United States charges Huawei with fraud, China tensions escalate


Watch live in the player above. The criminal charges include wire fraud (seven counts), obstruction of justice, attempted theft of trade secrets, and conspiracy.

In a separate indictment, the Justice Department charged Huawei with stealing trade secrets belonging to T-Mobile.

The United States Department of Justice-as expected-has announced it plans to seek extradition of arrested Huawei CFO Meng Wanzhou, now held in Vancouver.

An indictment partially unsealed by the Justice Department accused Meng, Huawei, its affiliate in Iran, and a subsidiary in the United States of a long-running scheme to help banks evade USA sanctions on Iran. The indictment, which was unsealed in New York City, is part of a multiyear investigation into whether Chinese companies are violating USA sanctions against Iran.

This story is developing and will be updated.

The Justice Department unsealed criminal charges Monday against Chinese tech giant Huawei, two of its subsidiaries and a top executive, who are accused of misleading banks about the company's business and violating USA sanctions.

Rather than being the work of one or two rogue actors, Whitaker said the alleged conduct bore the hallmarks of "corporate-sponsored behaviour" that was directed as company policy.

At the heart of the case against Huawei is the claim that the company misled regulators about its business dealings with Iran, with Meng allegedly playing a key role in that effort.

The case dates back to 2014, when T-Mobile filed a lawsuit in U.S. District Court in Seattle, alleging Huawei stole designs and parts of the company's top secret cell phone testing robot, nicknamed "Tappy".

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"For years, Chinese firms have broken our export laws and undermined sanctions, often using the U.S. financial system to facilitate their illegal activities", Wilbur Ross, the commerce secretary, said.

Meng was arrested in Canada last month at the behest of the US government, which issued an arrest warrant for the executive.

Acting U.S. attorney general Matthew Whitaker said Monday that a grand jury in NY had recommended the charges.

The charges come at a volatile moment for the U.S. and China, which are still locked in trade tensions.

Acting US Attorney General Matt Whitaker, centre, announces an indictment of Chinese telecommunications companies including Huawei, on violations including bank and wire fraud, At left is US Commerce Secretary Wilbur Ross, and FBI Director Christopher Wray, at right.

Wanzhou Meng remains in Canada after being released by police, but it seems likely she will be extradited to the US.

Additionally, and seemingly unconnected with regard to the sanctions violation, the Justice Department also accused Huawei of stealing intellectual property from T-Mobile. "Huawei employees had allegedly told banking partners that Huawei had sold its ownership interest in Skycom".

He referred to security threats posed by Huawei, which were reiterated by Wray during the January 28 press conference.