US DOJ Files Criminal Charges Against Huawei For Trade Secret Theft, Bank Fraud, Obstruction Of Justice
The US Justice Department has filed a series of indictments against Huawei, China's largest telecommunications company, and its US affiliate. Huawei stands accused of several crimes, including a conspiracy to steal trade secrets from T-Mobile, more than half dozen counts of wire fraud, and obstruction of justice.
US security and intelligence agencies have long warned against doing business with Huawei over concerns that it is spying for the Chinese government. Today's charges, however, are not directly related to those previous warnings. Instead, the Department of Justice says Huawei conspired to steal intellectual property from T-Mobile, and could end up paying millions of dollars if found guilty.
"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. I’d like to thank the many dedicated criminal investigators from several different federal agencies who contributed to this investigation and the Department of Justice attorneys who are moving the prosecution efforts forward. They are helping us uphold the rule of law with integrity."
The DOJ says Huawei began a concerted effort to steal information from T-Mobile beginning in 2012. Specifically, the indictment accuses Huawei violated confidentially and non-disclosure agreements (NDAs) related to a phone-testing robot called "Tappy." The indictment claims Huawei's employees took measurements of the robot and secretly snapped photos, which were then sent to a Huawei's engineers in China through encrypted email addresses, all in an effort to build its own phone-testing robots.
To make matters worse, the DOJ says after T-Mobile discovered the operation and threatened to sue, Huawei produced a false report claiming the theft was the result of rogue employees and not a company-wide effort to steal trade secrets. According to the indictment, however, this involved many engineers and employees within Huawei,with the company offering bonuses to employees based on the value of the stolen information they could provide.
"The charges unsealed today clearly allege that Huawei intentionally conspired to steal the intellectual property of an American company in an attempt to undermine the free and fair global marketplace," said FBI Director Wray. "To the detriment of American ingenuity, Huawei continually disregarded the laws of the United States in the hopes of gaining an unfair economic advantage. As the volume of these charges prove, the FBI will not tolerate corrupt businesses that violate the laws that allow American companies and the United States to thrive."
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. Wire Fraud and Obstruction of Justice are punishable by a fine of up to $500,000.