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DOJ Charges Huawei with Fraud, Intellectual-Property Theft

Huawei logo at a shopping mall in Shanghai, China (Aly Song/Reuters)

The Justice Department on Monday charged China’s largest smartphone maker with bank fraud and stealing trade secrets, in a move that will likely heighten already-elevated tensions between the U.S. and Beijing.

In a 13-count indictment filed in New York City, the DOJ charged Huawei Technologies Co., its chief financial officer, and two affiliated firms with a laundry list of crimes including conspiracy, money laundering, bank and wire fraud, flouting U.S. sanctions on Iran, and obstruction of justice.

The indictment alleges that Huawei stole robotic technology designed to test smartphones from American cellular company T-Mobile. It also accuses the company’s CFO, Meng Wanzhou, of lying about Huawei’s relationship with the Iranian company Skycom, which it says violated American sanctions prohibiting U.S. banks from processing transactions connected to Iran.

Meng was arrested in Canada at the request of American officials on December 1, and is being detained in Vancouver pending extradition proceedings.

“The criminal activity in this indictment goes back ten years and goes all the way to the top of the company,” said Acting attorney general Matthew Whitaker at a press conference announcing the charges.

Huawei, as an $8.4 billion firm protected by China’s Communist party, poses a “dual threat to both our economic and national security, and the magnitude of these charges makes clear just how seriously the FBI takes this threat,” FBI director Christopher Wray said at the same press conference.

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