.S. hits Huawei and CFO Meng with 23 criminal charges. Here’s what you need to know
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The U.S. government has levelled 23 criminal charges against Huawei Technologiesand its chief financial officer Meng Wanzhou as part of an alleged 10-year conspiracy by the Chinese tech giant to sidestep U.S. sanctions on Iran and steal trade secrets.
The U.S. government has levelled 23 criminal charges against Huawei Technologiesand its chief financial officer Meng Wanzhou as part of an alleged 10-year conspiracy by the Chinese tech giant to sidestep U.S. sanctions on Iran and steal trade secrets.
Officials with the U.S. Department of Justice unsealed a 13-count indictment against Huawei, a U.S. subsidiary (Huawei USA), an Iranian affiliate (Skycom), and Meng on charges ranging from bank fraud to money laundering and obstruction of justice.
Attorney General Matthew Whitaker said the U.S. is seeking an extradition order in Canada for Meng which include bank fraud, wire fraud, and conspiracy to commit both. Meng has said she is innocent of all charges, and China called on Washington to “stop the unreasonable crackdown” on Huawei.
“As early as 2007, Huawei employees allegedly began to misrepresent the company’s relationship with its Iranian affiliate, which is called Skycom,” Whitaker said during a press conference. “Huawei employees reportedly told banking partners that Huawei had sold its ownership interest in SkyCom. But these claims were false. In reality, Huawei had sold Skycom to itself.”
Whitaker alleged that Huawei attempted to hide the fact that the company was not in compliance with U.S. sanctions against Iran.
“These alleged false claims led banks to do business with the company, and therefore to unknowingly violate our laws,” he said, adding the one bank had “facilitated more than $100 million worth of Skycom transactions through the United States in four years.”
Whitaker said he was “deeply grateful” to the Canadian government for arresting Meng last month. Meng is currently out on bail and is expected to appear in a Vancouver courtroom Tuesday.
Huawei is also accused of lying to Congress and obstructing justice, Whitaker said, which included destroying evidence and moving potential witnesses back to China, out of the reach of U.S. prosecutors.
“As charged in the indictment, Huawei and its chief financial officer broke U.S. law and have engaged in a fraudulent financial scheme that is detrimental to the security of the United States,” said Secretary of Homeland Security Kirstjen Nielsen.
Accusations of stealing trade secrets
The Huawei logo is pictured outside their research facility in Ottawa, Ont., Canada, Dec. 6, 2018.
REUTERS/Chris Wattie/File Photo
In a second case against the company, prosecutors unsealed a 10-count indictmentalleging Huawei employees tried to steal trade secrets, namely the design of a robot named “Tappy” from T-Mobile USA Inc. used for testing smartphones.
They allege Huawei managers offered bonuses to workers who could steal trade secrets from rival firms. Emails obtained during investigation reveal the conspiracy to steal secrets from T-Mobile was a company-wide effort involving many engineers and employees within Huawei, according to the indictment.
When T-Mobile originally discovered that its trade secrets were allegedly being compromised and raised concerns, Huawei claimed the employees involved in the theft were working as “rogue actors,” the indictment said.
“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,” said FBI Director Christopher Wray. “To the detriment of American ingenuity, Huawei continually disregarded the laws of the United States in the hopes of gaining an unfair economic advantage.”
News of the charges comes amid an ongoing political dispute between Canada and China that has seen several Canadians arrested in China’s apparent retaliation for Meng’s arrest.
Former diplomat Michael Kovrig and entrepreneur Michael Spavor, have been arrested in China and held without charge, while Robert Schellenberg’s sentence for drug trafficking was suddenly upgraded from life in prison to death.
Ambassador to China John McCallum was fired after he personally weighed in on a Meng’s extradition case. McCallum said Meng might have “quite good arguments” to avoid extradition to the U.S. on fraud charges, though he later apologized.
The indictments also follow increasing calls from the U.S. for Canada to ban the telecommunications company from their 5G mobile networks.
“There is ample evidence to suggest that no major Chinese company is independent of the Chinese government and Communist Party – and Huawei, which China’s government and military tout as a ‘national champion,’ is no exception,” Mark Warner, the top Democrat on the Senate intelligence committee, said in a statement.
“It has been clear for some time that Huawei poses a threat to our national security, and I applaud the Trump Administration for taking steps to finally hold the company accountable.”
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Huawei said it was “disappointed” to hear of the charges.
“After Ms. Meng’s arrest, the company sought an opportunity to discuss the Eastern District of New York investigation with the Justice Department, but the request was rejected without explanation,” a spokesperson for Huawei Technologies told Global News in an emailed statement.
“The allegations in the Western District of Washington trade secret indictment were already the subject of a civil suit that was settled by the parties after a Seattle jury found neither damages nor willful and malicious conduct on the trade secret claim. ”
The spokesperson said Huawei “denies that it or its subsidiary or affiliate have committed any of the asserted violations of U.S. law set forth in each of the indictments, is not aware of any wrongdoing by Ms. Meng, and believes the U.S. courts will ultimately reach the same conclusion.”
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