Huawei: US charges Chinese company with racketeering and conspiracy to steal trade secrets

Justice Department alleges telecommunications company did business with Iran and North Korea despite sanctions

The world's largest telecommunications equipment manufacturer and two US subsidiaries have been charged with multiple counts of racketeering in a multi-count indictment alleging the company's "decades-long" effort to misappropriate intellectual property.

A 16-count indictment from the Justice Department also charges Huawei with conspiracy to steal trade secrets stemming from the China-based company's "long-running practice of using fraud and deception to misappropriate sophisticated technology from US counterparts", according to federal prosecutors in New York.

The company already is facing charges of money laundering, bank fraud, wire fraud and conspiracy, while the company's CFO Meng Wanzhou fights extradition charges in Canada.

New charges bolster widespread allegations that intellectual property theft among Chinese companies has led to rapid development of its technology industries.

According to the Justice Department, that misappropriated intellectual property included "source code and user manuals for internet routers, antenna technology and robot testing technology".

The company entered into confidentiality agreements with the property's owners, then violated those agreements by using the information for their own commercial use, prosecutors allege. The company also would hire employees from competing companies and instruct them to "misappropriate their former employers' intellectual property".

Huawei also is accused of obtaining information through proxies, "such as professors working at research institutions", then award bonuses to employees who successfully obtained that information.

"The policy made clear that employees who provided valuable information were to be financially rewarded", according to a Justice Department statement.

By stealing that information, Huawei "was able to drastically cut its research and development costs and associated delays, giving the company a significant and unfair competitive advantage", prosecutors allege.

The indictment also accuses the company of concealing efforts to do business in countries subject to sanctions imposed by the US, United Nations or Europe, including in Iran and North Korea, by relying on local affiliates and using "code names".

Huawei also is accused of providing government surveillance technology through a subsidiary called Skycom, which was allegedly used on Iranians during demonstrations in Tehran in 2009.

The company has said that "US allegations of Huawei using lawful interception are nothing but a smokescreen".

"Huawei has never and will never covertly access telecom networks, nor do we have the capability to do so", the company said following reports that the company can access mobile network "back doors" meant for law enforcement.