Defense argues Huawei ‘earned its success’ through innovation
Federal prosecutors opened a racketeering and bank fraud trial against China’s Huawei Technologies on Wednesday in Brooklyn federal court, with a Justice Department trial attorney telling jurors that the company built its global telecommunications empire through theft and deception.
Taylor Stout, a Department of Justice trial attorney, delivered the government’s opening statement before Judge Ann Donnelly on September 9. “Theft, lies, cover-up,” Stout said. “For 20 years, that’s how Huawei, a massive Chinese telecommunications company, victimized American companies and abused the American financial system, all in an effort to dominate the telecommunications industry around the world.”
Stout described a pattern in which Huawei conspired to steal trade secrets from five US companies, including operating system source code for internet routers from Cisco Systems and a robotic arm used to test phones from T-Mobile. “We’ll hear from people who caught Huawei red-handed trying to steal American tech,” Stout said, citing video of an employee taking the T-Mobile robotic arm.
Huawei’s defense team offered a sharply different account. Brian Heberlig, one of Huawei’s lawyers, told jurors the case involved routine business activity that prosecutors were mischaracterizing. “It’s about competition, not conspiracy. Innovation, not theft. Ordinary business dealings, not criminal conduct,” Heberlig said. “Huawei earned its success … There was no blueprint for crime.”
Heberlig said the incidents involving Cisco and T-Mobile were “actions by individual employees” and that company management worked to address them after learning what had happened. Prosecutors, he warned, “will twist those ordinary activities to try to make them look criminal.”
The trial, expected to last three months, grew from a 2018 indictment that charged Huawei and its chief financial officer with bank fraud and sanctions violations for allegedly misrepresenting its business in Iran. According to the prosecution, the company moved millions of dollars through the US financial system while circumventing US sanctions. The case has since expanded into a racketeering prosecution under a statute targeting patterns of illegal activity conducted by an enterprise to generate profit.
In 2018, Huawei chief financial officer Meng Wanzhou was detained in Vancouver on a US warrant. She fought extradition for nearly three years before being freed to return to China under a diplomatic agreement involving the United States, China, and Canada.
The charges against Meng were dismissed in 2022 as part of a deferred prosecution agreement, but admissions she made are set to be introduced as evidence at the current trial.
Prosecutors also accused Huawei of keeping its work in Iran secret to launder US dollars through the financial system and to help the Iranian government spy on its own citizens. The defense said there was no evidence Huawei knew the dollar-clearing would violate US sanctions law.
Huawei is known for its telecommunications equipment, mobile phones, and, in more recent years, AI chips. The company does business globally, but its networking gear is restricted in the United States, and suppliers are barred from exporting US goods and technology to the company without approval from the Department of Commerce.
On Thursday, a Chinese foreign ministry spokesperson said Beijing “firmly opposes the US side’s suppression and containment of Chinese enterprises” when asked about the case and the “criminal enterprise” description used by the prosecutor. China “firmly supports Chinese enterprises in safeguarding their legitimate rights and interests,” the spokesperson said at a regular press conference.