The U.S. Department of Justice (DoJ) February 13 revealed it had filed a 16-count superseding indictment in the U.S. Eastern District of New York in Brooklyn that includes new charges that Huawei Technologies conspired to violate the Racketeer Influenced and Corrupt Organizations Act (RICO). The RICO charges relate to allegations that Huawei and its subsidiaries conspired to steal trade secrets from U.S. companies. This is the third set of charges the DoJ has filed against the Chinese communications technology giant and includes those contained in the previous set, unsealed in January 2019.
Last year’s filing charged Huawei with violating U.S. export restrictions by using a shell company to sell U.S. technology in Iran in violation of export restrictions, bank and wire fraud, and obstructing justice. Huawei CFO Meng Wanzhou is currently under arrest and facing extradition hearings in Canada on related bank fraud charges (see “Canada arrests Huawei CFO at U.S. request” and “Canada to launch extradition proceedings for Huawei CFO Meng Wanzhou”). The new filings amplify these charges, alleging that Huawei sold technology, typically through local affiliates, to countries such as Iran and North Korea in violation of U.S., European Union, and/or United Nations sanctions.
RICO is a statute often used in organized crime cases. In this instance, the U.S. charges that Huawei misappropriated such intellectual property as trade secrets and copyrighted works. The latter is alleged to have included source code and user manuals for internet routers as well as antenna technology and robot testing technology. Six U.S. technology firms were victimized in the scheme, according to the filing.
Huawei denies the charges
Huawei quickly denied the charges, which the company described as politically motivated. “These charges do not reveal anything new. They are based largely on resolved civil disputes from the last 20 years that have been previously settled, litigated, and in some cases, rejected by federal judges and juries,” reads an unattributed statement. “In these disputes, no court has ever found that Huawei had engaged in malicious intellectual property theft or required Huawei to pay damages for infringement on others' intellectual property.
“None of our products or technologies have been developed through the theft of trade secrets,” Huawei also asserted via the statement. “Huawei's development is the result of our huge investment in R&D and the hard work of our employees over the past three decades.”
Senate Select Committee on Intelligence Chairman Richard Burr (R-NC) and Vice Chairman Mark Warner (D-VA) released a statement in support of the DoJ’s actions. “Today's announcement by the Eastern District of New York is an important step in combatting Huawei's state-directed and criminal enterprise. The indictment paints a damning portrait of an illegitimate organization that lacks any regard for the law,” the senators said. “Intellectual property theft, corporate sabotage, and market manipulation are part of Huawei's core ethos and reflected in every aspect of how it conducts business. It uses these tactics indiscriminately against competitors and collaborators alike. 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. We commend the men and women of the FBI who pursued this investigation and the prosecutors in New York who brought this indictment.”
The superseding charges were filed against Huawei and four official and unofficial subsidiaries — Huawei Device Co. Ltd., Huawei Device USA Inc., Futurewei Technologies Inc., and Skycom Tech Co. Ltd. — as well as Wanzhou.
For related articles, visit the Business Topic Center.
For more information on high-speed transmission systems and suppliers, visit the Lightwave Buyer’s Guide.
To stay abreast of optical communications technology, subscribe to Lightwave’s Enabling Technologies Newsletter.
Stephen Hardy | Editorial Director and Associate Publisher, Lightwave
Stephen Hardy is editorial director and associate publisher of Lightwave and Broadband Technology Report, part of the Lighting & Technology Group at Endeavor Business Media. Stephen is responsible for establishing and executing editorial strategy across the both brands’ websites, email newsletters, events, and other information products. He has covered the fiber-optics space for more than 20 years, and communications and technology for more than 35 years. During his tenure, Lightwave has received awards from Folio: and the American Society of Business Press Editors (ASBPE) for editorial excellence. Prior to joining Lightwave in 1997, Stephen worked for Telecommunications magazine and the Journal of Electronic Defense.
Stephen has moderated panels at numerous events, including the Optica Executive Forum, ECOC, and SCTE Cable-Tec Expo. He also is program director for the Lightwave Innovation Reviews and the Diamond Technology Reviews.
He has written numerous articles in all aspects of optical communications and fiber-optic networks, including fiber to the home (FTTH), PON, optical components, DWDM, fiber cables, packet optical transport, optical transceivers, lasers, fiber optic testing, and more.
You can connect with Stephen on LinkedIn as well as Twitter.