HUAWEI STOLE, U.S. CHARGES
New indictment filed
The rapid rise of the world’s largest telecommunications company was fuelled in part by decades of intellectual-property theft, American prosecutors alleged Thursday in a sweeping new indictment against Huawei Technologies and CFO Meng Wanzhou.
The new document accuses Huawei of using deception, college researchers operating under cover and other means to steal trade secrets from six technology companies in the U.S., violating racketeering laws.
And it alleges that as well as trying to covertly evade U.S. sanctions barring commercial relations with Iran, it did the same in selling products to North Korea.
It also charges that Huawei helped the Iranian government with surveillance technology used to monitor the 2009 pro-democracy protests in Tehran.
Meng has been under arrest in Vancouver since December 2018 on the heels of a U.S. extradition request that accuses her of fraud in the Iran-sanctions case.
Her detention touched off a bitter feud between the countries, with China imprisoning two Canadians and curtailing trade in what is widely seen as a tit-for-tat response.
The new “superceding” indictment, filed in a U.S. federal court in New York, includes the earlier charges and adds to them, an apparent escalation of American pressure on Huawei amid a U.S.-China trade war and debate about the telecom giant’s role in next-generation wireless networks.
Though she is mentioned as a defendant along with Huawei companies, none of the new charges relating to IP theft and other matters apply to Meng herself, said Peter Carr, a U.S. Justice Department spokesman.
She is accused of fraud by deceiving U.S. banks about Huawei’s close ties to another company that did business in Iran contrary to U.S. sanctions.
Meng’s lawyer could not be reached for comment.
She is aggressively fighting the extradition request, suggesting the charges against her flow from U.S. sanctions and would not constitute offences in Canada, a key requirement of the extradition law.
Huawei did not respond to a request for comment by deadline.
Citing at least some cases that have come to light previously, the new indictment says Huawei violated confidentiality agreements, recruited rival companies’ employees and used professors and other proxies at research institutions to pilfer manuals, source code and other secrets.
In doing so, it violated the Racketeer Influenced and Corrupt Organizations Act (RICO), legislation aimed at prosecuting ongoing criminal organizations.
“As a consequence of its campaign to steal this technology and intellectual property, Huawei was able to drastically cut its research and development costs and associated delays, giving the company a significant and unfair competitive advantage,” said the document.
The indictment does not mention the victims of Huawei’s alleged thefts by name, but some of the allegations appear to stem from cases already made public.
That includes charges by
California-based Cisco — referred to as “company one” in the indictment — that Huawei misappropriated source code and manuals for its routers.
Another allegation seems to connect to Motorola — “company two” — that a relative of Huawei founder Ren Zhengfei who worked for the American firm handed over technology to Ren’s company.
Another case, involving California-based “company six,” alleges a complex scheme by Huawei to obtain a proprietary product that it could then reverse engineer.
Huawei’s methods, according to an internal memo cited in the indictment, included continually hiring away employees from the other firm and fomenting “internal turmoil.” Huawei also claimed to be interested in a joint venture with the U.S. company, and ultimately made an accord with a professor at a Chinese university.
The academic in turn asked to work with the California business, without mentioning his link to Huawei, and obtained a version of the desired product, the indictment charges.
China has repeatedly demanded Meng’s release, and taken other apparent retaliatory action. That includes detaining former Canadian diplomat Michael Kovrig and Canadian businessman Michael Spavor on ill-defined espionage charges, and abruptly escalating a convicted Canadian drug trafficker’s sentence from 15 years’ jail to the death penalty.