The United States Department of Justice on Monday filed charges against Huawei, two of its affiliates, and the company’s Chief Financial Officer Meng Wanzhou, alleging a wide variety of criminal acts on the part of the Chinese conglomerate.
A federal court in Brooklyn, New York, unsealed an indictment encompassing 13 counts and naming four defendants: Huawei, Ms. Meng, Huawei Device USA Inc., and Skycom Tech Co. Ltd. The latter two companies are described by prosecutors as Huawei affiliates, though the firm is still denying such a connection to Skycom, a now-defunct firm that used to operate from Hong Kong and had a presence in Iran, a country under Commerce Department’s trade sanctions Ms. Meng is accused of conspiring to circumvent via an illegal banking scheme which led to fraud.
Huawei itself is accused of trade secret theft aimed at T-Mobile in regards to a 2014 lawsuit wherein the carrier alleged the Shenzen-based firm conspired to steal the designs and component of its secret touchscreen experience testing robot “Tappy.” The case was concluded three years later with a weak win for T-Mobile which managed to prove a number of Huawei employees indeed attempted trade secret theft as part of their visit to its Bellevue, Washington, lab but failed to convince the jury that the transgression was ordered by Huawei management.
The DOJ is now essentially reopening the case and described it as just a tip of the iceberg, citing corporate espionage allegations against Huawei dating back to over a decade. FBI Director Christopher Wray called Huawei a national security and economic threat, stating that today’s indictment alleges a “blatant disregard” for U.S. laws which cannot be tolerated.
The beginning of the end?
As a direct result of the newly publicized indictment, the DOJ formally requested Ms. Meng’s extradition from Canada whose authorities already arrested her in Vancouver on December 1 based on a provisional arrest warrant sent by Washington. She was released on bail equivalent to $7.5 billion ten days later and already assembled a legal team in anticipation of her extradition request.
Based on today’s charges, Ms. Meng — a 46-year-old industry veteran and one of three children of Huawei founder Ren Zhengfei — faces up to 30 years in federal prison. China already condemned her apprehension on numerous occasion and arrested over a dozen Canadians over the course of the last two months, with one of them receiving a death sentence for drug trafficking earlier this month. Beijing officially dismissed allegations that its increased efforts aimed at Canadian nationals within its borders are connected to Ms. Meng’s case, which is a notion many current and former diplomats described as obvious.
The case is being handled by U.S. District Judge Ann M. Donnelly of the Eastern District of New York, with the DOJ confirming its investigation into the matter is still ongoing in collaboration with various branches of the FBI, HSI, and the OEE. The federal agency also confirmed its indictment lists other defendants outside of the aforementioned four but their names won’t be publicly revealed for the time being as they haven’t been apprehended. However, given how the accused are likely residing in China, the DOJ’s chances of apprehending them appear slim.
The latest development marks the beginning of an entirely new dimension of stateside troubles for Huawei, which is no mean feat given how the tech giant has been at serious odds with Washington and American companies for about two decades now.
Racist puppets and gamblers
The Monday indictment also essentially spells the end of Huawei’s near- and medium-term U.S. ambitions, both in the consumer electronics and wireless segments. Ms. Meng’s arrest already sparked a massive diplomatic scandal that saw China accuse Canada of being a racist U.S. puppet.
Huawei itself remains adamant it isn’t aware of any wrongdoing on the part of its CFO but the DOJ is likely to have already built a solid case against the executive and the rest of the defendants named earlier today as it presumably wouldn’t have gambled with the indictment otherwise given the dire political consequences that are almost guaranteed to stem from this latest escalation of Washington-Beijing tensions.