Chinese telecom company Huawei has been indicted for theft of trade secrets, obstruction and wire fraud, according to the Justice Department, which included secret photos taken by Tappy the testing robot.
The 10-count indictment was unsealed in Washington State against Huawei Device Co. and Huawei Device Co. USA, comprising seven counts of wire fraud, one count of obstruction of justice, one count of attempted theft of trade secrets, and one count of successful theft of trade secrets.
The trade secret crimes are punishable by a fine "of up to $5,000,000 or three times the value of the stolen trade secret, whichever is greater." Wire fraud and obstruction are punishable by a fine of up to $500,000.
The charge is that the company tried to steal secrets from T-Mobile USA (based in Washington state) then obstructed justice after T-Mobile threatened to sue.
The conduct occurred between 2012 and 2014 and included offering a bonus to employees who stole confidential information from competitors.
Justice said that Huawei created a bogus report blaming rogue actors in the company for the conduct. Instead, Justice alleged, it was a companywide effort.
“Today we are announcing that we are bringing criminal charges against telecommunications giant Huawei and its associates for nearly two dozen alleged crimes” Acting Attorney General Matthew G. Whitaker said in a statement. “As I told Chinese officials in August, China must hold its citizens and Chinese companies accountable for complying with the law. I’d like to thank the many dedicated criminal investigators from several different federal agencies who contributed to this investigation and the Department of Justice attorneys who are moving the prosecution efforts forward. They are helping us uphold the rule of law with integrity.”
“This indictment shines a bright light on Huawei’s flagrant abuse of the law – especially its efforts to steal valuable intellectual property from T-Mobile to gain unfair advantage in the global marketplace,” said First Assistant U.S. Attorney Annette L. Hayes of the Western District of Washington, who joined in announcing the indictments.
“Today’s FBI indictments of Huawei officials confirm the risk of China’s involvement in transformational, next generation technology,” said Sen. Roger Wicker (R-Miss.). “The Commerce Committee is taking a hard look at the company’s activities and impact on developing technologies, such as 5G and autonomous vehicles, as well as network security and consumer data protection.”
“There is ample evidence to suggest that no major Chinese company is independent of the Chinese government and Communist Party – and Huawei, which China’s government and military tout as a ‘national champion,’ is no exception," said Senate Intelligence Committee Vice Chairman Mark Warner (D-Va.). "It has been clear for some time that Huawei poses a threat to our national security, and I applaud the Trump Administration for taking steps to finally hold the company accountable."
Warner has been pushing the Administration to get tougher on Huawei and fellow Chinese telecom ZTE.
“This is also a reminder that we need to take seriously the risks of doing business with companies like Huawei and allowing them access to our markets," he said, "and I will continue to strongly urge our ally Canada to reconsider Huawei’s inclusion in any aspect of its 5G infrastructure.
“This action further underscores the need for a coordinated, whole-of-government and whole-of-society approach to dealing with the threat posed by an increasingly forceful China. I will continue to urge the Trump Administration to make China’s rampant IP theft a top priority in ongoing trade negotiations, and will continue pressing for a more coherent, cohesive national strategy to protect U.S. technology and ensure U.S. technological competitiveness.”
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