US charges China’s Huawei, top executive with bank fraud

The US Department of Justice has unveiled sweeping charges 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 US sanctions against Iran.

The company is also charged in a separate indictment with stealing trade secrets from T-Mobile, US federal prosecutors said on Monday.

The two cases are likely to ratchet up tensions between the United States and China, which are already embroiled in a bitter trade war.

The US fully reimposed sanctions against Iran last year after President Donald Trump announced Washington’s withdrawal from a multinational nuclear deal, saying it was not firm enough to prevent Tehran from developing nuclear weapons.

Huawei had no immediate reaction to the indictments on its Twitter or Facebook accounts. The company and Meng Wanzhou, Huawei’s chief financial officer and daughter of the company’s founder have denied any wrongdoing.

Prosecutors are seeking to extradite Meng, alleging she committed fraud by misleading banks about Huawei’s business dealings in Iran. She was arrested on December 1 in Canada and is currently out on bail.

The prosecutors accused Huawei of using a Hong Kong shell company to sell equipment in Iran in violation of US sanctions. Huawei had done business in Iran through a Hong Kong company called Skycom and alleged that Meng misled US banks into believing the two companies were separate, according to the Justice Department.

In addition to sanctions violations, the 13-count indictment unsealed in New York accused Huawei of money laundering, conspiracy to defraud the US and obstruction of justice.

According to the indictment, Huawei initially claimed that Skycom was not affiliated with it and later said it had only limited operations in Iran that did not violate US sanctions. But the indictment alleged the opposite was true.

It said Huawei’s claims that it sold its interest in Skycom to an unrelated third party in 2007 and that Skycom was merely Huawei’s local business partner in Iran were false.

In reality, Huawei orchestrated the sale to look like a transaction between two unrelated parties, but Huawei actually controlled the company that purchased Skycom, according to the indictment.

The Justice Department also cited news reports in 2013 that disclosed that Huawei operated Skycom as an unofficial affiliate in Iran and that Meng had served on its board of directors.

Even after those reports, Huawei employees, and in particular Meng, continued to lie to Huawei’s banking partners about the tech giant’s relationship with Skycom, the indictment said. The banks relied on the repeated misrepresentations by Huawei as they continued their relationships with the company, it added.

Technology theft charges

In a separate indictment unsealed in the northwestern US state of Washington, prosecutors also alleged that Huawei stole trade secrets, including the technology behind a robotic device that T-Mobile used to test smartphones.

A jury in Seattle ruled that Huawei had misappropriated the robotic technology from T-Mobile’s lab in Washington state.

Meng, who was arrested at in Vancouver on December 1 at Washington’s request, is expected to fight extradition to the US, amid heavy pressure on Canada from Beijing, whose subsequent detention of two Canadians is seen by observers as an act of retaliation for Meng’s arrest.

Acting US Attorney General Matthew Whitaker said the extradition request would be sent by a January 30 deadline.

A hearing is set for February 6.

SOURCE:
Al Jazeera and news agencies