U.S. charges top Chinese cellphone firm Huawei with money laundering, fraud

WASHINGTON — The Trump administration announced criminal charges against one of China's largest telecommunications companies Monday, a dramatic move that promises to ratchet up tensions on the eve of trade talks this week between the two countries.

Acting Attorney General Matthew Whitaker told reporters in Washington that a 13-count indictment had been unsealed in federal court in Brooklyn, charging Huawei as a company, and its chief financial officer, Wanzhou Meng, with money laundering, bank fraud, wire fraud and conspiracy. Huawei also was charged with conspiracy to obstruct justice.

Meng, who was arrested in Canada in December, is accused of orchestrating a scheme to violate U.S. sanctions on Iran. She is a daughter of Huawei's founder, Ren Zhengfei, who served as an engineer in the People's Liberation Army from 1974 to 1983.

RELATED: Huawei CFO Meng Wanzhou arrested in Canada

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Huawei chief financial officer Meng Wanzhou arrives at a parole office in Vancouver, British Columbia, Wednesday, Dec. 12, 2018. (Darryl Dyck/The Canadian Press via AP)
Huawei chief financial officer Meng Wanzhou arrives at a parole office with a security guard in Vancouver, British Columbia, Wednesday, Dec. 12, 2018. (Darryl Dyck/The Canadian Press via AP)
Huawei chief financial officer Meng Wanzhou, left, leaves her home in Vancouver, British Columbia, Wednesday, Dec. 12, 2018. (Jonathan Hayward/The Canadian Press via AP)
Huawei chief financial officer Meng Wanzhou, left, leaves her home with a security guard in Vancouver, British Columbia, Wednesday, Dec. 12, 2018. (Jonathan Hayward/The Canadian Press via AP)
Huawei chief financial officer Meng Wanzhou, right, waves goodbye to visitors at her home in Vancouver on Wednesday, Dec. 12, 2018. A Canadian court on Tuesday released Meng on bail, confining her to Vancouver and its suburbs while she awaits possible extradition to the United States. The U.S. has accused Huawei, the biggest global supplier of network gear for phone and internet companies, of using a shell company to do business with Iran in violation of U.S. sanctions. (Jonathan Hayward/The Canadian Press via AP)
Supporters hold signs and Chinese flags outside British Columbia Supreme Court during the third day of a bail hearing for Meng Wanzhou, the chief financial officer of Huawei Technologies, in Vancouver, on Tuesday December 11, 2018. (Darryl Dyck/The Canadian Press via AP)
In this courtroom sketch, Meng Wanzhou, left, the chief financial officer of Huawei Technologies, speaks to her lawyer David Martin during a bail hearing at British Columbia Supreme Court in Vancouver, British Columbia, Monday, Dec. 10, 2018. (Jane Wolsak/The Canadian Press via AP)
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"For over a decade, Huawei employed a strategy of lies and deceit to conduct and grow its business," said Richard Donoghue, U.S. Attorney for the Eastern District of New York.

FBI Director Christopher Wray said the charges "lay bare Huawei's alleged blatant disregard for the laws of our country and standard global business practices."

Huawei, second only to Samsung as the world's largest supplier of smartphones, has been heavily involved around the world in building the next generation of cell phone networks, known as 5G. The Trump Administration has been pushing other countries to exclude the firm from that work, citing security risks.

Last year, six different U.S. intelligence agencies urged Americans not to buy Huawei phones — which are virtually unavailable in the U.S. And President Trump signed a law blocking federal government agencies from using most of the company's products.

The indictment against a leading Chinese company — and the harsh language senior Trump administration officials used to characterize its conduct — mark a sea change from the Obama administration, which was careful in how it characterized Chinese behavior, even as it secretly saw Chinese hackers siphoning U.S. intellectual property.

Separately, the Wall Street Journal reported Jan. 16 that federal prosecutors are pursuing a criminal investigation of Huawei for allegedly stealing trade secrets from U.S. business partners, including technology used by T-Mobile US Inc. to test smartphones.

The investigation grew in part out of civil lawsuits against Huawei, the Journal reported, including one in which a Seattle jury found Huawei liable for misappropriating robotic technology from T-Mobile's Bellevue, Wash., lab.

In 2012, the House intelligence committee published an investigation concluding that Huawei and another Chinese telecom giant, ZTE, posed a threat to U.S. national security. The firms are essentially arms of the Chinese government, the House concluded, which aid and abet Chinese espionage and could implant spyware that could allow the Chinese government to easily intercept communications or mount cyber attacks on critical infrastructure, such as nuclear plants and power grids.

The companies deny spying for China.

American intelligence officials have long been concerned that Chinese firms insert so-called "back doors" in telecommunications equipment that facilitates eavesdropping. If Chinese companies dominate the construction of 5G networks worldwide, officials fear Chinese spies won't need back doors — they will have direct access to global telecommunications.

Still, U.S. officials have not put forward hard evidence linking Huawei to spying, and critics have pointed out that American spy agencies vacuum large swaths of private information — with court orders — from U.S. technology companies.

Talks aimed at resolving disputes over Chinese technology and trade policies are due to resume in Washington Wednesday, led by the U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He.

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