Huawei dragged to court over alleged fraudulent deal

In what seems like a new turn to the United States’ battle with Chinese Company, Huawei, the United States Department of Justice has dragged the company to court over alleged fraudulent business dealings.

Among the 16 charges, the US brought against Huawei is the conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act (RICO) statute. Huawei was said to have used confidential agreements with American companies over the past two decades to access the trade secrets of those companies, only to allegedly misappropriate the intellectual property and use it to fund its business.

The Department of Justice listed multiple examples of Huawei’s alleged conspiracy to steal U.S. intellectual property in a statement. The Chinese company was also charged with lying to federal investigators and obstructing the investigation into the company’s activity.

“As part of the scheme, Huawei allegedly launched a policy instituting a bonus program to reward employees who obtained confidential information from competitors. The policy made clear that employees who provided valuable information were to be financially rewarded.”

Huawei’s response: In response to the indictment, the firm released a statement saying that the charges by the Justice Department were done in an effort to damage its reputation and its business for reasons relating to competition rather than law enforcement.

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“This new indictment is part of the Justice Department’s attempt to irrevocably damage Huawei’s reputation and its business for reasons related to competition rather than law enforcement. 

“The ‘racketeering enterprise’ that the government charged today is nothing more than a contrived repackaging of a handful of civil allegations that are almost 20 years old and that has never been the basis of any significant monetary judgment against Huawei.

“The government will not prevail on these charges which we will prove to be both unfounded and unfair,“ the statement read.

Meanwhile, the Chief Financial Officer, Huawei, Meng Wanzhou, is allegedly placed under house arrest in Canada while she faces fraud charges. If found guilty, Wanzhou risks up to 30 years in prison.

What you should know: The United States and China have been embroiled in a bitter trade war for quite a while now and Huawei has been stuck in the middle of it. The company was said to have posed a security threat to the United States as it allegedly worked on behalf of the Chinese government, according to a report published by the US House Intelligence Committee.

Though Huawei said it operates independently of the Chinese government and has repeatedly denied allegations of spying, the US has passed over the company for broadband and wireless contracts, and the Trump administration has tried to pressure countries to stop buying telecommunications equipment from Huawei.