The US Department of Justice has unsealed charges against Huawei and its CFO covering separate alleged conspiracies to break sanctions on Iran and to steal trade secrets from T-Mobile USA.
The charges were widely expected, but will do nothing to warm relations between the world’s superpowers at a time of growing tension over trade and cyber-espionage.
The first, 13-count indictment charges Huawei, affiliates Huawei Device USA and Skycom, and CFO Meng Wanzhou, also the daughter of founder Ren Zhengfei.
She is charged with bank fraud, wire fraud, and conspiracies to commit bank and wire fraud, while Huawei and Skycom are charged with: bank fraud and conspiracy to commit bank fraud, wire fraud and conspiracy to commit wire fraud, violations of the International Emergency Economic Powers Act (IEEPA) and conspiracy to violate IEEPA, and conspiracy to commit money laundering.
Prosecutors allege that the company had been lying about its relationship with a company in Iran (Skycom) since 2007, claiming that it was not a Huawei affiliate. It’s also alleged that as part of this deception, Meng made a presentation to an executive of one of Huawei’s major banking partners repeatedly making the false claims.
It’s alleged that one bank cleared over $100m worth of Skycom-related transactions through the US between 2010 and 2014.
The lies are said to have extended to Huawei providing false information to Congress on its activities in Iran and obstructing justice last year by moving witnesses with knowledge of the affair back to China, as well as “concealing and destroying” evidence.
The second, 10-count indictment charges Huawei with a conspiracy to steal trade secrets, attempted theft of trade secrets, seven counts of wire fraud, and one count of obstruction of justice.
It relates to an attempt to steal IP from then-partner T-Mobile related to its phone-testing robot “Tappy.” Engineers are said to have violated non-disclosure agreements by taking photos of the equipment and in one case stealing a piece of the device during a tour of the T-Mobile lab.
When T-Mobile threatened to sue, Huawei is said to have produced a report falsely claiming the theft was the work of “rogue actors” inside the company.
However, the indictment alleges that this was actually a long-running, company-wide effort that began in 2012. Prosecutors claim to have an internal company announcement that the firm offered bonuses to employees able to steal info from other companies, to be submitted via an encrypted email address.
A federal jury has already sided with T-Mobile in a 2017 civil case.
The rhetoric in the statements provided by the US side reflect the geopolitical nature of the cases.
“These charges lay bare Huawei’s alleged blatant disregard for the laws of our country and standard global business practices,” said FBI director Christopher Wray. “Companies like Huawei pose a dual threat to both our economic and national security, and the magnitude of these charges make clear just how seriously the FBI takes this threat.”
Huawei has denied the allegations.