Why Did the U.S. Government Indict Huawei?
by Jim Lundy
The truth is chasing Huawei and on January 29th, the U.S. federal government indicted Huawei on 29 counts for lying about its financial dealings with Iran and for stealing designs for a robot arm from T-Mobile.
All of this serves as a backdrop over the U.S. government’s goal of stopping the theft of trade secrets of U.S. companies. The other goal is to stop the rollout of Huawei’s 5G technology, which the U.S. claims serves as a spying network for the Chinese government.
Huawei Did Business with Iran via Two Subsidiaries
The U.S. indicted Huawei and Huawei CFO Meng Wanzhou about lying to the U.S. and an international bank about its ties with two subsidiaries, Huawei Device USA and Skycom Tech, to conduct business with Iran. Via its subsidiaries, Huawei is supplying equipment to Iran. Ms. Wanzhou is currently out of jail in Vancouver, Canada on a $10 million bond.
With the indictments now filed in the Eastern District in Brooklyn, New York, Wanzhou is facing some serious charges including bank fraud, wire fraud, and conspiracy to commit both bank and wire fraud. Given these new charges, it will be interesting to see when and how Wanzhou is extradited from Canada to the U.S. The actual U.S. indictment can be found here.
Huawei Stole T-Mobile’s Robotic Arm Design in Seattle
The latest charge of espionage against Huawei comes from the U.S. government indicting Huawei (see Aragon’s blog: Cyberwar Flashback: Remembering the Huawei Hacks of Cisco and Nortel). The added punch of the U.S. government filing charges in the Western District in Seattle ups the ante in this age of cyberwars and the race to steal information and technology from others.
Huawei is charged with stealing the designs for a robotic testing arm from T-Mobile and there is a lot of evidence in the indictment—including seven counts of wire fraud. Note, T-Mobile already won a settlement from Huawei and Huawei USA for the theft.
The charges show that Huawei pressured its employees to steal the information from T-Mobile. There were a limited number of Huawei USA employees that had security badges that gave them access to the T-Mobile facility. They snuck in an unauthorized Huawei employee from China and were caught. One of the Huawei USA employees later took the robot arm home with him to take pictures and measurements of the arm. After that, all Huawei employees were banned from T-Mobile facilities.
Lesson Learned: Banning Huawei Employees from All Facilities
The lesson learned from T-Mobile is simply that they should have acted sooner to ban access. Any firm doing business with Huawei needs to ban all access to all facilities until further notice. There is now too much public evidence to show that Huawei is in the business of theft of IP. It started long ago with the hack of Nortel.
Looking Ahead: Cyberwar Is Real
The U.S. is leading the charge to protect IP and stop the cyberwar that is going on. How well is your enterprise prepared? One question to ask yourself: have you let non-employees into any of your labs? If you have, you might want to revisit that policy. Developing.