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Author Topic: US Charges Huawei With Conspiracy to Steal Trade Secrets, Racketeering  (Read 58 times)
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« on: February 14, 2020, 04:14:32 PM »

The U.S. Department of Justice charged Huawei and two U.S. subsidiaries with conspiracy to steal trade secrets and to violate the Racketeer Influenced and Corrupt Organizations Act (RICO).

The defendants included in today's16-count superseding indictment are Huawei — the world’s largest manufacturer of telecommunications equipment — and four official and unofficial subsidiaries: Huawei Device Co. Ltd. (Huawei Device), Huawei Device USA Inc. (Huawei USA), Futurewei Technologies Inc. (Futurewei) and Skycom Tech Co. Ltd. (Skycom).

Huawei’s Chief Financial Officer Wanzhou Meng is also introduced as a defendant. She was previously charged together with Huawei and two Huawei affiliates — Huawei USA and Skycom - with financial fraud, money laundering, conspiracy to defraud the U.S., obstruction of justice, and sanctions violations in a 13-count indictment unsealed in January 2019.

The new charges included in this new indictment relate to the company's alleged decades-long efforts to steal intellectual property from six US tech companies.

During this time, Huawei and its US and Chinese subsidiaries purportedly misappropriated copyrighted information and trade secrets including but not limited to internet routers' manuals and software source code, as well as antenna and robot testing technology.

"The means and methods of the alleged misappropriation included entering into confidentiality agreements with the owners of the intellectual property and then violating the terms of the agreements by misappropriating the intellectual property for the defendants’ own commercial use, recruiting employees of other companies and directing them to misappropriate their former employers’ intellectual property, and using proxies such as professors working at research institutions to obtain and provide the technology to the defendants," the press release says.

"As part of the scheme, Huawei allegedly launched a policy instituting a bonus program to reward employees who obtained confidential information from competitors.  The policy made clear that employees who provided valuable information were to be financially rewarded."

According to the DoJ, Huawei and its subsidiaries were able to obtain the targeted nonpublic intellectual property which made it possible for the Chinese company to significantly decrease research and development costs, thus obtaining an unfair competitive advantage.

"The superseding indictment also includes new allegations about Huawei and its subsidiaries’ involvement in business and technology projects in countries subject to U.S., E.U. and/or U.N. sanctions, such as Iran and North Korea – as well as the company’s efforts to conceal the full scope of that involvement," the DoJ press release adds.

Huawei allegedly violated the imposed sanctions by using local affiliates in the sanctioned countries to arrange shipments of equipment and to provide services to end-users.

The Shenzen-based company also used its unofficial subsidiary Skycom to help "the Government of Iran in performing domestic surveillance, including during the demonstrations in Tehran in 2009."


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