The Justice Department unveiled a new indictment against Huawei on Thursday, charging the Chinese telecommunications giant with racketeering and conspiracy to steal trade secrets.
The 16-count superseding indictment, unsealed on Thursday one day after being returned in a New York federal court, charged Huawei and its U.S.-based subsidiaries with conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act, commonly known as RICO.
The Justice Department pointed to the company’s “long-running practice of using fraud and deception to misappropriate sophisticated technology from U.S. counterparts” and revealed new details about Huawei’s deceptive efforts to evade United States, European Union, and United Nations sanctions when doing business in North Korea and Iran.
The new indictment alleged Huawei arranged for its goods to be shipped into sanctioned countries, using code names for the countries in their internal company documents.
The indicted defendants now include Huawei as well as four subsidiaries — Huawei Device, Huawei USA, Futurewei, and Skycom — in addition to Huawei’s Chief Financial Officer Wanzhou Meng, the Huawei founder’s daughter, who is in Canada awaiting extradition to the U.S.
The Justice Department said Huawei and its subsidiaries “agreed to reinvest the proceeds of this alleged racketeering activity in Huawei’s worldwide business, including in the United States.”
“As a consequence of its campaign to steal this technology and intellectual property, Huawei was able to drastically cut its research and development costs and associated delays, giving the company a significant and unfair competitive advantage,” the Justice Department concluded.
And the Justice Department said Huawei misled U.S. officials from the FBI and the House Intelligence Committee when confronted about the country’s alleged malfeasance.
The U.S. has long sought to convince allies not to use Huawei, threatening to stop sharing intelligence with allies who did not ban the company in their high-speed wireless networks.
U.S. officials said intelligence shows Huawei has been able to access mobile phone networks secretly through “back doors” designed for use by law enforcement for more than a decade, the Wall Street Journal reported.
The British government defied the U.S. last month in announcing that it would allow the company to supply equipment in some parts of the network, even as it designated the Chinese technology firm a “high-risk vendor.”
Attorney General William Barr said last week that U.S. national security was dependent on pushing back against China’s dominance in 5G technology. He noted that China “can monitor and surveil” countries and companies that use 5G equipment from Chinese-backed companies.
Huawei has denied cooperating with Chinese intelligence.
The crackdown on Huawei is part of the Justice Department’s larger effort to stem China’s activities. The number of arrests related to Chinese economic espionage cases has risen dramatically in recent years, U.S. officials said.
Last week, FBI Director Christopher Wray said the bureau has about 1,000 investigations open into Chinese technology theft that involve “just about every industry sector.”
Senate Intelligence Committee Chairman Richard Burr and Vice Chairman Mark Warner said the indictment “paints a damning portrait of an illegitimate organization that lacks any regard for the law.”
“Huawei’s unlawful business practices are a threat to fair and open markets, as well as to legitimate competition in a tech space that is critical for the global economy,” they said in a joint statement.
Republican Sen. Ben Sasse, a China hawk, also praised the news.
“Huawei is an arm of the Chinese Communist Party, and the Department of Justice ought to nail Chairman Xi’s tech puppet to the wall. These crimes … are part of Chairman Xi’s strategy to make China the world’s preeminent superpower. The United States and our allies have an obligation to stop them,” the Nebraska senator said in a statement.
