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U.S. raises the stakes in battle with Huawei, adds racketeering conspiracy charge

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The U.S. raised the stakes in its battle with Huawei Technologies Co., using a law historically associated with prosecuting mafia figures to allege that the Chinese company engaged in decades of intellectual property theft.

Huawei and its chief financial officer, Meng Wanzhou, were already facing criminal charges of violating U.S. sanctions against Iran and North Korea, a case that has rippled into Canada, where the CFO is currently fighting extradition to the U.S. The new allegations, announced Thursday, ratchet up the potential penalties the world’s largest maker of telecommunications equipment could face if convicted.

The new charges depict a company that won international standing by stealing trade secrets, evading U.S sanctions and lying to authorities. The government is wielding some prior allegations of wrongdoing, like Huawei’s alleged theft of a phone-testing robot developed by T-Mobile US Inc., to build a more muscular case.

An email to Huawei’s lawyers seeking comment on the new charges wasn’t immediately returned. The company has denied the allegations, while China’s Ministry of Foreign Affairs has urged the U.S to “stop unreasonably targeting Huawei and other Chinese enterprises.” Through her lawyer, Meng has denied wrongdoing.

The latest claims reflect decades of efforts by Huawei and several of its units, in both the U.S. and China, “to misappropriate intellectual property, including from six U.S. technology companies, in an effort to grow and operate Huawei’s business,” the Justice Department said.

It said the property “included trade secret information and copyrighted works, such as source code and user manuals for internet routers, antenna technology and robot testing technology” and cited an “alleged long-running practice of using fraud and deception” to steal sensitive technology from U.S. rivals.

The U.S. has banned the company’s technology and accused Huawei of aiding Beijing in espionage. Huawei, in turn, has accused the government of orchestrating a campaign to intimidate its employees and launching cyberattacks to infiltrate its internal network. The accusations have increased tensions between Huawei and the administration of President Donald Trump.

Prosecutors in January 2019 charged Huawei and Meng with conspiracy to commit bank fraud for allegedly misleading banks about the company’s doing business in Iran in violation of U.S. sanctions. In the new indictment, they allege that Huawei and three of its entities engaged in a racketeering scheme in New York, California, the District of Columbia, Delaware, New Jersey, Texas and Washington state.

The U.S. also claims that Huawei conspired to steal trade secrets from multiple victim companies in a series of incidents dating back to 2002.

Huawei faces separate charges in Seattle.

The case is U.S. v. Huawei Technologies Co., 18-cr-457, U.S. District Court, Eastern District of New York (Brooklyn).


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