U.S. Formally Accuses Huawei Executive of Helping Evade Iran Sanctions

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U.S. Formally Accuses Huawei Executive of Helping Evade Iran Sanctions

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The Justice Department unveiled charges against Meng Wanzhou, the chief financial officer of Huawei, for helping evade American sanctions on Iran.CreditCreditWang Zhao/Agence France-Presse — Getty Images

WASHINGTON — The Justice Department unveiled sweeping charges on Monday against the Chinese telecom firm Huawei, several subsidiaries and its chief financial officer, Meng Wanzhou, accusing the company of stealing trade secrets, obstructing justice and bank fraud by evading economic sanctions on Iran.

The pair of indictments shows the severity of the United States’ concerns about a Chinese telecom equipment maker the government has long suspected of working to advance Beijing’s global ambitions and undermine America’s interests.

The indictments claim that Huawei, its affiliate in Iran and Ms. Meng committed a host of crimes, including stealing trade secrets and obstruction of justice.

The acting attorney general, Matthew G. Whitaker, flanked by the heads of several other cabinet agencies, said the United States would seek to have Ms. Meng’s extradition from Canada, where she was detained last year at the request of the United States.

The indictment partly unsealed Monday by the Justice Department charged that Huawei had defrauded four large banks into clearing transactions with Iran in violation of international sanctions. Federal authorities did not identify the banks, but in an earlier court proceeding in Canada after Mr. Meng’s arrest in December, prosecutors had identified one of the banks as HSBC.

The authorities introduced into court in Vancouver a presentation that Ms. Meng had given to HSBC and some of the other banks in order to convince them that Huawei had severed its ties with Skycom.

The indictment also charged Huawei with conspiracy to obstruct justice by moving employees out of the United States so they could not be called as witnesses before a grand jury in Brooklyn. The authorities said the company had 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.”

Ms. Meng recently retained Reid Weingarten, a leading white-collar lawyer at Steptoe & Johnson in Washington, to represent her if Canada extradites her to the United States. Mr. Weingarten was not immediately available for comment.

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 civil 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.

“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.

Ms. Meng, the daughter of Huawei’s founder and one of China’s most high-profile executives, was arrested at the request of American law enforcement in early December while changing planes in Vancouver. She has been living under surveillance in Canada since.

“For years, Chinese firms have broken our export laws and undermined sanctions, often using the U.S. financial system to facilitate their illegal activities,” said Wilbur Ross, the commerce secretary. “This will end.”

“We are once again putting the world on notice that we will do everything in our power to stop those that disregard U.S. law,” he added.

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 monthslong trade war between the world’s two largest economies. Trump administration officials have insisted that Ms. 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.

The Trump administration has engaged in a sweeping crackdown on China, which it accuses of engaging in unfair trade practices, cyberespionage and outright theft of American technology to advance Beijing’s economic and political goals. Huawei, which is China’s largest telecom company, has been front and center in the administration’s campaign to thwart China’s technological dominance. The United States has embarked on a global campaign to block Huawei from providing the backbone of the next generation of wireless technology, known as 5G, saying the company poses risks to national security.

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.

Whether Canada agrees to extradite Ms. Meng to the United States is not certain, and officials there will be paying close attention to trade talks for any indication that her detention is being used as a bargaining chip in the negotiations.

President Trump had previously publicly toyed with the idea of granting Ms. Meng freedom if it would help secure a trade deal, much to the dismay of law enforcement officials. Doing so could give Canada reason not to extradite her on the grounds that the United States is politicizing a sanctions enforcement case, rather than pursuing a straightforward legal matter.

Katie Benner and Alan Rappeport reported from Washington, and Matthew Goldstein from New York. Kate Conger contributed reporting from San Francisco.

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