Huawei case and the new charges against the company:
Huawei was initially charged in January 2019 in two separate federal indictments in district courts in Seattle and New York.
Trade secret theft
In the first case, federal prosecutors in Seattle accused Huawei of attempting to steal trade secrets from American telecom provider T-Mobile US and then obstruct justice when T-Mobile threatened to sue Huawei. The evidence against Huawei included an internal company announcement offering bonuses to employees who stole confidential information from other companies.
Two Huawei subsidiaries – Huawei Device Co. Ltd. and Huawei Device Co. USA – were charged in a 10-count indictment. The charges included theft of trade secrets conspiracy, attempted theft of trade secrets, wire fraud and obstruction of justice.
Iran sanctions violation
In the second case, U.S. prosecutors in New York accused Huawei, Meng and other employees of taking part in a "long-running scheme" to deceive banks and the U.S. government about Huawei's business activities in Iran in violation of U.S. sanctions. Huawei was accused of operating an unofficial subsidiary in Iran called Skycom and repeatedly misrepresenting its relationship with Skycom to banks such as HSBC and U.S. government investigators.
Huawei, Huawei Device USA, Skycom and Meng were named in a 13-count indictment. The charges included bank fraud, conspiracy to commit bank fraud, wire fraud and conspiracy to commit wire fraud, conspiracy to defraud the United States, conspiracy to violate the International Emergency Economic Powers Act and conspiracy to commit money laundering.
New charges
The superseding indictment against Huawei was returned in New York on Wednesday. The new charges include conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act (RICO) to steal trade secrets from six U.S. companies.
Enacted in 1970, RICO was used in the 1970s and 1980s to bust organized crime families in New York but has also been used against other criminal enterprises. The indictment says Huawei and its affiliates constituted an "enterprise" that engaged in a "pattern of racketeering activity" such as wire fraud and witness tampering.
The superseding indictment also adds a charge of conspiracy to steal trade secrets related to Huawei's "long-running practice of using fraud and deception" to purloin sophisticated technology from U.S. companies.
Starting as early as 2000, Huawei and its subsidiaries allegedly used a variety of deceptive methods to steal trade secret information from U.S. companies. The stolen intellectual property included source code and user manuals for internet routers, antenna technology and robot testing technology, according to the indictment.
February 14, 2020 at 08:30AM
