Huawei Pleads Not Guilty to Racketeering in Beefed-Up U.S. Case

(Bloomberg) -- Huawei Technologies Co. pleaded not guilty Wednesday to racketeering charges filed last month by U.S. prosecutors who accused the Chinese telecommunications equipment giant of a 20-year pattern of corporate espionage.

The company had called the charges “unfounded and unfair” prior to entering its plea Wednesday in federal court in Brooklyn, New York.

Huawei and Chief Financial Officer Meng Wanzhou already were facing charges that they evaded U.S. sanctions on Iran and lied to American authorities. Prosecutors in February unveiled a revised indictment that seeks a stiff punishment under federal racketeering law for the company's alleged conspiracy to steal intellectual property from a half dozen U.S. firms over the years.

The escalation of the criminal case comes as the Trump administration continues to brand Huawei a threat to national security while the company competes in the global battle for supremacy in fifth-generation wireless technology, or 5G.

Read More: Racketeering Hammer Gives U.S. Legal Boost Against Huawei

The charges are likely to increase tensions between Beijing and Washington, which has accused Huawei of spying for the Chinese government, even as the company won a brief reprieve from a proposed ban on buying parts in the U.S.

The revised indictment doesn't name the businesses from which Huawei allegedly stole intellectual property. But details of the allegations match descriptions of Cisco Systems Inc., Motorola Inc., T-Mobile US Inc. and Cnex Labs Inc. Several related cases involving Huawei, including one in Seattle and another in Brooklyn, are also pending.

Huawei has said the new accusations rest on “recycled civil disputes from the last 20 years that have been previously settled, litigated, and in some cases, rejected by federal judges and juries.” The 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.”

Meanwhile, Meng, the eldest daughter of Huawei's billionaire founder Ren Zhengfei, continues to fight extradition from Canada over charges that she helped the company violate U.S. economic sanctions against Iran. She argues that the charges are politically motivated.

The case is U.S. v. Huawei Technologies Co., 18-cr-457, U.S. District Court, Eastern District of New York (Brooklyn).

To contact the reporter on this story: Patricia Hurtado in Federal Court in Manhattan at pathurtado@bloomberg.net

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Peter Blumberg, Peter Jeffrey

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