WASHINGTON — The Trump administration announced criminal charges against one of China's largest telecommunications companies Monday, a dramatic move that promises to ratchet up tensions on the eve of trade talks this week between the two countries. Acting Attorney General Matthew Whitaker told reporters in Washington a pair of indictments had been unsealed in two separate cases. A Brooklyn grand jury charged Huawei as a company, and its chief financial officer, Wanzhou Meng, with money laundering, bank fraud, wire fraud and conspiracy. Huawei also was charged with conspiracy to obstruct justice. A separate indictment accuses Huawei of stealing trade secrets from U.S. telecom firm T-Mobile. Those charges stem from a civil lawsuit filed by T-Mobile in 2014 over a robot called "Tappy," which was used in testing smartphones. "Huawei intentionally conspired to steal intellectual property from an American company in an attempt to undermine the free and fair marketplace," the Justice Department said in a statement. Meng, who was arrested in Canada in December, is accused of orchestrating a scheme to violate U.S. sanctions on Iran. The Brooklyn indictment says Huawei used a Hong Kong shell company to sell equipment in Iran in violation of U.S. sanctions. Meng misled U.S. banks into believing that Hawei had no interest in the Hong Kong company, called Skycom, according to the Justice Department. The indictment also charges Huawei with conspiracy to obstruct justice by destroying evidence and moving employees out of the U.S. so they could not be called as witnesses. Meng is a daughter of Huawei's founder, Ren Zhengfei, who served as an engineer in the People's Liberation Army from 1974 to 1983. The U.S. is seeking her extradition. "For over a decade, Huawei employed a strategy of lies and deceit to conduct and grow its business," said Richard Donoghue, U.S. attorney for the Eastern District of New York. FBI Director Christopher Wray said the charges "lay bare Huawei's alleged blatant disregard for the laws of our country and standard global business practices." Huawei (pronounced "Wah-way") is second only to Samsung as the world's largest supplier of smartphones and has been heavily involved around the world in building the next generation of cellphone networks, known as 5G. The Trump administration has been pushing other countries to exclude the firm from that work, citing security risks. Last year, six different U.S. intelligence agencies urged Americans not to buy Huawei phones — which are virtually unavailable in the U.S. And President Donald Trump signed a law blocking federal government agencies from using most of the company's products. The indictment against a leading Chinese company — and the harsh language senior Trump administration officials used to characterize its conduct — mark a sea change from the Obama administration, which was careful in how it characterized Chinese behavior, even as it secretly saw Chinese hackers siphoning U.S. intellectual property. Separately, The Wall Street Journal reported on Jan. 16 that federal prosecutors are pursuing a criminal investigation of Huawei for allegedly stealing trade secrets from U.S. business partners, including technology used by T-Mobile to test smartphones. The investigation grew in part out of civil lawsuits against Huawei, the Journal reported, including one in which a Seattle jury found Huawei liable for misappropriating robotic technology from T-Mobile's lab in Bellevue, Washington. Meng Wanzhou, executive board director of the Chinese technology giant Huawei, attends a session of the VTB Capital Investment Forum "Russia Calling!" in Moscow, Russia on Oct. 2, 2014. Alexander Bibik / Reuters In 2012, the House intelligence committee published an investigation concluding that Huawei and another Chinese telecom giant, ZTE, posed a threat to U.S. national security. The firms are essentially arms of the Chinese government, the House concluded, which aid and abet Chinese espionage and could implant spyware that could allow the Chinese government to easily intercept communications or mount cyberattacks on critical infrastructure, such as nuclear plants and power grids. The companies deny spying for China. American intelligence officials have long been concerned that Chinese firms insert "back doors" in telecommunications equipment that facilitates eavesdropping. If Chinese companies dominate the construction of 5G networks worldwide, officials fear Chinese spies won't need back doors — they will have direct access to global telecommunications. Still, U.S. officials have not put forward hard evidence linking Huawei to spying, and critics have pointed out that American spy agencies vacuum large swaths of private information — with court orders — from U.S. technology companies. Talks aimed at resolving disputes over Chinese technology and trade policies are due to resume in Washington on Wednesday, led by the U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He.<doc-sep>Bank of America CEO on raising minimum wage: It's an investment in our teammates President Joe Biden stops to talk to the media as he drives a Ford F-150 Lightning truck at Ford Dearborn Development Center, Tuesday, May 18, 2021, in Dearborn, Mich. Ethereum's 27-year-old founder says we're in a crypto bubble. Did it just burst? 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The fugitive tycoon, who denies any wrongdoing, skipped bail while awaiting trial on multiple charges of financial misconduct including allegedly under-reporting his compensation to the tune of $85 million. (Photo by JOSEPH EID/AFP via Getty Images) B25_25594_R James Bond (Daniel Craig) prepares to shoot in NO TIME TO DIE, an EON Productions and Metro-Goldwyn-Mayer Studios film Credit: Nicola Dove © 2020 DANJAQ, LLC AND MGM. ALL RIGHTS RESERVED. Why the US is making an example out of China's Huawei BERLIN, GERMANY - JANUARY 15: A Woman holding a mobile device with a Huawei logo is seen in this photo illustration on January 15, 2019. (Photo by Xander Heinl/Photothek via Getty Images) (CNN Business) — The United States has filed criminal charges against Huawei, escalating its fight against the Chinese tech giant and potentially complicating efforts by Washington and Beijing to negotiate an end to their bruising trade war. The Justice Department on Monday unsealed two cases against Huawei that detail a slew of allegations. One indictment accuses Huawei of trying to steal trade secrets from T-Mobile (TMUS), and of promising bonuses to employees who collected confidential information on competitors. A second indictment claims the company worked to skirt US sanctions on Iran. The agency also revealed formal charges against Meng Wanzhou, Huawei’s chief financial officer. Meng was arrested in Canada in December, and the United States is looking to extradite her. “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 Whitaker said in a statement. “China must hold its citizens and Chinese companies accountable for complying with the law.” FBI Director Christopher Wray said at a press conference that Huawei “relied on dishonest business practices that contradict the economic principles that have allowed American companies and the United States to thrive.” “The prosperity that drives our economic security is inherently linked to our national security,” Wray said. “And the immense influence that the Chinese government holds over Chinese corporations like Huawei represents a threat to both.” Huawei said Tuesday it was “disappointed” by the US move to bring charges against it. “The company denies that it or its subsidiary or affiliate have committed any of the asserted violations of US law set forth in each of the indictments, is not aware of any wrongdoing by Ms. Meng, and believes the US courts will ultimately reach the same conclusion,” it said in a statement. Chip Somodevilla/Getty Images The charges brought by the United States government against Huawei could complicate negotiations to end its trade war with China. The Chinese government reacted angrily to the charges, accusing the United States of using “its state power to smear and crack down on targeted Chinese companies in an attempt to kill their normal and legal business operations.” “We strongly urge the United States to stop its unreasonable crackdown on Chinese companies, including Huawei,” Foreign Ministry spokesman Geng Shuang said in a statement. He added that the United States should “immediately withdraw its arrest warrant on Ms. Meng and refrain from making a formal extradition request to avoid walking farther down a wrong path.” The charges A 10-count indictment, which was filed in Washington state, claims that Huawei worked for years to steal T-Mobile’s proprietary phone testing technology, known as “Tappy.” Huawei supplied phones to T-Mobile, and had access to some information about Tappy because of that relationship. Huawei was also building its own phone-testing robot in China. Federal prosecutors claim the company repeatedly directed its own employees to gather details about how Tappy worked — a violation of the confidentiality and non-disclosure agreements it had with T-Mobile. Employees were allegedly asked to send information such as photos, measurements and the serial numbers of various components. One employee was caught stealing one of the robot’s arms by placing it in his bag, according to court documents. US prosecutors say that Huawei then obstructed justice when the T-Mobile, which is based in Washington, threatened to sue it. Huawei allegedly came up with a false and misleading report about the attempts to steal Tappy technology, in which it blamed rogue employees. At the same time, the company launched a formal bonus program that rewarded employees who stole trade secrets from competitors, according to the indictment. The government also unsealed a 13-count indictment against Huawei and Meng in Brooklyn federal court. That document details an alleged scheme by Huawei to deceive financial institutions and the US government about its business in Iran. According to the indictment, the deception goes back to mid-2007, when Huawei’s founder, Ren Zhengfei, falsely told the FBI that the company did not violate any US export laws, and that it had not dealt directly with any Iranian company.<doc-sep>The allegations by the US Department of Justice are the most serious Huawei has ever seen, and go to the heart of the trade war between China and the US.<doc-sep>The robot, nicknamed “Tappy,” was of such great interest to Huawei that the company secretly took photos and measurements of the robot and, in one instance, stole its arm so that Huawei engineers could try to replicate it, according to prosecutors. Investigators said that after T- Mobile learned of Huawei’s efforts and threatened to sue, Huawei produced a report falsely claiming the thefts were the work of rogue employees. In fact, U.S. officials said, the FBI had obtained emails showing that in July 2013, Huawei offered bonuses to employees based on the value of information they stole from other companies.<doc-sep>
The Department of Justice (DOJ) unveiled criminal charges on Monday against Huawei Technologies Co. and its chief financial officer Meng Wanzhou, accusing China's largest telecommunications company of stealing trade secrets, committing wire fraud, breaking confidentiality agreements and violating sanctions against Iran. Two sweeping indictments allege that Huawei and its affiliate in Iran stole confidential information and obstructed justice as part of an elaborate and "illegal" economic scheme. Prosecutors are seeking Meng's extradition to the U.S. She was arrested in early December by Canadian authorities at the request of the U.S. government. In response, China said Tuesday the "unreasonable crackdown" on Huawei should be stopped and the extradition request dropped by the U.S., adding that Beijing would "firmly defend" its companies. A foreign ministry statement read on state-run TV didn't say whether Beijing would retaliate for the charges against Huawei. The U.S. has long suspected that China's government uses Huawei to aid in international espionage and thus poses a national security risk -- allegations which both the Chinese state and the telecom hardware giant have consistently denied. During a press conference on Monday, Acting Attorney General Matthew Whitaker said Huawei had made a "concerted effort" to steal information stored on a T-Mobile phone-testing robot called "Tappy." He said the Chinese company instructed its employees to violate non-disclosure and confidentiality agreements with T-Mobile by taking photos of "Tappy." On one occasion, Whitaker added, Huawei representatives stole a piece of "Tappy" so that its engineers in China could attempt to replicate the robot. The Justice Department accused China's largest smartphone manufacturer of offering its employees bonuses if they stole confidential information. "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," FBI Director Christopher Wray told reporters. 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. For months, the Trump administration and lawmakers from both parties have denounced the company for its alleged links to China's communist leadership. After the charges were unveiled, Democratic Sen. Mark Warner of Virginia praised the Trump administration for its crackdown against Huawei. "There is ample evidence to suggest that no major Chinese company is independent of the Chinese government and Communist Party – and Huawei, which China's government and military tout as a 'national champion,' is no exception. It has been clear for some time that Huawei poses a threat to our national security, and I applaud the Trump Administration for taking steps to finally hold the company accountable," Warner wrote in a statement. Whitaker and Wray were joined by Department of Homeland (DHS) Secretary Kirstjen Nielsen, Commerce Secretary Wilbur Ross and several U.S. attorneys for the announcement at DOJ headquarters. The announcement came as U.S. officials were scheduled to meet with representatives of the Chinese government this week to try broker an elusive trade agreement and end the prolonged tariff war between the two economic giants. Apart from the trade dispute, the U.S. and China are also competing for control over 5G infrastructure, which both countries believe is key to their economic and military success.