The U.S. government is pushing ahead with plans to extradite Huawei executive Meng Wanzhou from Canada, accusing her of being part of a decade-long conspiracy by the Chinese tech company to circumvent U.S. sanctions on Iran and deceive both the FBI and Congress.
Officials unveiled an indictment against Ms. Meng, Huawei Technologies Co. Ltd., and two of its subsidiaries on Monday containing 13 charges ranging from fraud to money laundering to obstruction of justice, laying out the extent of the case in detail for the first time.
Prosecutors also announced a second case against the company, in which they accused Huawei employees of trying to steal the design of a robot named “Tappy” from T-Mobile USA Inc. – a practice they allege was encouraged by Huawei managers, who offered bonuses to workers who could steal trade secrets from rival firms.
“Criminals and bad actors can be certain that they will not get away with criminal activity,” acting Attorney-General Matthew Whitaker said at a Washington press conference announcing the charges. “Those who do business in the United States can also be certain the Department of Justice will protect them from criminals, no matter how powerful or influential they are.”
Mr. Whitaker also said he was “deeply grateful” to the Canadian government for arresting Ms. Meng on behalf of the United States last month. Ms. Meng is out on bail in Vancouver. On Monday, Ottawa said it had received a formal extradition request.
China’s foreign ministry responded Tuesday, saying it will defend its companies and demanding that the U.S. “stop the unreasonable crackdown” on Huawei.
The moves come in the midst of a clampdown on Huawei in the United States, which has already banned the telecommunications company from supplying equipment for its next generation of cellular networks.
They also buttress Canada’s argument that Ms. Meng’s arrest was in accordance with the rule of law, not a capricious political request. But the seriousness in the United States about prosecuting her case also means it likely will not be finished any time soon – leaving the fates of three Canadians in China up in the air.
The indictments come the same week Chinese officials are due in Washington for negotiations to end President Donald Trump’s trade war with the country. But officials on Monday insisted the two situations had nothing to do with each other. “Anyone trying to connect dots is looking for something that’s not there,” Mr. Whitaker said.
The indictment of Ms. Meng relates to an alleged plot that began in 2007 to obscure Huawei’s business in Iran and trick several financial institutions into handling financial transactions for the company and unwittingly violating sanctions themselves. In that year, prosecutors say, Huawei falsely claimed it had transferred ownership of its subsidiary Skycom, which later did business in Iran, to an unrelated company.
In July, 2007, the indictment alleges, Huawei’s founder falsely told the FBI his company had no direct dealings with Iran and was not breaking any U.S. export laws. The founder, who is not named in the indictment, is Ms. Meng’s father, Ren Zhengfei. In September, 2012, another Huawei executive lied to Congress about the company’s business in Iran, the prosecutors say.
When Huawei found out it was under investigation in 2017, the indictment says, the company moved potential witnesses out of the United States and destroyed evidence.
And Ms. Meng is accused of falsely telling an executive with one of Huawei’s banks in the summer of 2013 that her company was complying with sanctions on Iran, and misrepresenting the nature of the subsidiary. Investigators say they found a document outlining Ms. Meng’s talking points for the meeting with the executive on an electronic device she was carrying when arriving at John F. Kennedy airport in New York early the following year. No detail was provided on how investigators got access to the device.
The second indictment accuses Huawei engineers of illicitly taking photographs of “Tappy” – designed to test new phones at a T-Mobile facility in Washington state – and removing the robot’s arm in a bid to take it apart to determine how it worked. Huawei claimed the incident was the work of renegade employees, but prosecutors allege they found encrypted e-mails in which the company offered incentives for engineers to steal other companies’ intellectual property.
A senior Canadian government official told The Globe and Mail the U.S. charges should demonstrate to Canadians that Huawei is a much larger issue than the case of Ms. Meng. The official, who was granted anonymity to speak candidly, said the United States regards Huawei as serious national security risk.
The official said the U.S. charges against Ms. Meng will not change the government’s approach to her case, that the extradition request will be decided by Canadian courts. If a Canadian judge rules she should be extradited, the final decision on whether to send her to the United States will be made by Justice Minister David Lametti and the federal cabinet, the official said.
At Ms. Meng’s home in Vancouver on Monday, members of the CFO’s security detail, wearing pea coats and sunglasses, stood outside chatting. At one point, a man bearing a tray of coffee arrived. Passersby stopped outside the house to take selfies, while someone on the second storey appeared to film the crowd outside through a crack in the blinds.
At Ms. Meng’s lawyer’s office, Mr. Whitaker’s news conference could be heard on television. An assistant said there would be no comment.
Jorge Guajardo, a former Mexican ambassador to China, said Monday that the two cases against Huawei help Canada by showing that the arrest of Ms. Meng was not a political move in Mr. Trump’s trade fight with Beijing, but the result of a substantial investigation.
“It gives Canada a lot of credibility: They were not just being used by the United States to pressure China, but acting in accordance with a serious criminal issue,” he said. “These are well-documented criminal charges.”
In the immediate term, it was unclear what effect the prosecution of the U.S. case would have on the Canadians subject to China’s apparent retaliation for Ms. Meng’s arrest: former diplomat Michael Kovrig and entrepreneur Michael Spavor, arrested in China and held without charge, and Robert Schellenberg, a convicted drug trafficker whose sentence was abruptly upgraded from prison to death.
The United States is already pressing Canada and other allies to bar Huawei from their 5G mobile networks. The official said Canadian security officials are still reviewing whether to do that. Cabinet will make the final decision, the official said.
“There is ample evidence to suggest that no major Chinese company is independent of the Chinese government and Communist Party,” Mark Warner, the top Democrat on the Senate intelligence committee, said in a statement to The Globe. “I will continue to strongly urge our ally Canada to reconsider Huawei’s inclusion in any aspect of its 5G infrastructure.”
The charges against Huawei alone demonstrate the risks of doing business with the company.
“We’re in a tech cold war; this is what it looks like,” Mr. Guajardo said. “It’s just going to get uglier.”
With reports from Andrea Woo in Vancouver and Bill Curry in Ottawa