A former Huawei employee’s testimony in a federal criminal trial has renewed scrutiny of the Chinese telecommunications giant’s explanation for past allegations of corporate espionage and trade secret theft, raising questions about whether employees acted independently or followed a broader corporate strategy.
The testimony, delivered Oct.13 in Brooklyn federal court, centered on a 2013 internal memorandum offering financial rewards to Huawei employees who obtained information about competitors. The document, which originated at the company’s Chinese headquarters, became the subject of warnings from American management before eventually reaching the FBI.
The revelations come as Huawei faces 12 criminal counts involving racketeering, trade secret theft, bank fraud, money laundering and violations of U.S. sanctions against Iran. Prosecutors allege that the company engaged in a sustained campaign to acquire American technology through deception and theft, while Huawei maintains that the government is improperly treating isolated employee misconduct as evidence of a corporate conspiracy.
Former employee’s testimony challenges Huawei’s defense
Heather Campbell, a former employee at Huawei Device USA’s Plano, Texas, office, testified that she became concerned in July 2013 after learning about a memorandum encouraging employees to collect information about competitors.
According to courtroom reporting published Oct. 16 by Jonathan S. Landreth, Campbell said Huawei’s internal legal counsel, Charles de Chateauvieux, discreetly handed her an envelope containing the memorandum and a separate warning from the company’s American human resources director.
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The July 10 memorandum, signed by Huawei employee Kevin Gu, outlined a reward system for obtaining competitors’ information. Employees could receive payments ranging from 200 to 2,000 Chinese yuan, depending on the material’s value and confidentiality.
Product roadmaps commanded the highest rewards, while business documents, project quotations, distribution structures and after-sales strategies were assigned smaller amounts. The memorandum also provided instructions for submitting information, including provisions for encrypted communications.
Campbell testified that she interpreted the document as “asking our employees to commit theft.”
Her concerns were apparently shared by some American colleagues.
On July 12, just two days after the headquarters memorandum was issued, Huawei Device USA human resources director Jennifer Ponder circulated a high-priority email rejecting the practice.
“Here in the USA we do not condone such behavior,” Ponder wrote, according to the courtroom account and documents presented during the trial.
The email warned that employees engaging in such activities could face disciplinary action, including dismissal.
Campbell eventually provided the documents to the FBI, bringing the internal disagreement to federal investigators’ attention.
However, Huawei’s defense attorneys challenged her interpretation during cross-examination.
Attorney Julia Gatto argued that Campbell was not an original recipient of the memorandum and had no direct knowledge of how it was drafted or approved. The defense also emphasized that its initial distribution was limited to approximately 15 to 20 sales employees rather than research engineers.
Gatto questioned whether language in the memorandum concerning punishment had been correctly interpreted. Campbell acknowledged that an alternative translation could indicate employees would not be punished for refusing to participate.
The defense further pointed to Ponder’s email as evidence that Huawei’s American management had expressly prohibited the conduct. Campbell acknowledged that she knew of no executive who had overturned the warning.
Huawei also introduced evidence of intellectual property compliance training conducted in July and August 2013.
Those details could prove important to the company’s defense. While prosecutors view the memorandum as evidence of an organized effort to acquire competitors’ confidential information, Huawei argues that its American subsidiary actively discouraged improper conduct.
The dispute raises a central question: Did the memorandum represent an authorized corporate initiative, or was it an internal proposal rejected before becoming company policy?
Prosecutors allege years of organized trade secret theft
The controversy surrounding Huawei’s internal memorandum extends beyond the current testimony.
Federal prosecutors have previously accused the company of falsely portraying intellectual property theft as misconduct committed by individual employees.
In January 2019, the U.S. Department of Justice announced criminal charges against Huawei and its American subsidiary involving the alleged theft of technology from T-Mobile’s laboratory in Bellevue, Washington.
The allegations centered on T-Mobile’s proprietary smartphone-testing robot, known as Tappy.
Prosecutors alleged that Huawei engineers secretly photographed the robot, measured its components and removed a mechanical arm to assist efforts to develop similar technology in China.
According to the Justice Department, after T-Mobile discovered the activities and threatened litigation, Huawei produced an internal report describing the incidents as the “work of rogue actors within the company.”
Federal investigators disputed that explanation.
The Justice Department alleged that emails uncovered during the investigation demonstrated a coordinated operation involving employees in both China and the United States.
The allegations eventually became part of a much broader federal case.
In a February 2020 superseding indictment, prosecutors accused Huawei and several subsidiaries of systematically misappropriating intellectual property from six American technology companies.
The alleged methods included violating confidentiality agreements, recruiting employees with access to competitors’ proprietary information and using academic intermediaries to acquire technology.
Prosecutors also identified an alleged corporate reward program for employees who obtained confidential information from rival companies.
The government maintained that the purported campaign allowed Huawei to reduce research and development expenses while obtaining “a significant and unfair competitive advantage.”
The defense presented a sharply different account when the current trial opened Sept. 9.
According to Reuters’ coverage of the opening statements, Huawei attorney Brian Heberlig rejected the suggestion that the company had built its international business through criminal activity.
“There was no blueprint for crime,” Heberlig told jurors.
He argued that prosecutors were selectively combining unrelated incidents into a misleading narrative about Huawei’s business practices.
Heberlig characterized the Cisco and T-Mobile incidents as “actions by individual employees” and maintained that Huawei management had attempted to address misconduct once it became aware of it.
The company has also pointed to the outcome of its earlier civil dispute with T-Mobile.
In a January 2019 statement, Huawei emphasized that the companies settled their dispute in 2017 following a jury verdict that found no damages, unjust enrichment or willful and malicious conduct by Huawei in T-Mobile’s trade secret claim.
That civil outcome, however, does not resolve the separate criminal allegations now before the federal court.
The Oct. 13 testimony adds another dimension to the dispute by demonstrating that concerns about obtaining competitors’ information had emerged within Huawei’s American operations more than a decade earlier.
For prosecutors, the headquarters memorandum may help establish a connection between individual incidents and an alleged broader corporate practice.
For the defense, the American subsidiary’s documented opposition to the memorandum could support its argument that the company maintained safeguards against intellectual property violations.
The distinction is central to the government’s racketeering case, which requires prosecutors to establish more than isolated acts of employee misconduct.
Ultimately, jurors will be asked to determine whether the evidence demonstrates an organized pattern of criminal activity attributable to Huawei or separate incidents that prosecutors have improperly connected.
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