Criminal Company

How Huawei became America’s enemy No. 1
By Tripti Lahiri & Mary Hui

Since it was founded by former People’s Liberation Army engineer Ren Zhengfei in 1987, Huawei has grown to become the world’s top provider of telecom equipment, with over $100 billion in revenue and 180,000 global employees. 

That extraordinary success has come with barely a footprint in the US market, where the company has been a target for anxiety about Chinese hacking since the 2000s. 

Today, Huawei is the poster child for that anxiety, and finds itself in the eye of a global storm.
Huawei’s troubles in the US started early: It was met with with suspicion not long after it started competing with US router firms in the aughts, and kept hitting snags after that. 

In 2003, networking firm Cisco accused Huawei of intellectual property theft. 

In 2008, a deal with 3Com collapsed over concerns about Huawei’s ties in China. 

In 2014, T-Mobile sued Huawei for stealing, among other technology, part of a robot’s arm.
But in 2017, US president Donald Trump took office, and since then actions against Huawei have come fast and furious. 

On May 15, Trump signed an executive order that effectively bans Huawei from accessing US supply chains, his strongest action yet against the company. 

Less than a week later, Google pulled Huawei’s Android license—after a grace period allowed by the Trump administration for current users, the company’s future phones will be cut off from the most widely used operating system in the world and the Google universe. 

Suppliers from Britain, such as chip maker ARM, are set to follow Google’s lead.
Trump’s endgame is still unclear. 

Is the only safe Huawei a “dead” Huawei? 

Or is this another gambit in his ongoing trade negotiations with China? 

It may be too soon to tell: On May 23, Trump called Huawei “very dangerous” but also said the dispute might be resolved a trade deal.
What is clear is that this showdown has been a long time coming.

2001
Huawei, then a 14-year-old company with sales of $3 billion, sets up offices in the US (pdf). It also opens its first office in Britain.

2003
January: Router-maker Cisco sues Huawei for copyright violations, alleging its source code turned up in Huawei products. It later drops the suit.
November: Huawei’s joint venture with California-based networking company 3Com to make and sell routers and switches begins operations.

2005
The idea that Huawei is linked to the Chinese military surfaces prominently in a Rand Corporation report commissioned by the US Air Force. 

The think tank notes that major IT players like Huawei appear to be private-sector actors (pdf, pages 217-8), but “many of these electronics companies are the public face for, sprang from, or are significantly engaged in joint research with state research institutes.” 

It adds:
Huawei maintains deep ties with the Chinese military, which serves a multi-faceted role as an important customer, as well as Huawei’s political patron and research and development partner.
The report also says sales linked to the Chinese military could be anywhere from less than 1% of Huawei’s revenues to as high at 6%. 

2007
In July, the FBI interviews Huawei’s founder, Ren, in relation to violations of US trade sanctions on Iran.

2008
Huawei’s efforts to take a 16% stake in 3Com collapse amid lawmakers concerns (paywall) about Huawei’s ties to the Chinese military, forcing Huawei and its partner in the acquisition to abandon the bid. 

3Com was a provider of anti-hacking software for the US military, among other contracts. Lawmakers cited the 2005 Rand report.

2009
February: At Barcelona’s Mobile World Congress, Huawei releases its first Android smartphone, under license from Google.
October: Huawei hires an American, Matt Bross, from British Telecom to be its CTO, and to help it make a real foray into the US market. 

Bross apparently runs operations from his basement in St. Louis. 

“I am looking to create an environment where we can grow trust,” he tells Bloomberg in 2011. 

“The fact of the matter is that Huawei is here to stay.” (He leaves Huawei in 2012.)
November: Huawei signs a lease in Plano, Texas, for 100,000 square feet of office space for its North America sales and marketing headquarters. 

“We are honored that Huawei will grow and prosper in Plano for years to come,” the town’s mayor says in a statement.

2010
July: Phone-maker Motorola files a lawsuit accusing Huawei of corporate espionage, but later settles with the company.
November: Citing security concerns, Sprint excludes Huawei (paywall), as well as Chinese telecom ZTE, from bidding for a contract worth hundreds of millions of dollars to modernize its network. Huawei had been hoping this would be its first major US equipment contract win.

2011
February: The Committee on Foreign Investment in the United States tells Huawei to sell (paywall) the assets of bankrupt startup 3Leaf Systems, which it had acquired the previous year. 

Huawei says it didn’t flag the deal to CFIUS because it had only bought some of 3Leaf’s assets, but the panel decides to engage in a retroactive review.

April: Huawei opens a 200,000-square-foot R&D facility in Silicon Valley. 

It continues to grow revenue from equipment sales to mid-tier telecoms in remote areas of the US.

2012
October: A House committee issues a 52-page report (pdf) warning against using equipment from Huawei and ZTE. 

The report states:
In sum, the Committee finds that the companies failed to provide evidence that would satisfy any fair and full investigation. 

Although this alone does not prove wrongdoing, it factors into the Committee’s conclusions below.

Further, this report contains a classified annex, which also adds to the Committee’s concerns about the risk to the United States. 

The investigation concludes that the risks associated with Huawei’s and ZTE’s provision of equipment to U.S. critical infrastructure could undermine core U.S. national-security interests.


2013
Reuters reports that a Hong Kong-based company that tried to sell US computer equipment to Iran’s largest cellphone carrier, in violation of US trade sanctions, is closely linked to Huawei. 

The story says that Ren Zhengfei’s daughter Meng Wanzhou, “a rising star” at Huawei, served on the board of the Hong Kong firm, among other links.

2014
March: The New York Times reports (paywall) that the NSA infiltrated the servers in Huawei’s Shenzhen headquarters, obtaining sensitive information about its giant routers and complex digital switches, and monitoring the communications of top executives.

September: T-Mobile files a lawsuit against Huawei, accusing it of stealing technology, including part of a robot’s arm, from its headquarters. 

Huawei workers spied on and stole part of Tappy, a robot developed by T-Mobile in 2006 to test smartphones. 

Huawei admits that two of its employees had acted "inappropriately".

2015
January: Speaking at the World Economic Forum in Davos, Switzerland, Huawei founder Ren seeks to play down his connection with the Chinese army, saying it was “quite by chance” that he entered the military. 

“We are a Chinese company,” Ren says. 

“Of course we support the Chinese Communist Party and love our country. We comply with the laws of every country we operate in.”
September: Huawei and Google join forces (paywall) to make the Nexus 6p phone.

2016
June: The US Commerce department issues a subpoena (paywall) to Huawei as part of a probe into whether the company violated US export controls on the export or re-export of American technology to Cuba, North Korea, Syria, and Sudan over the previous five years.
December: The Treasury department gets involved with the investigation (paywall) and issues its own subpoena. 

The subpoena comes shortly after the US government restricts sales of American technology to ZTE, saying the Chinese phone-maker violated sanctions against Iran. 

US officials also release internal ZTE documents detailing how the company managed to do business with Iran, and how it modeled its approach off of a rival’s efforts in that country. 

The rival company is not named in the documents, but its description matches Huawei (paywall).

2017
A Seattle jury rules in favor of T-Mobile in its case against Huawei, determining that the latter misappropriated T-Mobile’s trade secrets, and breached a handset-supply contract between the two companies that stipulated each would protect secrets learned through their partnership. 

The jury awards T-Mobile $4.8 million in damages for the breach of contract, but does not award damages for T-Mobile’s trade-secrets claim.

2018
January: AT&T, America’s second-largest wireless carrier, is on the verge of becoming the first carrier in the US to offer Huawei’s handsets, which would be a major breakthrough. 

But it abandons the plan after lawmakers and federal regulators lobby against the idea. 

Concerns around Huawei deepen as the rollout of next-generation wireless technology approaches; a leaked White House memo on 5G names the company a strategic threat. 

Lawmakers want AT&T to cut all commercial ties with Huawei, ending their collaboration on 5G network standards.
April: Huawei lets go of several US staff (paywall), including its vice president of external affairs, William Plummer, a Nokia veteran who joined Huawei in 2010. 

Plummer goes on to detail the company’s (and some of his own) PR missteps in a memoir called Huidu.
May: The Pentagon bans the sale of Huawei and ZTE phones in stores on military bases over concerns that the Chinese government could order the companies to track soldiers’ movements or spy on their communications.
August: The National Defense Authorization Act, which includes language barring government agencies from buying equipment or services from Huawei and ZTE, goes into effect.
October: Two leading US lawmakers—Mark Warner, a Virginia Democrat, and Marco Rubio, a Florida Republican—urge Canadian prime minister Justin Trudeau to bar Huawei from helping build its 5G networks, saying it could pose dangers for US networks. 

The call is part of a broader US effort to get foreign allies to shun Huawei, the Wall Street Journal later reports (paywall), warning the UK, for example, it could be forced to cut off intelligence sharing. 

In November, New Zealand bans Huawei from supplying technology to the country’s 5G rollout, following in the steps of Australia earlier in the year.
December: Huawei’s chief financial officer and the daughter of its founder, Meng Wanzhou, is arrested in Canada at the request of US law enforcement on suspicion of violating trade sanctions on Iran. 

The arrest is seen as a serious escalation of US action against Huawei. 

Trump is criticized for suggesting he could intervene in the Justice Department case against her if it would help secure a trade deal from China. 

2019
January: The US files criminal charges against Huawei, slamming it with two dozen allegations that include conspiring to evade US trade sanctions and steal trade secrets, and also formally seeks Meng’s extradition from Canada. 

Meanwhile, Poland arrests a Huawei employee on allegations of spying for China. 

May 15: Trump signs an executive order banning US telecommunications firms from using the equipment of “foreign adversaries.” 

The order does not name Huawei, but effectively blacklists the company and cuts it off from US supply chains. 

Days later, Google makes a shock announcement that it will terminate Huawei’s license to the Android OS, which powers 86% of the world’s phones and all of the phones sold by Huawei. 

Huawei says it’s developing its own OS, but being cut off from Google’s email and app universe would drastically reduce its appeal overseas. 

Already, mobile carriers are holding off on Huawei 5G phone sales (paywall).
May 20: The restrictions are temporarily eased: The Commerce Department says it will allow Huawei to buy US goods through Aug. 19. 

But that same day, top US chip companies including Intel and Qualcomm cut off vital Huawei supplies, while Microsoft is also said to have stopped taking software orders from the firm.
This month’s moves present the most serious threats yet to Huawei’s future.

Spying Company

President Trump expected to sign order paving way for U.S. telecoms ban on Huawei
By David Shepardson

WASHINGTON -- President Donald Trump is expected to sign an executive order this week barring U.S. companies from using telecommunications equipment made by firms posing a national security risk, paving the way for a ban on doing business with China’s Huawei, three U.S. officials familiar with the plan told Reuters.
The order, which will not name specific countries or companies, has been under consideration for more than a year but has repeatedly been delayed, the sources said, asking not to be named because the preparations remain confidential. 

It could be delayed again, they said.
The executive order would invoke the International Emergency Economic Powers Act, which gives the president the authority to regulate commerce in response to a national emergency that threatens the United States. 

The order will direct the Commerce Department, working with other government agencies, to draw up a plan for enforcement, the sources said.
If signed, the executive order would come at a delicate time in relations between China and the United States as the world’s two largest economies ratchet up tariffs in a battle over what U.S. officials call China’s unfair trade practices.
Washington believes equipment made by Huawei Technologies Co Ltd, the world’s third largest smartphone maker, could be used by the Chinese state to spy. 

Huawei did not immediately comment.
The White House and Commerce Department declined to comment.
The United States has been actively pushing other countries not to use Huawei’s equipment in next-generation 5G networks that it calls “untrustworthy.” 

In August, Trump signed a bill that barred the U.S. government itself from using equipment from Huawei and another Chinese provider, ZTE Corp.
In January, U.S. prosecutors charged two Huawei units in Washington state saying they conspired to steal T-Mobile US Inc trade secrets, and also charged Huawei and its chief financial officer with bank and wire fraud on allegations that the company violated sanctions against Iran.
The Federal Communications Commission in April 2018 voted to advance a proposal to bar the use of funds from a $9 billion government fund to purchase equipment or services from companies that pose a security threat to U.S. communications networks.
Federal Communications Commission chairman Ajit Pai said last week he is waiting for the Commerce Department to express views on how to “define the list of companies” that would be prohibited under the FCC proposal.
The FCC voted unanimously to deny China Mobile Ltd’s bid to provide U.S. telecommunications services last week and said it was reviewing similar prior approvals held by China Unicom and China Telecom Corp.
The issue has taken on new urgency as U.S. wireless carriers look for partners as they rollout 5G networks.
While the big wireless companies have already cut ties with Huawei, small rural carriers continue to rely on both Huawei and ZTE switches and other equipment because they tend to be cheaper.
The Rural Wireless Association, which represents carriers with fewer than 100,000 subscribers, estimated that 25 percent of its members had Huawei or ZTE equipment in their networks, it said in an FCC filing in December.
At a hearing Tuesday, U.S. senators raised the alarm about allies using Chinese equipment in 5G networks.
The Wall Street Journal first reported in May 2018 that the executive order was under review. 

Reuters reported in December that Trump was still considering issuing the order and other media reported in February that the order was imminent.

Global Thief

From university funding to computer hacking: How China steals Western innovation
By James Cook

China is seeking to "steal its way up the economic ladder" at the expense of Western innovation

China is seeking to "steal its way up the economic ladder" at the expense of Western innovation.
Those were the damning words of FBI Director Christopher Wray who last week said that China poses a "multi-layered" threat to US interests.
His comments were made as Washington's campaign to ban Chinese telecoms firm Huawei intensified.
"China has pioneered a societal approach to stealing innovation in any way it can from a wide array of businesses, universities and organisations," he said.
"They're doing it through Chinese intelligence services, through state-owned enterprises, through ostensibly private companies, through graduate students and researchers, through a variety of actors all working on behalf of China."
It's something known only too well by businesses desperate to crack China's lucrative market of 1.3bn people.
Among them is Apple, who saw Chinese electronics business Xiaomi spend years replicating its iPhone designs.
Its chief executive even modelled himself on Apple founder Steve Jobs, wearing similar clothing and copying his presentations.
For Apple design chief Jony Ive, the constant replication was a source of frustration.
“You spend seven or eight years working on something, and then it’s copied. I have to be honest, the first thing I can think, all those weekends that I could have at home with my family but didn’t. I think it’s theft, and it’s lazy,” he said in 2014.
While Xiaomi was a brazen example of a Chinese business copying Western designs, there are far more advanced ways which Chinese businesses have used to copy Western innovation.
Huawei has been at the centre of a political row over concerns that its closeness to the Chinese government could introduce espionage risks if its hardware is used in the development of 5G networks around the world. 
Many countries, including the US, have taken a firm stance against Huawei’s involvement in the new networks, but other nations including the UK have taken a softer approach.
The political row around Huawei often overlooks the company’s historic practice of stealing Western innovation, however.
Over 15 years ago, Huawei took part in a costly legal battle with US technology firm Cisco over allegations that Huawei copied Cisco’s software for its routers.
Huawei eventually admitted that it had cloned the software and pledged to remove it from its products.
Huawei had been systematically reverse-engineering Cisco’s routers, a practice which would have allowed the Chinese telecoms company to peer into the inner workings of Cisco’s software and cherry pick sections to use in its own products.
Cisco sued Huawei for patent infringement in 2003, only settling the case after Huawei admitted to using Cisco’s source code.
The US government has also accused Huawei employees of attempting to copy “Tappy,” a smartphone-testing robot built by US network T-Mobile.
Huawei employees with access to the robot took photographs of Tappy and one employee has been accused of removing one of its arms. 
Concern around Chinese replication of technology doesn't end with reverse-engineering.
As businesses like Huawei have become more successful and expanded around the world, they have begun investing in academic research.
Huawei has spent millions of pounds in the UK alone funding research into technologies such as mobile phone networks. 
But experts have warned that these donations risk handing British innovations to China.
“China is using broad research relationships with universities and other entities to try and fill in any technological gaps,” said Michael Wessel, a commissioner on the US-China Economic and Security Review Commission.
Companies are trying to “advance Chinese standards so that Huawei and other Chinese-produced equipment will be the equipment of choice as networks get built out,” he said.
The issue of Huawei funding university research has been particularly sensitive in Canada, which has seen a political debate over the hundreds of patents Huawei has been granted thanks to Canadian research it has funded.
A similar debate has not yet taken place in the UK, although Oxford University suspended all research grants and donations from Huawei following a Telegraph report into the financial backing published last year.
Apart from the continued practice of university funding, other Chinese businesses have for years been systematically cloning Western software and hardware for sale in the Chinese market.
Earlier this month, it was reported that a cloned version of popular Nintendo smartphone game Fire Emblem Heroes had been approved by the government and was available for download on iPhones and Android phones.
The app had been reverse-engineered, with the only substantive change being the translation of the game’s text into Simplified Chinese.
Chinese businesses have also grown adept at copying hardware manufactured in Chinese factories.
These factories are given the blueprints for technology hardware, as well as prototype devices that can help to create cloned devices.
Quartz reported in 2016 that an entrepreneur who invented a smartphone case that folds out into a selfie stick was shocked to find a copy of his product on sale through Chinese websites at a cheaper price.
It’s an extremely common issue seen in Chinese factories, which are used to produce counterfeit products that have been designed to be as similar as possible to the original products. 
Often, the cloned products are sold online for a cheaper price.
The nature of China’s laws around foreign businesses are key to helping transfer technology from Western companies to China.
A report to the US Congress by the Department of Justice published in 2018 said that “China uses foreign ownership restrictions, such as joint venture requirements and foreign equity limitations, and various administrative review and licensing processes, to require or pressure technology transfer from US companies.”
Forcing the creation of joint ventures has meant that businesses wishing to operate in China have to transfer information to Chinese businesses, raising concerns that the products may be copied.
The report to Congress also described widespread hacking of computer networks in order to gain access to confidential information that would be extremely useful to Chinese businesses.
In 2014, the US government indicted five members of the Chinese military over charges that they hacked into the networks of large US power and steel companies in order to steal trade secrets.
These hacking attacks are a far cry from the more prosaic copying of devices like crowdfunded selfie sticks, but the ongoing hacks show a continued effort to promote Chinese businesses by handing them closely guarded trade secrets.
The promise of a new law that could grant businesses “fair treatment” inside China is seen as a step in the right direction, but Western businesses don’t anticipate an immediate end to the copying, cloning and hacking which has gone on for years.

Sino-American Female Accused of Stealing Trade Secrets for Chinese Venture

Theft by Sino-American involved chemical coatings for beverage containers
By Kate O’Keeffe and Aruna Viswanatha

Assistant Attorney General for the National Security Division John Demers spoke during a news conference about law-enforcement actions against China for economic espionage last year in Washington, D.C. 

A Chinese-born scientist was arrested on charges of trying to steal trade secrets from companies doing research with Coca-Cola Co. , with the intent to set up a competing venture in China and win a reward from a Chinese government-backed program, authorities said.
In an indictment made public Thursday, You Xiaorong was accused of using her employment at an Atlanta-based company and then at a Kingsport, Tenn.-based company to steal trade secrets for the chemical technologies used to coat the insides of cans and other food and drink containers.
The indictment, obtained from a federal grand jury in Tennessee, said the technologies You attempted to steal cost at least $119.6 million to develop.
You couldn’t immediately be reached for comment. 

The indictment didn’t name her former employers, but a Coca-Cola spokesman confirmed that she had previously worked there and that it was aware of her arrest.
The case is the latest in a series accusing China-linked actors of stealing from U.S. firms, both through on-the-ground espionage and cyberattacks. 

U.S. officials have said that the raiding of corporate secrets by China’s government and the country’s companies constitutes a top national-security threat. 

Experts estimates value the damage in the hundreds of billions of dollars annually.
The case against You “exemplifies the rob, replicate and replace approach to technological development,” said John Demers, who runs the Justice Department’s national security division.
He added that investigators are closely examining China’s use of programs like the “Thousand Talents Plan”—from which You sought backing—“to solicit and reward the theft of our nation’s trade secrets and intellectual property.”
The U.S. Energy Department said earlier this month that it would ban its scientists from participating in that program and others like it that pay scientists working abroad to bring information back to China.
Authorities said You is a naturalized U.S. citizen who was born in China. 

The technology that she stole related to chemical formulations for bisphenol-A-free (BPA-free) container coatings. 

Coca-Cola had agreements with a slew of firms to develop and test the technology after BPA was found to pose risks to human health.
As part of the conspiracy, You planned to transfer the technology stolen from Coca-Cola’s partners to a Chinese company that would both hire her and use her involvement in the deal to help her obtain award money from China’s “Thousand Talents” program.
Chinese national Liu Xiangchen, You’s co-conspirator at that Chinese firm, also was charged in the case. 

He also couldn’t immediately be reached for comment.
Eventually, You, Liu and an unnamed co-conspirator that prosecutors believe is a China-based relative of You planned to form a second Chinese company to use the stolen technology to compete with U.S. and other foreign firms.
As part of the elaborate plan, this second Chinese firm would form a joint venture with an Italian company to establish a market presence in China, trading on the Italian firm’s known manufacturing abilities.
After that Italian firm had helped establish the co-conspirators as a legitimate China-based manufacturer of the can coatings, this second Chinese firm would then build a lab to produce its own coatings with the stolen technology.
In another high-profile, China-related, trade-secrets case last month, prosecutors accused Huawei Technologies Co. of stealing information from T-Mobile US Inc. about a phone-testing robot known as “Tappy,” and of systematically offering bonuses to employees who were successful in stealing confidential information from other companies. 

A former Apple Inc. engineer also was arrested last month and accused of stealing information from Apple’s closely guarded self-driving-car project. 

The engineer has pleaded not guilty to the charges.

Huawei Sting Offers Rare Glimpse of the U.S. Targeting the Chinese Rogue Company

Diamond glass could make your phone’s screen nearly unbreakable—and the FBI enlisted its inventor after Huawei tried to steal his secrets. 

By Erik Schatzker

A prototype of Akhan Semiconductor’s Miraj Diamond Glass.

The sample looked like an ordinary piece of glass, 4 inches square and transparent on both sides. 

It’d been packed like the precious specimen its inventor, Adam Khan, believed it to be—placed on wax paper, nestled in a tray lined with silicon gel, enclosed in a plastic case, surrounded by air bags, sealed in a cardboard box—and then sent for testing to a laboratory in San Diego owned by Huawei Technologies Co. 

But when the sample came back last August, months late and badly damaged, Khan knew something was terribly wrong. 

Was the Chinese company trying to steal his technology?
The glass was a prototype for what Khan’s company, Akhan Semiconductor Inc., describes as a nearly indestructible smartphone screen. 

Khan’s innovation was figuring out how to coat one side of the glass with a microthin layer of artificial diamond. 

He hoped to license this technology to phone manufacturers, which could use it to develop an entirely new, superdurable generation of electronics. 

Akhan says Miraj Diamond Glass, as the product is known, is 6 times stronger and 10 times more scratch-resistant than Gorilla Glass, the industry standard that generates about $3 billion in annual sales for Corning Inc. 

“Lighter, thinner, faster, stronger,” says Khan, in full sales mode. 

Miraj, he promises, will lead to a “fundamental next level in design.”

Miraj Diamond Glass at Akhan’s headquarters in Gurnee

Like all inventors, Khan was paranoid about knockoffs. 

Even so, he was caught by surprise when Huawei, a potential customer, began to behave suspiciously after receiving the meticulously packed sample. 

Khan was more surprised when the U.S. Federal Bureau of Investigation drafted him and Akhan’s chief operations officer, Carl Shurboff, as participants in its investigation of Huawei. 

The FBI asked them to travel to Las Vegas and conduct a meeting with Huawei representatives at last month’s Consumer Electronics Show. 

Shurboff was outfitted with surveillance devices and recorded the conversation while a Bloomberg Businessweek reporter watched from safe distance.
This investigation, which hasn’t previously been made public, is separate from the recently announced grand jury indictments against Huawei. 

On Jan. 28, federal prosecutors in Brooklyn charged the company and its chief financial officer, Meng Wanzhou, with multiple counts of fraud and conspiracy. 

In a separate case, prosecutors in Seattle charged Huawei with theft of trade secrets, conspiracy, and obstruction of justice, claiming that one of its employees stole a part from a robot, known as Tappy, at a T-Mobile US Inc. facility in Bellevue, Wash. 

“These charges lay bare Huawei’s blatant disregard for the laws of our country and standard global business practices,” Christopher Wray, the FBI director, said in a press release accompanying the Jan. 28 indictments. 

“Today should serve as a warning that we will not tolerate businesses that violate our laws, obstruct justice, or jeopardize national and economic well-being.” 

Featured in Bloomberg Businessweek, Feb. 11, 2019.

If the new investigation bears fruit, it could, along with the indictments, bolster the Trump administration’s effort to block Huawei from selling equipment for fifth-generation, or 5G, wireless networks in the U.S. and allied nations. 

Huawei poses a national security threat because it could build undetectable backdoors into 5G hardware and software, allowing the Chinese government to spy on American communications and wage cyberwarfare. 

On the same day Wray’s statement was released, the government searched the Huawei lab in San Diego where Akhan’s glass had been sent. 

The FBI raid was a secret, but not to Khan and Shurboff, who’d been receiving regular briefings of the investigation’s progress through Akhan’s lawyer, Renato Mariotti, a well-known former prosecutor who’s now a partner at Thompson Coburn LLP. 

By then, they’d succeeded in getting Huawei representatives to admit, on tape, to breaking the contract with Akhan and, evidently, to violating U.S. export-control laws. 

Huawei did not respond to repeated requests for comment. 

This story is based on documents—including emails and text messages exchanged among Huawei, Akhan, and the FBI—as well as reporting from the sting operation in Las Vegas and interviews with Khan and Shurboff. 

Businessweek shared a detailed account of the investigation with the U.S. Attorney’s Office for the Eastern District of New York, which declined to comment. 

The FBI also declined to comment.
Khan’s work on diamond glass goes back to his college days, when he began learning about so-called nanodiamonds as a 19-year-old electrical engineering and physics student at the University of Illinois at Chicago. 

After graduation, he ran experiments at the Stanford Nanofabrication Facility and teamed up with researchers at the U.S. Department of Energy’s Argonne National Laboratory, eventually developing and patenting a way to deposit a thin coating of tiny diamonds on materials such as glass. 

He also licensed diamond-related patents for Akhan from the Argonne lab in 2014. 

By the following year, Khan was confident enough to start promoting his new technology. 

He joined the conference circuit, began giving interviews to trade publications, and hired Shurboff, who’d spent 25 years in various roles at Motorola Inc. 

It was time, Khan believed, to go to market.

Akhan founder and CEO Khan.

In the smartphone world, extra-strong display glass is a competitive advantage, like a fast processor or a really good camera. 

It’s been that way ever since Steve Jobs picked Corning to supply a screen for the first iPhone more than a decade ago. 

Reviewers marveled that the device could be shoved into a pocket full of keys and coins and its then-giant display would come out unscathed. 

To take on Corning, Akhan needed to convince the world’s big smartphone manufacturers—including Apple, Samsung, and Huawei—that its diamond-coated glass was even tougher than Gorilla Glass. 

In 2016, Shurboff began sending out samples from Akhan’s production facility in Gurnee, Ill., a Chicago suburb. 

He shipped the first one to Samsung; another early sample went to Huawei.
Even then, before Trump’s trade war and the indictments, the Huawei name carried plenty of baggage. 

In 2002, Cisco Systems Inc. accused Huawei of stealing source code for its routers. 

Motorola said in a 2010 lawsuit that Huawei had successfully turned some of its Chinese-born employees into informants. 

And in 2012 the U.S. House Intelligence Committee labeled Huawei a national security threat and urged the government and American businesses not to buy its products. 

The Cisco and Motorola lawsuits ended with settlements.
Since 2012, under pressure from the government, the major U.S. telecommunications companies have essentially blacklisted Huawei, refusing to carry its smartphones or use its equipment in their networks. 

But most of the world kept on buying from Huawei, choosing to ignore the allegations that the company has consistently denied. 

At the same time, U.S. tech companies have remained free to sell parts to Huawei. 

Qualcomm Inc. is one of Huawei’s big suppliers. 

So are Micron Technology Inc. and Intel Corp.
So there was nothing out of the ordinary when an email from Huawei came to Akhan on Aug. 8, 2016. 

The sender was Angel Han, a Huawei engineer in San Diego. 

In email exchanges and calls that followed, Han conveyed a sense of urgency. 

In one email on Nov. 7, 2016, Han said Huawei was “actively looking for new technologies for our innovative product in this fast pace [sic] consumer electronics industry,” according to a copy reviewed by Businessweek. 

“Vendor’s capability to move fast and deliver is also crucial for us.” 

Reached on a mobile phone number that appeared on text messages exchanged with Akhan, a woman who identified herself as Angel Han denied knowing anyone at Akhan; then, when she was presented with specific details about interactions with Akhan, she said, “I can’t recall.” 

Then she hung up.

Akhan COO Shurboff.

By February 2017, the two companies had a deal. 

Akhan would ship two samples of Miraj to Huawei in San Diego. 

According to a letter of intent, signed by both parties, Huawei promised to return any samples within 60 days and also to limit any tests it might perform to methods that wouldn’t cause damage. (The latter provision is standard in the industry and is designed to make it hard to reverse-engineer any intellectual property.) 

Shurboff noted in documents he sent to Han that Huawei had to comply with U.S. export laws, including provisions of the International Traffic in Arms Regulations, or ITAR, which govern the export of materials with defense applications. 

Diamond coatings are on the list because of their potential for use in laser weapons.
Khan and Shurboff decided early on that Akhan would license the first generation of its Miraj glass to a single handset maker, hoping the promise of exclusivity would give their startup some leverage. Huawei, Khan says, indicated it was eager to stay in the race, and on March 26, 2018, Akhan shipped an improved sample to Han. 

“We were very optimistic,” Khan says. 

“Having one of the top three smartphone manufacturers back you, at least on paper, is very attractive.”
The first sign of trouble came two months later, in May, when Huawei missed the deadline to return the sample. 

Shurboff says his emails to Han requesting its immediate return were ignored. 

The following month, Han wrote that Huawei had been performing “standard” tests on the sample and included a photo showing a big scratch on its surface. 

Finally, a package from Huawei showed up at Gurnee on Aug. 2.
Shurboff remembers opening it. 

It looked just like the package Akhan had sent months earlier. 

Inside the cardboard box was the usual protective packaging—air bags, plastic case, gel insert, and wax paper. 

But he could tell something was wrong when he picked up the case. 

It rattled. 

The unscratchable Miraj sample wasn’t just scratched; it was broken in two, and three shards of diamond glass were missing.
Shurboff says he knew there was no way the sample could have been damaged in shipping—all the pieces would still be there in the case. 

Instead, he believed that Huawei had tried to cut through the sample to gauge the thickness of its diamond film and to figure out how Akhan had engineered it. 

“My heart sank,” he says. 

“I thought, ‘Great, this multibillion-dollar company is coming after our technology. What are we going to do now?’”

The packaging for Akhan’s Miraj Diamond Glass.

Shurboff’s first call was to Khan. 

Then he went to the FBI, which had been cultivating relationships with even the smallest American tech companies as part of a crackdown on Chinese theft of intellectual property. 

Eight months earlier, in January 2018, a male FBI special agent in Chicago had paid a visit to Akhan in Gurnee. 

According to Shurboff, the agent told him that the bureau was hoping to educate local startups on cybercrime and security vulnerabilities and to encourage them to come forward with suspicious activity. 

The FBI specifically was trying to gather intelligence on Chinese efforts to obtain U.S. technology, the agent told Shurboff.
The conversation stuck in Shurboff’s mind. 

That August, two weeks after receiving the broken glass from Huawei, he drove down to the FBI’s Chicago field office, which was holding a seminar for area executives on corporate espionage. Shurboff watched as a female special agent discussed the case in which Huawei stole trade secrets from T-Mobile in 2012. 

During a break, Shurboff approached the agent and told her what had happened to Akhan. 

He mentioned that diamond coating was an ITAR-regulated material with defense applications and raised the possibility that the sample had been in the wrong hands. 

In addition to its work on smartphone glass, Akhan had been adapting its diamond technology for semiconductors and the military.

Shurboff

To many, Shurboff’s story might have sounded far-fetched. 

Not to the FBI. 

“They took a very keen interest immediately and wanted to know more,” he says. 

Things moved quickly. 

The Akhan executives found themselves on regular conference calls with officials from the FBI and the U.S. Department of Justice. 

Taking the lead on several of these calls was David Kessler, the assistant U.S. attorney in Brooklyn who, it turned out later, would prosecute Huawei’s CFO.
The two FBI agents picked up the broken sample in Gurnee and delivered it to the FBI’s research center in Quantico, Va. 

When Khan and Shurboff joined the group on a subsequent call, an FBI expert in forensic gemology briefed them on his findings. 

They recall the gemologist saying he’d analyzed the diamond glass sample and concluded that Huawei had blasted it with a 100-kilowatt laser, powerful enough to be used as a weapon.
Throughout the fall of 2018, the FBI agents asked Khan and Shurboff for emails, copies of non-disclosure agreements, letters of intent, shipping records, even the box Huawei used to return the sample that summer. 

The FBI had another request, too: Would they re-establish contact with Angel Han, the Huawei engineer?
On Dec. 10, while the FBI listened in, Shurboff and Khan say they spoke to Han by phone, quizzing her about the broken sample of diamond glass. 

What happened during the tests? 

Why were shards missing? 

Han told them she didn’t know, because the sample had been in China and was shipped directly to Akhan from there. 

This was a criminal violation of ITAR rules, but Han didn’t seem to realize or care. 

And instead of backing off, Han said Huawei wanted to continue talks about becoming Akhan’s first customer and proposed a face-to-face meeting a few weeks later at the Consumer Electronics Show in Las Vegas. 

She even offered to bring along a senior Huawei official from Shenzhen. 

Khan and Shurboff were flabbergasted. 

It was hard to tell who was playing whom.
The Akhan executives arrived in Las Vegas on Tuesday, Jan. 8, and checked in at the Mandalay Bay Resort & Casino. 

They’d arranged to meet Han and her colleague the following afternoon at 3 p.m. 

If all went according to plan, that would be the sting. 

The female FBI agent from Chicago, who’d flown in to oversee the operation, explained to Khan and Shurboff in text messages how it would work: The bureau was securing a room at the Las Vegas Convention Center, where the CES conference was taking place. 

It would be bugged, so the FBI could listen in from another location in the building. 

Shurboff brought signage to make it look like Akhan had rented the space.
At about noon on Jan. 9, the agent met with the Akhan executives and gave Shurboff three different covert recording devices to wear and carry as a backup plan. 

Shurboff texted Han: “We have a nice quiet conference room right off the Grand Hall if you like to meet there.” 

He noted it wasn’t far from the Huawei booth at CES. 

But at 2 p.m., Han responded by text, saying that she was at the Venetian Casino and couldn’t leave for at least another hour. 

That was a problem, because the FBI had the room for a limited time. 

Shurboff told Han to stay at the Venetian. 

He and Khan would meet her there.
They arrived just before 3 p.m. and texted Han a picture of their location, on the second floor of the Venetian by the escalator, right in front of Sin City Brewing. 

Khan was casually dressed in a dark peacoat, black button-up shirt, gray pants, and sneakers. Shurboff’s attire was more businesslike: a light blue dress shirt, gray sports jacket, black trousers, and brand-new leather shoes. 

Han showed up at 3:20 p.m. with a woman who introduced herself as Jennifer Lo, a senior supply manager with Huawei in Santa Clara, Calif. (The Shenzhen-based Huawei executive hadn’t come, they explained, because the company wasn’t allowing its senior Chinese executives to travel to the U.S.) 

The four of them chatted briefly, walked toward the food court at the Venetian, and took seats around a table at a Prime Burger. 

The Businessweek reporter watched from about 100 feet away, in front of a gelato stand. 

Khan and Shurboff had expected to conduct the sting in the safety and quiet of the FBI’s room at CES. 

Now, total rookies in the intelligence game, they had to remain calm while recording the conversation with Huawei in a noisy, crowded restaurant.
The hope had been that Lo, whom Khan guessed was in her early 40s, would have more to say about the destruction of Akhan’s sample and why Huawei was so interested in diamond film technology. Khan recalls her asking questions about the manufacturing capacity at Akhan’s pilot facility in Gurnee. 

She acknowledged that the sample glass had been to China but disputed that this had been an ITAR violation. 

Huawei had checked, and it was OK, she said. 

There was some tension, and at one point, Lo startled Khan and Shurboff by wondering aloud if the U.S. government was monitoring their meeting. 

As for the damaged sample, Lo, like Han, claimed ignorance. 

She was there to make sure Huawei still had a shot at being the first company to put diamond glass on a smartphone. 

If Akhan walked away, she said she might lose her job. (Reached on the mobile phone number on her Huawei business card, Lo confirmed her identity and said she was at CES to “meet with some suppliers.” When asked about the destruction of the sample and the shipment to China she said, “I’m not involved and cannot comment on this.”)
Over the next few days, Khan received an unsettling piece of news. 

During the Prime Burger meeting, Shurboff had coincidentally run into representatives from another big potential customer for Miraj glass. 

Feeling uneasy in his role as an FBI asset, he’d curtly brushed them off to return to the discussion with Huawei. 

Now the other customer seemed concerned that Akhan was trying to start a bidding war. 

Khan was determined not to lose a promising lead. 

Previously, he’d asked Businessweek to withhold the details of the sting operation until the government moved to indict Huawei or arrest someone. 

But, eager to explain the encounter at the Prime Burger and clear up any confusion, he’d changed his mind and decided to go public with Akhan’s story, as well as issue a statement about its cooperation with the FBI. 

“Akhan takes seriously any unlawful use of its technology,” an embargoed copy of the statement reads. 

The company, “will continue to cooperate with law enforcement and work towards an expedient resolution to this matter.”
The FBI raided Huawei’s San Diego facility on the morning of Jan. 28. 

That evening, the two special agents and Assistant U.S. Attorney Kessler briefed Khan and Shurboff by phone. 

The agents described the scope of the search warrant in vague terms and instructed Khan and Shurboff to have no further contact with Huawei.
Khan and Shurboff don’t know how the story will end. 

It’s possible that the government will conclude there aren’t grounds for an indictment against Huawei. 

Prosecutors also could decide that what happened to Akhan isn’t serious enough to seek charges. 

If that’s so, it raises a question about the broader U.S. crackdown on Huawei: Is it based on hard evidence of wrongdoing or driven by a desperation to catch the Chinese company doing something—anything—bad?
On the other hand, if the government does conclude that Akhan was attacked, that a Chinese multinational really did target a tiny Chicago company with no revenue and no customers (as of yet), it would show just how far and wide Huawei is willing to go to steal American trade secrets. 

“I think they’re identifying technologies that are key to their road map and going after them no matter what the size or scale or status of the business,” Khan says. 

“I wouldn’t say they’re discriminating.”

Rogue Nation

Everyone finally agrees China can't be allowed to take over the world
By James Jay Carafano

Oh my, how times have changed.
Huawei executives doing the perp walk. 

American universities shuttering Confucius Institutes. 

Voters in the Maldives, Sri Lanka and elsewhere rejecting leaders who have cozied up to China. Malaysia and others demanding better deals from Beijing or otherwise trying to dig their way out of the Chinese debt trap.
The days when people were OK with China taking over the world are coming to an end. 

Fast.
For years, supporters of Chinese policies argued that a rising China would grow to accept international norms and be a net contributor to global peace and prosperity. 

Meanwhile, critics made gloomy predictions that an increasingly powerful China would exert an increasingly destabilizing influence.
That argument is over.
Chinese telecom giant Huawei has become the posterchild for what’s wrong with China – and with good reason. 

Rather than act as a responsible global company from a responsible nation, Huawei has acted like a pirate on the high seas, abiding by no laws but its own. 

Now, the chickens are coming home to roost.
Headquartered in Shenzhen, Huawei Technologies Co. Ltd. describes itself as an “employee-owned” business, claiming that its approximately 80,000 employees hold almost 99 per cent of its stocks. However, the vast majority of those shares are controlled by a small group of people who enjoy close ties with the Chinese government and the Communist Party. 

Few people doubt that Huawei operates as an arm of the government, and U.S. intelligence agencies have warned American citizens not use the company’s products and services.
Meng Wanzhou, Hauwei’s chief financial officer, is under indictment for attempting to circumvent U.S. sanctions on Iran. 

She was arrested in December in Canada, and U.S. officials have now filed for extradition.
Separately, Huawei is also under indictment for engaging in illegal trading practices – mostly stealing stuff from T-Mobile. 

Stealing intellectual property from U.S. firms is nothing new for Chinese firms. 

Indeed, intellectual property theft is the centerpiece of the U.S. trade representative’s November report on Chinese business practices.
Oh, there are other charges as well, such as the Chinese government’s highly organized attempt to subvert international trade sanctions. 

But the trade report is replete with evidence that Huawei is not really a private company gone rogue. 

Rather, it appears to be just another corporate puppet on Beijing’s string, one deeply engaged in economic warfare.
But don’t blame the growing disenchantment with China on Huawei alone. 

It began two years ago, at the19th Chinese Communist Party Conference, when Xi Jinping laid out his expansive vision for China’s role in the global economy. 

His “Belt and Road Initiative” destined to encircle the world with Beijing’s golden tentacles; together with his expansive territorial claims, he surely caused the hearts of the party faithful to quicken.
But Xi also got the rest of the world rethinking the wisdom of handing China the keys to the global car.
Since then a great deal of research has been devoted to analyzing and illuminating China’s behavior. One notable report from Sharp Power explains how China manipulates information. 

Another, from the Center of International Private Enterprise, explains how China uses “corrosive capital” to undermine the rule of law and threaten democracy.
Today, countries that used to think of China as a benevolent checkbook are starting to question whether it was wise to turn over their telecom structure to a company that does the bidding of an aggressive foreign power with only its own interest at heart.
Now that China has the world’s attention, the question is: What’s next? 

This is no time for a new Cold War, but the Trump administration has been right to let China know that corrupt business practices and expansionist territorial claims will not go unchallenged. 

The U.S. can and must defend its interests for the long term.
The dust-up over Huawei aside, there’s a good chance the U.S. and China will cut a trade deal in the next 30 days. 

That would not be a bad thing. 

Even a limited deal, for a limited time, would show that Washington has Beijing’s attention, improve some market access for the U.S., and remove uncertainties from global markets.
As for dealing with rogue companies like Huawei, the U.S. should emphasize the necessity of abiding by the rule of law. 

Washington must not trade away criminal prosecutions in exchange for trade deals or other “concessions” from Beijing. 

When people break the law, they should be prosecuted for their crimes – not be used for negotiating “leverage.”
Similarly, per the Huawei/T-Mobile case, Chinese companies that steal trade secrets should be subject to the full range of legal punishments, including sanctions as well as criminal prosecutions.
Further, companies that knowingly use stolen intellectual property should be considered traffickers in stolen goods (a federal offense). 

Once convicted, they should be punished the way any company or individual would be for trafficking in stolen physical goods.
The world is wising up to Beijing’s “good guy” act. 

It’s time for China to pay the piper.

Rogue Company: Huawei Sinks Deeper As The World Turns Its Back

Governments worldwide have started to view Huawei's expansion as a serious threat
By David Volodzko

In this Jan. 9, 2019, photo, a security guard stands near the Huawei company logo during a new product launching event in Beijing. The Chinese Foreign Ministry said late Friday, Jan. 11, 2019, it is "closely following the detention of Huawei employee Wang Weijing" on charges of spying for China.

Huawei Technologies now faces shocking new charges, in addition to a growing litany of scandals, suggesting the world's second-largest smartphone maker is working with the Chinese military to steal our technology, defraud our institutions and spy on us using our own devices.
The company, its chief financial officer Meng Wanzhou and subsidiaries Skycom Tech and Huawei Device USA now face criminal charges for bank fraud, wire fraud, violating U.S. sanctions against Iran and conspiring to obstruct justice. 

Governments worldwide have started to view its expansion as a serious threat.
"It's been a longstanding concern of the U.S. intelligence community," former Director of National Intelligence James Clapper said, "that any of the Chinese IT and telecommunications companies like Huawei, like ZTE, for example, have to be considered as extensions of Chinese intelligence service — in fact, Chinese law encourages, if not mandates, that when called upon, these companies will cooperate with the Chinese government."
The latest charges claim Meng delivered a presentation to a bank executive in 2013, during which she repeatedly lied about Huawei's relationship with Skycom, which tried to sell U.S. technology to Iran despite sanctions. 

Then in 2017, when Huawei became aware of the U.S. investigation, Huawei Device USA tried to obstruct justice by attempting to move witnesses who knew about its operations in Iran back to China, where FBI agents couldn't interview them.
On December 1, Canadian officials arrested Meng for extradition to the United States. 

But Meng is the daughter of Ren Zhengfei, who formerly worked as a technology engineer for the Chinese military before founding Huawei, which makes her Chinese corporate royalty — and Chinese officials made no attempt to mask their outrage.
Days later, Chinese Vice Foreign Minister Le Yucheng summoned Canadian Ambassador to China John McCallum to protest Meng's arrest, calling it "vile in nature" and threatening Canada with "grave consequences."
China then arrested consultant Michael Spavor and former diplomat Michael Kovrig, both Canadian nationals, on charges of endangering state security. 

This past weekend, another Canadian national was arrested on fraud charges.
The pressure was enough to force some Canadian officials to openly question the government's move. “From Canada’s point of view," McCallum said at a charity lunch in Vancouver, "if [the U.S.] drops the extradition request, that would be great for Canada."
McCallum, an outspoken critic of his government's decision to arrest Meng, has previously said she has “strong arguments” to fight extradition. 

Canadian Prime Minister Justin Trudeau fired him after these recent remarks.
Meng remains detained in Vancouver, but the fraud allegations involving her are only part of Huawei's problems. 

The U.S. Justice Department has separately accused two Huawei affiliates of stealing trade secrets, wire fraud and obstruction of justice over violating agreements with T-Mobile in 2012 by secretly taking photos of its Tappy robot technology, which mimics human fingers to test smartphones, and stealing a piece so Huawei engineers could reverse engineer it.
North America isn't the only place turning its back on the company, either. 

Earlier this month, the Huawei sales director for Poland was arrested for espionage.
Australia's TPG Telecom has abandoned plans to build a new mobile telephone network that would have relied on Huawei technology. 

French European Affairs Minister Nathalie Loiseau said last week European states must stand united when dealing with Huawei.
And Vodafone has announced it is halting the purchase of Huawei technology for its new 5G networks in Europe.
But some are wondering why this awakening didn't take place sooner, since Huawei has for years been mired in scandal. 

In July 2012, vulnerabilities were found in its routers that could allow remote access to the devices. In early 2015, German cybersecurity company G Data reported it had found malware pre-installed on Lenovo, Xiaomi and Huawei smartphones enabling audio surveillance and location tracking. 

In January 2018, African Union officials accused China of hacking the computer system at its headquarters every night for the past five years. 

The building, located in Addis Ababa, Ethiopia, had been built by Chinese contractors — including Huawei.
Then there's a slew of accusations, such as that Huawei has provided surveillance equipment to the Taliban. 

Or the case of Shane Todd, the American engineer who apparently committed "suicide" in Singapore in June 2012 under suspicious circumstances, in connection with work he had been doing involving a semiconductor amplifying device purportedly for Huawei, with potential military applications.
Todd had evidently told his family the project could endanger U.S. national security, and that he felt he was in danger.
China continues to respond with denial and threats. 

Nation of Thieves

The Huawei indictment tells a story of deceit and corporate espionage
The Washington Post

Huawei chief financial officer Meng Wanzhou in Vancouver, British Columbia, on Dec. 12. 

HUAWEI, THE Chinese telecom giant, has insisted in recent years that it operates within the bounds of local and international laws and norms. 

When a former employee filed a legal claim alleging that he was directed by Huawei to steal rivals’ trade secrets, the firm declared, “Every employee is expected to adhere to applicable laws, regulations and business ethics in the countries where we operate.” 

But a new U.S. federal indictment issued this week alleges this was far from true.
Huawei, which makes smartphones as well as gear for connectivity, including the forthcoming super-fast 5G networks, has been largely barred from business in the United States for some time, partly over suspicions that it could build “back doors” into its equipment for spying or network mischief. Chinese companies are closely intertwined with, and required to be subservient to, the state. 

Concerns voiced in recent years about Huawei’s behavior now look prescient. 

Huawei’s approach resembles that of the Chinese state: It is unbound by a rules-based, law-governed international order, and it is determined to succeed by using theft and duplicity.
In one case described in the indictment unveiled Monday by the Justice Department, Huawei headquarters in China instructed its employees in the United States to steal the design of a mobile-phone-testing robot developed by T-Mobile. 

This was a valuable piece of intellectual property that Huawei wanted for its own robot. 

Huawei engineers were repeatedly encouraged to carry out theft, and on May 29, 2013, a Huawei engineer visiting T-Mobile slipped a robot arm into his bag and walked out of the laboratory. 

Overnight, he photographed the device and took critical measurements before returning it the next day, apologizing that it was taken by “mistake.” 

Later, Huawei responded to T-Mobile about the incident with gross deception, saying the thefts were “a moment of indiscretion” and did not reflect company policy when, in fact, the data had been sent to headquarters. 

Huawei even created a bonus program for workers who stole information from competitors.
This corporate deception is also behind the separate indictment of Huawei and its chief financial officer, Meng Wanzhou, the founder’s daughter, for bank and wire fraud. 

The indictment charges that Huawei misled the U.S. government and banks about business that violated Western sanctions against Iran. 

The legal proceedings against Meng, who is being held under house arrest in Canada pending an extradition request by the United States, should not be politicized in the current Sino-American trade dispute. 

It is clear Huawei intentionally snubbed its nose at international norms and laws, which in turn means it could pose a potentially large national security risk to the West.
Doubts about Huawei are now being heard elsewhere, including in Australia, Poland, Britain and Germany. 

The next generation of connectivity — 5G networks — is far too important to put in the hands of a company that may work by lies and coverups.

Rogue Nation, Rogue Company

Huawei and Meng Wanzhou Face Criminal Charges
By David E. Sanger, Katie Benner and Matthew Goldstein

The Justice Department unveiled charges against Meng Wanzhou, the chief financial officer of Huawei, for helping evade American sanctions on Iran.

WASHINGTON — The Justice Department unveiled sweeping charges on Monday against the Chinese telecom firm Huawei and its chief financial officer, Meng Wanzhou, outlining a decade-long attempt by the company to steal trade secrets, obstruct a criminal investigation and evade economic sanctions on Iran.
The pair of indictments, which were partly unsealed on Monday, come amid a broad campaign by the United States to thwart China’s biggest telecom equipment maker.
Officials have long suspected Huawei of working to advance Beijing’s global ambitions and undermine America’s interests and have begun taking steps to curb its international presence.
The charges underscore Washington’s determination to prove that Huawei poses a national security threat and to convince other nations that it cannot be trusted to build their next generation of wireless networks, known as 5G. 
The indictments, based in part on the company’s internal emails, describe a plot to steal testing equipment from T-Mobile laboratories in Bellevue, Wash.
They also cite internal memos, obtained from Meng, that link her to an elaborate bank fraud that helped Huawei profit by evading Iran sanctions.
The acting attorney general, Matthew G. Whitaker, flanked by the heads of several other cabinet agencies, said the United States would seek to have Meng extradited from Canada, where she was detained last year at the request of the United States.
The charges outlined Monday come at a sensitive diplomatic moment, as top officials from China are expected to arrive in Washington this week for two days of talks aimed at resolving a months long trade war between the world’s two largest economies.
Trump administration officials have insisted that Meng’s detention will not affect the trade talks, but the timing of the indictment coming so close to in-person discussions is likely to further strain relations between the two countries.
Meng is the daughter of Huawei’s founder and one of the most powerful industrialists in the country. Her arrest has outraged the Chinese government, which has since arrested two Canadians in retaliation.
The indictment now presents Canada with a politically charged decision: whether to extradite Meng to face the fraud charges, or make a political determination to send her back to Beijing.
A spokesman for Huawei, Joe Kelly, said it “is not aware of any wrongdoing by Meng, and believes the U.S. courts will ultimately reach the same conclusion.”
The indictment unsealed against Meng is similar to the charges leveled against the Huawei executive in filings made by federal prosecutors in connection with the bail hearing in Canada.
It claimed that Huawei defrauded four large banks into clearing transactions with Iran in violation of international sanctions through a subsidiary called Skycom.
Federal authorities did not identify the banks, but in an earlier court proceeding in Canada after Meng’s arrest, prosecutors had identified one of the banks as HSBC.
The most serious new allegation in the indictment, which could have bearing on the extradition proceeding in Canada, is the contention by federal prosecutors that Huawei sought to impede the investigation into the telecom company’s attempt to evade economic sanctions on Iran by destroying or concealing evidence.
Huawei moved employees out of the United States so they could not be called as witnesses before a grand jury in Brooklyn. 
The company destroyed evidence in order to hinder the inquiry.
Richard P. Donoghue, the United States attorney for the Eastern District of New York, said that the telecom firm’s actions began in 2007 and “allowed Iran to evade sanctions imposed by the United States and to allow Huawei to profit.”
The arrest of a top executive for sanctions evasion is unusual.
In 2015, Deutsche Bank was fined $258 million for violating American sanctions on Iran and Syria. No executives involved in the scheme were indicted, though six employees were fired.
Meng is under house arrest at one of two residences that she owns in Vancouver.
American officials said Monday that they will request her extradition before a deadline on Wednesday. 
The next stage of her case will be decided at the Supreme Court of British Columbia.
“Companies like Huawei pose a dual threat to both our economic and national security,” said Christopher A. Wray, the F.B.I. director, who joined Mr. Whitaker and two other cabinet members, Wilbur Ross, the commerce secretary, and Kirstjen Nielsen, the homeland security secretary.
Mr. Wray argued that “the magnitude of these charges make clear just how seriously the F.B.I. takes this threat.”
“Today should serve as a warning that we will not tolerate businesses that violate our laws, obstruct justice or jeopardize national and economic well-being,” he added.
Parts of the indictment were redacted and left open the question of whether the United States had secretly indicted Meng’s father, Ren Zhengfei, a former People’s Liberation Army officer and member of the Communist Party.
A United States government interview with Ren from 2007 is cited in one of the indictments, to make the case that he misled investigators, and the name of at least one of those indicted is blacked out from the publicly filed version of the indictment.
Mr. Whitaker fueled the speculation about an indictment of Ren when he told reporters on Monday that the criminal activity “goes all the way to the top of the company.”
The Justice Department also accused Huawei of conspiring to steal trade secrets from a competitor, T-Mobile.
The charges relate to a criminal investigation that stemmed from a 2014 civil suit between the two companies.
In that case, T-Mobile accused Huawei of stealing proprietary robotics technology that the telecom company used to diagnose quality-control issues in cellphones.
Huawei was found guilty in May 2017.
The indictment cited internal emails from Huawei and its American subsidiary that set up a bonus system for employees who could illicitly obtain the T-Mobile testing system.
“These are very serious actions by a company that appears to be using corporate espionage not only to enhance their bottom line but to compete in the world economy,” Mr. Whitaker said.
The legal drama now shifts to Canada, where the government has warned that it will not extradite Meng if it appears that the request is being made for political reasons.
Trump said after her arrest that he would consider using her case for leverage in the upcoming trade negotiations, which fueled speculation that the United States may be more interested in Meng’s value in winning trade concessions than in obtaining a conviction.
Canada’s ambassador to Beijing was fired over the weekend by Prime Minister Justin Trudeau for suggesting that the case against Meng was political and that Canada might accede to Chinese demands and return her home.
Mr. Whitaker declined to say Monday whether the White House would interfere in the criminal case against Meng.
But the array of officials present at the announcement was clearly intended to demonstrate a coordinated government effort to go after Huawei.
“Given the seriousness of these charges, and the direct involvement of cabinet officials in their rollout, today’s announcements underscore that there is a unified full-court press by the administration to hold China accountable for the theft of proprietary U.S. technology and violations of U.S. export control and sanctions laws,” said David Laufman, the former chief of the Justice Department’s counterintelligence and export control section.
The indictments could further complicate the trade talks that the administration is holding this week with Beijing.
The Trump administration is seeking significant changes to China’s trade practices, including what it says is a pattern of Beijing pressuring American companies to hand over valuable technology and outright theft of intellectual property.
“The Americans are not going to surrender global technological supremacy without a fight, and the indictment of Huawei is the opening shot in that struggle,” said Michael Pillsbury, a China scholar at the Hudson Institute who advises the Trump administration.
Lawmakers like Senator Mark Warner, Democrat of Virginia, who have long argued for action to be taken against Chinese technology providers including Huawei and ZTE, a smaller firm that has faced similar accusations, called the indictment “a reminder that we need to take seriously the risks of doing business with companies like Huawei and allowing them access to our markets.”
Mr. Warner said that he would continue to press Canada to reconsider using any Huawei technology as it upgrades its telecommunications network.
On Tuesday, American intelligence officials are expected to cite 5G investments by Chinese telecom companies, including Huawei, as a worldwide threat. 
And the United States has been drafting an executive order, expected in the coming weeks, that would effectively ban American companies from using Chinese-origin equipment in critical telecommunications networks.