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Huawei Said to Be Under U.S. Investigation in Trade-Secrets Case


WASHINGTON — Federal prosecutors in Seattle are investigating Huawei, the Chinese technology giant, on allegations of intellectual property theft, according to two people familiar with the case.

The criminal investigation is related to a civil suit between Huawei, one of the world’s largest telecommunications equipment and smartphone makers, and the telecom provider T-Mobile, according to the two people, who requested anonymity because they were discussing an active investigation.

In that civil case, filed in 2014, Huawei was accused of stealing intellectual property related to a robot that T-Mobile used to diagnose quality control issues in mobile phones. A jury found Huawei guilty in May 2017.

The criminal inquiry is looking at some of the same issues as the civil case, according to one of the people with knowledge of the investigation.

Lawmakers are also pressuring Huawei. A new bill introduced on Wednesday would ban the export of American technology to Chinese telecommunications companies that have broken U.S. sanctions, including Huawei and its smaller Chinese rival ZTE.

Because the companies make wide use of an array of American parts, like microchips, the bill could have a major impact on their business. A similar ban last year, following a finding that ZTE had violated American sanctions, effectively shut the Chinese company down before the Trump administration lifted it.

“Both companies have repeatedly violated U.S. laws, represent a significant risk to American national security interests and need to be held accountable,” said Chris Van Hollen, a Democratic senator from Maryland and one of the sponsors of the bill, in a statement.

The bill, called the Telecommunications Denial Order Enforcement Act, was also sponsored in the Senate by Senator Tom Cotton, a Republican from Arkansas. In the House of Representatives, it was sponsored by Mike Gallagher, a Wisconsin Republican, and Ruben Gallego, an Arizona Democrat.

The charges in Seattle had hung over Huawei for much of last year, as various other crises were unfolding for the company. The charges were due to pass the statute of limitations last year, but the case was extended.

In plea negotiations last year, Huawei faced the prospect of pleading guilty to a criminal charge of theft of a trade secret and agreeing to some sort of compliance plan, according to one of the people who spoke on the condition of anonymity.

If the case is resolved with a plea agreement, Huawei will most likely plead guilty to a criminal charge of theft of a trade secret and have to agree to some sort of compliance plan, the person said.



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