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Huawei Charged with Racketeering

By Todd Horwitz

The US government has charged Chinese technology giant Huawei with racketeering and conspiracy to steal trade secrets, according to a superseding indictment unsealed Thursday in the US District Court for the Eastern District of New York. A third charge alleges that Huawei engaged in wire fraud to steal intellectual property. The three new allegations supplement more than a dozen other charges already lodged against the company in a case originally unsealed last January. Huawei pleaded not guilty to the initial charges last March.

The Trump administration has been locked in a battle with Huawei for more than a year, as US officials have waged a campaign urging allies not to use Huawei’s 5G equipment and enacted other measures aimed at stunting the company’s growth. The indictment doesn’t name the businesses from which Huawei allegedly stole intellectual property, but details of the allegations match descriptions of companies including Cisco Systems Inc., Motorola Inc. and Cnex Labs Inc.

“The indictment paints a damning portrait of an illegitimate organization that lacks any regard for the law,” Senator Richard Burr of North Carolina, the Republican chairman of the Intelligence Committee, and Senator Mark Warner of Virginia, the panel’s Democratic vice-chairman, said in an emailed statement. “Intellectual property theft, corporate sabotage and market manipulation are part of Huawei’s core ethos and reflected in every aspect of how it conducts business.”

Huawei doesn’t “abide by Western business practices,” Rob Spalding, a Washington-based technology and security expert at the Hudson Institute who served on the National Security Council, said in an email. “Which is why many U.S. companies are no longer competitive in the global marketplace.”

Huawei, in turn, has accused the U.S. of orchestrating a campaign to intimidate its employees and launching cyberattacks to infiltrate its internal network. China’s Ministry of Foreign Affairs has urged the U.S to “stop unreasonably targeting Huawei and other Chinese enterprises.” The new indictment “is part of the Justice Department’s attempt to irrevocably damage Huawei’s reputation and its business for reasons related to competition rather than law enforcement,” a representative of the company said Thursday. “These new charges are without merit and are based largely on recycled civil disputes” from the last 20 years “that have been previously settled, litigated and, in some cases, rejected by federal judges and juries.”

Huawei was previously accused of violating U.S. sanctions against Iran and North Korea. Meng, the CFO, was charged with fraud last year, with the case rippling into Canada, where she is currently fighting extradition to the U.S. Meng’s lawyers have argued in court that their client did nothing wrong. The U.S. said Huawei stole trade secrets, including copyrighted works, source code and user manuals for internet routers, to “grow and operate” its business. The company swiped antenna and robot testing technology, prosecutors said.

Todd “Bubba” Horwitz

 

 

Todd Horwitz

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