WASHINGTON – Chinese telecommunications giant Huawei and two of its United States subsidiaries have been indicted in federal court in New York on charges of racketeering conspiracy and conspiracy to steal trade secrets, the US Justice Department said on Thursday.
The 16-count indictment against the world’s largest telecommunication equipment manufacturer was returned Wednesday in Brooklyn, a New York City borough.
It accuses Huawei of conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act (RICO) and of conspiracy to steal trade secrets through its “alleged long-running practice of using fraud and deception to misappropriate sophisticated technology from US counterparts,” that department said in a news release.
The intellectual property allegedly illegally obtained by Huawei included “trade secret information and copyrighted works, such as source code and user manuals for internet routers, antenna technology and robot testing technology.”
Huawei allegedly carried out its theft of trade secrets by “entering into confidentiality agreements with the owners of the intellectual property” and then misappropriating the intellectual property for its own use.
The Chinese company also recruited employees of other companies and instructed them to misappropriate the intellectual property of their former employers, according to the indictment.
The company furthermore “allegedly launched a policy instituting a bonus program to reward employees who obtained confidential information from competitors.”
Huawei and two of its US subsidiaries, Huawei Device USA and FutureWei Technologies, “agreed to reinvest the proceeds of this alleged racketeering activity in Huawei’s worldwide business, including in the United States,” the Justice Department said, noting that this new indictment returned Wednesday also contains charges from a prior indictment unsealed in January 2019.
The indictment also accuses Huawei of working on business and technology projects in countries subject to US, European Union and/or United Nations sanctions, such as Iran and North Korea, and of concealing the extent of that involvement by using code names in its internal documents to refer to those countries.
Specifically, it says that Huawei – through its unofficial subsidiary, Skycom Tech Co. Ltd. – helped Iran’s government perform domestic surveillance, including during demonstrations in Tehran in 2009, and that the company lied about its activities in that Islamic country.
Huawei and four “official and unofficial” subsidiaries – Huawei Device USA, FutureWei Technologies, Skycom Tech and Huawei Device Co. – were named as defendants in the indictment, as was Huawei’s chief financial officer, Meng Wanzhou.
The US government has long held the position that Huawei’s products pose a national security threat because of the Shenzhen, China-based company’s alleged close ties to the Chinese government.