USA charges Chinese telecom giant Huawei with fraud, stealing trade secrets

A Huawei Technologies Co. logo sits on display in a store

A Huawei Technologies Co. logo sits on display in a store. , Bloomberg

The U.S. Department of Justice is formally levelling 23 criminal charges against Chinese tech juggernaut Huawei Technologies, multiple subsidiaries and chief financial officer Meng Wanzhou. The indictment is available here and below.

US prosecutors filed criminal charges against Huawei Technologies, China's largest technology company, alleging it stole trade secrets from American rival T-Mobile USA and committed bank fraud by violating sanctions against doing business with Iran.

Acting U.S. attorney general Matthew Whitaker said Monday that a grand jury in NY had recommended the charges.

The charges outlined Monday come at a sensitive diplomatic moment, as top officials from China are expected to arrive in Washington this week for two days of talks aimed at resolving a monthslong trade war between the world's two largest economies. Huawei has said the two companies settled their disputes in 2017.

"As a country we have to carefully consider the risks a company like Huawei will impose on our national security", he said.

Meng Wanzhou has been officially charged two months after she was arrested at the Vancouver Airport.

The indictment alleges Huawei misled the United States and a global bank about its relationship with subsidiaries to conduct business with Iran.

The indictments also claim that Huawei set up a shell company called Skycom to do business in Iran, in violation of economic sanctions imposed on Iran by the U.S.

Shortly after, in a move widely seen as retaliation for Meng's arrest, Chinese authorities detained two Canadians, including a former diplomat, on security charges. Meng is out on bail in Vancouver and her case is due back in court Tuesday as she awaits extradition proceedings to begin.

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At the heart of the case against Huawei is the claim that the company misled regulators about its business dealings with Iran, with Meng allegedly playing a key role in that effort.

Prosecutors also accused Meng of committing fraud and misleading banks into believing Skycom and Huawei were separate.

US Commerce Sercetary Wilbur Ross insists the Huawei cases are "wholly separate" from trade negotiatons.

Huawei is accused of stealing robot technology from T-Mobile for building smartphones.

Engadget has contacted Huawei for comment.

"For years, Chinese firms have broken our export laws and undermined sanctions, often using US financial systems to facilitate their illegal activities", Ross said.

The charges come at a volatile moment for the USA and China, which are still locked in trade tensions.

Another indictment against Huawei was unsealed in the Western District of Washington State, which charges the company and Huawei Device USA with 10 counts of illegal activity that amounts to corporate espionage.

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