Racketeering: Huawei’s New York trial centers on alleged technology theft and sanctions violations

The racketeering trial of Huawei Technologies is underway in federal court in Brooklyn, New York. Prosecutors allege that the Chinese technology company carried out a decades-long scheme involving trade-secret theft, fraud, sanctions violations and surveillance-related business; Huawei has pleaded not guilty, and no verdict has been reported.

Huawei’s New York trial centers on alleged technology theft and sanctions violations

Jury selection began Tuesday, Sept. 8, before U.S. District Judge Ann M. Donnelly in the Eastern District of New York. Huawei faces 14 counts, including racketeering, bank fraud, wire fraud and trade-secret theft. The indictment covers alleged conduct dating from roughly 1999 to 2020, according to the South China Morning Post and Quartz.

The prosecution alleges that Huawei and subsidiaries used a Hong Kong company called Skycom to conduct business involving Iran, acquire restricted U.S. goods and technology, and route transactions through the international banking system. Prosecutors also accuse Huawei of doing business in North Korea despite U.S. sanctions, conspiring to obtain trade secrets from five U.S. technology companies, and providing surveillance equipment that Iranian authorities used during the 2009 demonstrations in Tehran. Those claims come from the indictment and prosecution case as described by the Associated Press report published by Broadband Breakfast and Quartz.

Opening statements began after jury selection. Federal prosecutors described multiple alleged crimes over about two decades, while Huawei’s defense argued that the government was combining isolated incidents and the actions of individual employees into a claim of a companywide criminal enterprise. The defense also criticized the reliability and motives of witnesses and pointed to Huawei’s engineering, investment and competition as explanations for its growth, according to NBC News.

What the prosecution is expected to prove

The government’s case includes allegations that Huawei stole technology from American companies and misused the U.S. financial system. One early witness, Parham Baheshti, testified that he provided information to the U.S. government about his dealings with Huawei after working for an Iranian company involved in expanding internet access. He said he became concerned that Huawei was interested in analyzing how Iranian people behaved online, according to NBC News.

The case also includes the company’s dealings with HSBC. U.S. prosecutors previously accused Huawei Chief Financial Officer Meng Wanzhou of misleading the bank about Huawei’s relationship with Skycom and its Iran-related business. Meng was arrested in Canada in 2018 on a U.S. extradition request and returned to China in September 2021 after an agreement that also involved the release of two Canadians held by China. The United States withdrew its extradition request and said it would dismiss the fraud charges against her, according to Broadband Breakfast and Quartz.

The prosecution has also indicated it will present evidence that a Huawei employee photographed a competitor’s product at a trade show. Huawei’s lawyer said the employee was fired and argued that the incident did not demonstrate a broader corporate conspiracy, NBC News reported.

Huawei’s position and what remains unresolved

Huawei has pleaded not guilty to all 14 counts. Its lawyers have sought to dismiss the case, arguing that the allegations are too vague, improperly apply U.S. law to conduct overseas, and do not adequately establish domestic wire or bank fraud. The company has called the government’s broader account “demonstrably false,” according to Broadband Breakfast and Quartz.

Judge Donnelly told potential jurors to remain fair and impartial and said that China, the Chinese Communist Party and the U.S.-Iran conflict were not themselves on trial, according to the South China Morning Post.

The trial is continuing in Brooklyn. Available reporting establishes the allegations, the company’s not-guilty plea and the start of testimony, but it does not establish whether Huawei will be convicted or how the jury will resolve the competing accounts.