US formally charges Huawei with T-Mobile secrets stealing, sanctions fraud [U]

The US Department of Justice has formally unsealed indictments against Chinese tech giant Huawei. The charges relate to theft of trade secrets from carrier T-Mobile and for fraud related to sanction infractions.

Ten criminal counts relate to a 2012 espionage effort by Huawei employees to gain information about a T-Mobile smartphone testing robot named “Tappy.” The carrier pursued civil charges against the telecommunications firm in 2015 as well as $500 million in damges, but was only awarded about $4 million.

The indictment, which carries on with much of the evidence and other materials of the original suit, claims that the Huawei employees secretly took photos, measured parts and even stole a part of Tappy for replication. When T-Mobile found out, Huawei defended itself by saying the employees were “rogue actors.” But internal emails from 2013 detail an incentives scheme that rewarded Huawei workers for stealing trade secrets.

13 counts target Huawei and three affiliates — including its CFO, Meng Wanzhou — on claims that the company lied to banks on Huawei’s ownership role in an Iranian affiliate company and that it laundered money to a third-party to keep control of the company while officially moving the firm off the books. The department alleges that the company tried to obstruct the government’s investigation into its behavior.

Meng was arrested in Canada on the charges and is currently on bail. The US is requesting her extradition.

Huawei has responded to the charges in a statement which reads:

Huawei is disappointed to learn of the charges brought against the company today […]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. 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 Company 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.

Updated with a statement from Huawei obtained from TechCrunch.

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Jules Wang
Jules Wang is News Editor for Pocketnow and one of the hosts of the Pocketnow Weekly Podcast. He came onto the team in 2014 as an intern editing and producing videos and the podcast while he was studying journalism at Emerson College. He graduated the year after and entered into his current position at Pocketnow, full-time.