US judge says China’s Huawei Technologies must face criminal case for racketeering and other charges

A U.S. judge has ruled that China’s Huawei Technologies, a leading telecoms equipment company, must face criminal charges in a wide reaching case alleging it stole technology and engaged in racketeering, wire and bank fraud and other crimes.

U.S. District Judge Ann Donnelly on Tuesday rejected Huawei’s request to dismiss the allegations in a 16-count federal indictment against the company, saying in a 52-page ruling that its arguments were premature.

The company did not immediately respond to a request for comment.

The U.S. accuses Huawei and some of its subsidiaries of plotting to steal U.S. trade secrets, installing surveillance equipment that enabled Iran to spy on protesters during 2009 anti-government demonstrations in Iran, and of doing business in North Korea despite U.S. sanctions there.

During President Donald Trump’s first term in office, his administration raised national security concerns and began lobbying Western allies against including Huawei in their wireless, high-speed networks.

In its January 2019 indictment, the Justice Department accused Huawei of using a Hong Kong shell company called Skycom to sell equipment to Iran in violation of U.S. sanctions and charged its chief financial officer, Meng Wanzhou, with fraud by misleading the HSBC bank about the company’s business dealings in Iran.

Meng, the daughter of Huawei’s founder, was arrested in Canada in late 2018 on a U.S. extradition request but released in September 2021 in a high-stakes prisoner swap that freed two Canadians held by China and allowed her to return home.

Chinese officials have accused the U.S. government of “economic bullying” and of improperly using national security as a pretext for “oppressing Chinese companies.” In their motion to dismiss the broad criminal case, among other arguments Huawei’s lawyers contended that the U.S. allegations were too vague and some were “impermissibly extraterritorial,” and do not involve domestic wire and bank fraud.

The biggest maker of network gear, Huawei struggled to hold onto its market share under sanctions that have blocked its access to most U.S. processor chips and other technology. The limits led it to ramp up its own development of computer chips and other advanced technologies.

The company also shifted its focus to the Chinese market and to network technology for hospitals, factories and other industrial customers and other products that would not be affected by U.S. sanctions.

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