US Accuses Chinese Telecom Giant Huawei of Conspiracy, Money Laundering
WASHINGTON, DC – January 29, 2019
The United States filed charges on Monday against Huawei Technologies, contending that the Chinese telecommunication giant stole trade secrets from a telecom rival and violated US sanctions against doing business with Iran.
A statement about this was made by acting Attorney General Matthew Whitaker. He announced criminal indictments against Huawei, the largest Chinese smartphone maker, its US affiliate, Hong Kong-based Skycom, and Meng Wanzhou, Huawei’s chief financial officer, for a conspiracy that poses a national security threat to the US.
He also confirmed that the department planned to file for the extradition of Meng, who was detained by Canadian authorities at the request of the US in December. The US was facing a Wednesday deadline to pursue extradition proceedings.
The US contends that Meng, 46, a daughter of Huawei’s founder, committed bank fraud to sidestep sanctions against doing business with Iran. She is free on bail in Vancouver, British Columbia, pending extradition proceedings.
The indictments unsealed on Monday were the result of lengthy investigations and included nearly two dozen charges, US officials said.
A federal grand jury in Brooklyn, New York, charged Huawei – and Meng – with money laundering, bank fraud, wire fraud, and conspiracy. Huawei was also charged with conspiracy to obstruct justice.
The case of the theft of a trade secret has been dragging on since 2014, and the events themselves took place in 2012 when Huawei sent its engineers to the American company T-Mobile, to get acquainted with the work of the Tappy robot that simulates the use of smartphones.
According to the T-Mobile lawsuit, Huawei employees, in violation of the agreement, took over not only information about its characteristics, but also took possession of individual elements, as a result, the company was able to use the stolen parts of the robot to “develop, improve and troubleshoot its own the robot. "
Huawei claimed that it settled this dispute back in 2017.
In addition, the US Department of Justice decided that Huawei committed bank fraud because it provided false information about its relationship with its Iranian division. Declaring that the company had withdrawn from the list of its owners, Huawei actually remained the shadow beneficiary and continued to do business in Iran. Totally, Huawei subsidiaries were charged with 10 counts.
The administration of President Donald Trump is trying to prevent US companies from buying Huawei routers and switches and forcing their allies to also refuse to buy products from this company. US security experts are concerned that the equipment could be used to spy against the US.
“Huawei has misrepresented itself over the years,” Whitaker said at a news conference that included US Commerce Secretary Wilbur Ross, Department of Homeland Security Secretary Kirstjen Nielsen, and FBI director Christopher Wray.
“Criminals and bad actors can be certain that they are not going to get away,” Whitaker said. “We show it today and we will show it as the case moves forward.”
Nielsen said Huawei’s behavior was not “just illegal but also detrimental to the national security of the US” and that the US would “not tolerate a regime that supports terrorism.”
Ross noted that the administration had punished another Chinese telecommunications company, ZTE, last year for violating US sanctions.
Wray said “Huawei has repeatedly refused to respect US law. Huawei relied on dishonest business practices. There is no place, none, for this kind of criminal behavior to be committed in our country.”
“The immense influence the Chinese government holds towards Chinese companies is a tremendous threat to the US. As a country we have to carefully consider the risks a company like Huawei will impose on our national security,” he said.
Whitacker stressed that only Huawei and its officials figured in the charges; the Chinese authorities are not involved in this.
However, in December, Deputy Attorney General Rod Rosenstein announced charges against two Chinese men, citing evidence that they were hackers associated with the Ministry of State Security and had hacked into a dozen companies and government agencies in the US and around the world, targeting intellectual property and confidential business information.