DoJ Charges Huawei with IP Theft, Fraud, and Obstruction

Last March, Huawei reaffirmed its commitment to the U.S. market. This might change their mind – on Monday, the U.S. Department of Justice charged the Chinese telecom giant with 10 indictments for IP theft, wire fraud, and obstruction of justice.

“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 G. Whitaker said.  “As I told Chinese officials in August, China must hold its citizens and Chinese companies accountable for complying with the law.”

The 10 indictments – theft of trade secrets conspiracy, attempted theft of trade secrets, seven counts of wire fraud, and one count of obstruction of justice – charge that Huawei allegedly offered bonuses to employees who stole trade secrets from other companies, kicking off a criminal conspiracy where Huawei tried to steal information on a T-Mobile phone-testing robot dubbed “Tappy.”

After T-Mobile discovered this happy little bit of corporate espionage, and I can’t make this up, Huawei produced a false report claiming the theft was the work of rogue employees and not a concerted effort by Huawei and, one would assume, the Chinese government.

As per usual, Huawei denied all charges, and they’ve repeatedly denied any direct connection to the Chinese government or the People’s Liberation Army, but the Vice Chair of the Senate Intelligence Committee feels differently.

“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,” said the Vice Chair, Democratic Sen. Mark Warner.

Sen. Warner added that Senate Intelligence Committee members have known Huawei “has been a threat for years.”

AT&T and Verizon both refuse to do business with Huawei, and Best Buy refuses to stock their products.

And the U.S. is hardly alone.

In December, Japan banned new Huawei hardware and expunged all existing hardware from key communication infrastructure. Australia and New Zealand have barred Huawei products from 5G networks, and two months ago, Canada arrested Huawei’s CFO, Meng Wanzhou, on a U.S. warrant.

Meng stands accused of bank fraud, wire fraud, and conspiracies to commit bank and wire fraud, all related to efforts to bypass U.S. sanctions on doing business with Iran.

For the main charges against Huawei, Conspiracy and Attempt to Commit Trade Secret Theft are punishable by a fine of up to $5,000,000 or three times the value of the stolen trade secret, whichever is greater.

Read more about the charges here: https://www.justice.gov/opa/pr/chinese-telecommunications-device-manufacturer-and-its-us-affiliate-indicted-theft-trade