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US unveils its criminal case against Huawei !

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US unveils its criminal case against Huawei, alleging China giant stole trade secrets and violated Iran sanctions

The United States has filed criminal charges against Huawei, escalating its fight against the Chinese tech giant and potentially complicating efforts by Washington and Beijing to negotiate an end to their bruising trade war.

The Justice Department on Monday unsealed two cases against Huawei that detail a slew of allegations. One indictment accuses Huawei of trying to steal trade secrets from T-Mobile (TMUS), and of promising bonuses to employees who collected confidential information on competitors. A second indictment claims the company worked to skirt US sanctions on Iran.

The agency also revealed formal charges against Meng Wanzhou, Huawei’s chief financial officer. Meng was arrested in Canada in December, and the United States is looking to extradite her.

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“Today we are announcing that we are bringing criminal charges against telecommunications giant Huawei and its associates for nearly two dozen alleged crimes,” Acting Attorney General Matthew Whitaker said in a statement. “China must hold its citizens and Chinese companies accountable for complying with the law.”

FBI Director Christopher Wray said at a press conference that Huawei “relied on dishonest business practices that contradict the economic principles that have allowed American companies and the United States to thrive.”

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“The prosperity that drives our economic security is inherently linked to our national security,” Wray said. “And the immense influence that the Chinese government holds over Chinese corporations like Huawei represents a threat to both.”

Huawei said Tuesday it was “disappointed” by the US move to bring charges against it.

“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, is not aware of any wrongdoing by Ms. Meng, and believes the US courts will ultimately reach the same conclusion,” it said in a statement.

The Chinese government reacted angrily to the charges, accusing the United States of using “its state power to smear and crack down on targeted Chinese companies in an attempt to kill their normal and legal business operations.”

“We strongly urge the United States to stop its unreasonable crackdown on Chinese companies, including Huawei,” Foreign Ministry spokesman Geng Shuang said in a statement. He added that the United States should “immediately withdraw its arrest warrant on Ms. Meng and refrain from making a formal extradition request to avoid walking farther down a wrong path.”

The charges

A 10-count indictment, which was filed in Washington state, claims that Huawei worked for years to steal T-Mobile’s proprietary phone testing technology, known as “Tappy.” Huawei supplied phones to T-Mobile, and had access to some information about Tappy because of that relationship.

Huawei was also building its own phone-testing robot in China. Federal prosecutors claim the company repeatedly directed its own employees to gather details about how Tappy worked — a violation of the confidentiality and non-disclosure agreements it had with T-Mobile.

Employees were allegedly asked to send information such as photos, measurements and the serial numbers of various components. One employee was caught stealing one of the robot’s arms by placing it in his bag, according to court documents.

US prosecutors say that Huawei then obstructed justice when the T-Mobile, which is based in Washington, threatened to sue it.

Huawei allegedly came up with a false and misleading report about the attempts to steal Tappy technology, in which it blamed rogue employees. At the same time, the company launched a formal bonus program that rewarded employees who stole trade secrets from competitors, according to the indictment.

The government also unsealed a 13-count indictment against Huawei and Meng in Brooklyn federal court. That document details an alleged scheme by Huawei to deceive financial institutions and the US government about its business in Iran.

The company and Meng are also said to have claimed that an affiliate, Skycom, was a separate company in order to conduct business in the country, when in fact it was a subsidiary.

US officials claim that more deceptive statements followed a series of Reuters articles detailing Huawei’s control of Skycom.

The indictment details an episode in 2013 when Meng is said to have made false claims at a meeting with one of Huawei’s banks. Though it’s not named in court documents, Meng’s lawyer previously identified the bank as HSBC (HSBC).

Meng walked through a PowerPoint presentation in Chinese, according to the indictment. A translation later sent to the bank allegedly included “numerous misrepresentations,” such as a claim that Huawei’s work with Skycom consisted of “normal business cooperation.”

HSBC is said to have cleared more than $100 million in Skycom transactions that traveled through the United States between 2010 and 2014 before ending the relationship around 2017.

Huawei under fire

The charges from the United States increase pressure on Huawei, one of China’s tech champions and a crucial part of the country’s efforts to take a key role in the rollout of superfast 5G wireless networks.

The United States has said for years that Huawei poses a potential national security threat. But government efforts to rein in alleged abuses by the company have escalated in recent months.

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