Huawei offered bonuses to employees who could steal trade secrets: DOJ

DOJ alleges China's Huawei offered bonuses to any employee who could steal trade secrets

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(By Associated Press)

TAIPEI (Taiwan News) -- An indictment released by the US Department of Justice (DOJ) on Monday (Jan. 28) alleges that Chinese electronics behemoth Huawei offered incentives to any employee who could steal trade secrets.

In an indictment of Huawei on charges of theft of trade secrets, fraud, and obstruction of justice released on Monday by the DOJ, the Chinese tech giant was accused of offering bonuses to employees who could successfully pilfer confidential information from other firms. In a press release announcing the indictment, acting Attorney General Matthew G. Whitaker said that the DOJ was charging the Chinese telecom powerhouse with "nearly two dozen alleged crimes."

The alleged crimes were perpetrated against U.S.-based T-Mobile from 2012 to 2014 and include theft of trade secrets, attempted theft of trade secrets, seven counts of wire fraud, and one count of obstruction of justice. A key piece of evidence is an internal company announcement sent via email by Huawei to its employees offering them rewards for stealing secret data from rival companies.

In 2012, Huawei began a campaign to steal information on a phone-testing robot to be used by T-Mobile called "Tappy." In an attempt to make their own version of the robot before they were even shipped to T-Mobile, Huawei engineers surreptitiously took photos of "Tappy," took measurements of its parts, and even stole a piece of it for technicians in China to reverse engineer it.

Once T-Mobile discovered the corporate espionage and threatened to sue, Huawei claimed that the illegal activities were "the work of rogue actors." However, an FBI investigation revealed that Huawei company emails sent in 2013 offered bonuses to employees based on the value of the confidential information they could steal from "other companies around the world," and send to Huawei via an encrypted email address.

If the DOJ finds Huawei guilty of Conspiracy and Attempt to Commit Trade Secret Theft, the company could face a maximum fine of US$5 million or "three times the value of the stolen trade secret, whichever is greater." If Huawei is found guilty of Wire Fraud and Obstruction of Justice, it could face a maximum fine of US$500,000.

Meanwhile, Huawei's Chief Financial Officer and daughter of the firm's founder, Meng Wanzhou, is fighting a request to have her extradited to the U.S. from Canada for committing fraud by misleading banks about the company's dealings in Iran.