BROOKLYN, N.Y. — Federal prosecutors are accusing Chinese telecommunications giant Huawei Technologies of operating what they describe as a decades-long criminal enterprise that stole American technology, deceived financial institutions and conducted business connected to sanctioned countries as one of the most consequential corporate criminal trials in recent U.S. history unfolds in federal court in Brooklyn.
The racketeering trial began Sept. 9 in the U.S. District Court for the Eastern District of New York before U.S. District Judge Ann Donnelly. Huawei faces 12 felony charges stemming from allegations that its efforts to become a dominant global telecommunications company included theft of trade secrets, bank and wire fraud and violations connected to U.S. sanctions against Iran.
Justice Department trial attorney Taylor Stout summarized the government’s case for jurors with three words: “Theft, lies, cover-up.”
“For 20 years, that’s how Huawei, a massive Chinese telecommunications company, victimized American companies and abused the American financial system,” Stout told the jury, according to Reuters. Prosecutors allege the objective was to help Huawei dominate the global telecommunications industry.
The accusations are sweeping, but they remain allegations. Huawei has pleaded not guilty and denies operating a criminal enterprise.
So, who exactly is Huawei?
Huawei Technologies Co. Ltd. is a Chinese telecommunications and technology corporation headquartered in Shenzhen, China. Founded in 1987, it grew into the world’s largest supplier of telecommunications network equipment and today operates in more than 170 countries and regions, employing approximately 210,000 people.
Its business extends far beyond smartphones.
Huawei builds the infrastructure behind telecommunications networks, including 5G equipment, networking systems and other technology used to move enormous amounts of digital information. That global footprint has made the company commercially powerful while also placing it at the center of years of national-security disputes between Washington and Beijing.
Huawei is prohibited from selling telecommunications equipment to U.S. carriers because of U.S. government concerns that its equipment could pose national-security risks. Huawei has disputed U.S. accusations concerning its security threat.
The company itself — rather than individual Huawei executives — is the defendant currently standing trial. Contrary to some reports describing executives as defendants in the current proceeding, recent reporting on the trial states that no individuals are presently charged in this case.
The Justice Department’s original case, however, previously included Huawei Chief Financial Officer Meng Wanzhou, one of the most prominent executives in China’s technology industry and the daughter of Huawei founder Ren Zhengfei.
Meng was arrested in Vancouver, Canada, in December 2018 at the request of U.S. authorities. Prosecutors accused her of misleading financial institutions about Huawei’s relationship with Skycom Tech Co. Ltd., a company conducting business in Iran.
Meng entered into a deferred prosecution agreement with the Justice Department in 2021. As part of that agreement, she acknowledged making materially false statements to a senior executive of a financial institution concerning Huawei’s business operations in Iran. She later returned to China, and the charges against her were dismissed after she complied with the agreement. Her admissions are expected to play a role in the Huawei trial.
Prosecutors allege American technology was targeted
The government’s case extends well beyond Iran.
Prosecutors told jurors that Huawei conspired to steal trade secrets from five American companies. Among the allegations are attempts to obtain Cisco Systems source code used in internet routers and technology involving a robotic arm developed by T-Mobile to test smartphones.
The Justice Department’s broader indictment alleged Huawei and its subsidiaries engaged in a long-running effort to misappropriate intellectual property from American technology companies through fraud and deception.
The allegations include an extraordinary claim about Huawei’s corporate culture: Prosecutors have alleged that employees could receive incentives for obtaining confidential information from competitors.
The government has also alleged that a Huawei employee entered another company’s booth during a trade show and photographed networking equipment without authorization.
Prosecutors say those incidents were not isolated acts by rogue employees. Their central argument is that the alleged conduct formed part of a broader corporate strategy.
Huawei says that characterization is false.
Huawei: ‘Competition, not conspiracy’
Huawei attorney Brian Heberlig presented jurors with a sharply different interpretation of the evidence.
“It’s about competition, not conspiracy,” Heberlig said during opening statements. “Innovation, not theft. Ordinary business dealings, not criminal conduct.”
The defense argues prosecutors have taken unrelated business disputes and incidents spanning many years and attempted to combine them into a single criminal conspiracy.
That distinction will be central to the trial because prosecutors are relying on the federal Racketeer Influenced and Corrupt Organizations Act, commonly known as RICO.
RICO is frequently associated with organized crime prosecutions, but the statute can also be used against businesses and other organizations when prosecutors allege participants conducted an enterprise through a continuing pattern of specified criminal activity.
The Justice Department first added the RICO conspiracy allegation against Huawei in a 2020 superseding indictment. That indictment named Huawei Technologies and several subsidiaries, including Huawei Device Co. Ltd., Huawei Device USA Inc., Futurewei Technologies Inc. and Skycom Tech Co. Ltd.
Iran allegations go beyond sanctions
Some of the most serious testimony concerns Huawei’s activities in Iran.
The indictment alleged Huawei assisted the Iranian government with domestic surveillance, while prosecutors have presented evidence concerning technology allegedly capable of monitoring users of Iranian telecommunications networks.
Parham Baheshti, a former engineer for Iranian telecommunications company Mobinet, testified that Huawei worked with Iranian intelligence to create a surveillance system capable of monitoring users of Mobinet’s wireless network.
Huawei’s attorneys countered that the technology was a “lawful interception” system comparable to systems used by governments and telecommunications providers around the world.
The indictment has also alleged Huawei conducted business in North Korea despite U.S. sanctions.
Judge Donnelly has cautioned jurors against turning the proceeding into a referendum on China itself, telling them that China and the Chinese Communist Party are not on trial.
That distinction is important. The jury’s job is to determine whether federal prosecutors have proved the criminal charges against Huawei beyond a reasonable doubt, not to resolve the broader geopolitical conflict between the United States and China.
Why this trial matters
Corporate criminal prosecutions of this magnitude rarely reach a jury.
Companies frequently resolve federal investigations through plea agreements, deferred prosecution agreements or negotiated settlements. Duke University law professor Brandon Garrett told the International Consortium of Investigative Journalists that what makes the Huawei case particularly remarkable is simply that it reached trial.
The case also places several major issues in one courtroom: Chinese technological power, American intellectual property, international sanctions, telecommunications security, banking and the increasingly intense competition between the United States and China.
Hundreds of pieces of evidence are expected to be introduced, and witnesses who have worked with Huawei in the United States, Iran and elsewhere are expected to testify. Donnelly has indicated she hopes the proceeding can conclude by Christmas, although the trial could extend into 2027.
After nearly eight years of investigation, indictments, diplomatic disputes and legal maneuvering, the government’s allegations are finally being tested before a jury.
Prosecutors say Huawei built part of its global telecommunications empire through theft, deception and violations of U.S. law.
Huawei says the government has transformed aggressive international competition and disconnected commercial disputes into a criminal conspiracy.
Now, federal prosecutors have to prove their case in court.
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