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  • U.S. charges Huawei with racketeering

    U.S. charges Huawei with racketeering

    The U.S. government charged Huawei and two of its subsidiaries with federal racketeering and conspiracy to steal trade secrets, a significant escalation in the Trump administration’s legal fight with the Chinese telecommunications company.

    H/T: New York Times

    From the Department of Justice statement:

    As revealed by the government’s independent investigation and review of court filings, the new charges in this case relate to the alleged decades-long efforts by Huawei, and several of its subsidiaries, both in the U.S. and in the People’s Republic of China, to misappropriate intellectual property, including from six U.S. technology companies, in an effort to grow and operate Huawei’s business. The misappropriated intellectual property included trade secret information and copyrighted works, such as source code and user manuals for internet routers, antenna technology and robot testing technology. Huawei, Huawei USA and Futurewei agreed to reinvest the proceeds of this alleged racketeering activity in Huawei’s worldwide business, including in the United States. 

    The means and methods of the alleged misappropriation included entering into confidentiality agreements with the owners of the intellectual property and then violating the terms of the agreements by misappropriating the intellectual property for the defendants’ own commercial use, recruiting employees of other companies and directing them to misappropriate their former employers’ intellectual property, and using proxies such as professors working at research institutions to obtain and provide the technology to the defendants. As part of the scheme, Huawei allegedly launched a policy instituting a bonus program to reward employees who obtained confidential information from competitors. The policy made clear that employees who provided valuable information were to be financially rewarded.

    The DOJ is charging Huawei, it's U.S. subsidiaries and CFO Meng Wanzho with three new counts, including conspiracy to steal trade secrets, conspiracy to commit wire fraud and racketeering conspiracy under RICO.

    The superseding indictment also alleges the company committed sanctions violations in its dealings with North Korea and Iran by using unofficial channels to deliver equipment.

    Just this week, the DOJ announced that four members of the Chinese military had been indicted on charges of hacking into credit-reporting agency Equifax and stealing data on almost 150 million Americans.

    Read the full 56-page indictment below.

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