U.S. charges Chinese telecom giant Huawei with fraud, stealing trade secrets

By Camilo Montoya-Galvez

/ CBS News

The Department of Justice unveiled criminal charges against Huawei Technologies Co. and its chief financial officer Meng Wanzhou, accusing the largest telecommunications firms in China and of stealing trade secrets, committing wire fraud, breaking confidentiality agreements and violating sanctions against Iran.

A pair of sweeping indictments allege that Huawei, its affiliate in Iran and Meng 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.

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.

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 are 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 competing for control over 5G infrastructure, which both countries believe is key to their economic and military success.

First published on January 28, 2019

© 2019 CBS Interactive Inc. All Rights Reserved.

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