
U.S. Accuses Huawei of Stealing Trade Secrets, Defrauding Banks - ericzawo
https://www.bloomberg.com/news/articles/2019-01-28/u-s-planning-to-announce-criminal-charges-related-to-huawei-jrgrda0q
======
educationdata
In China, stealing trade secrets is called “打破技术封锁” (breaking the technical
blockade). The U.S. does not even need to collect evidence through
investigation. Just by reading Chinese news reports and textbooks, you will
find there are lots of Chinese nationalist stories about their hero technician
/ scientists steal western technologies. They are literally proud of it.

I heard from my Chinese friends who work in the US universities in the field
of EE, CS, material, etc.. Huawei actually has personnel monitoring their
university webpages. Add working project to your webpage, Huawei could
call/email you the next day (in Chinese of course) if they find something they
want to buy to get ahead.

~~~
ezVoodoo
As one who speaks Chinese, I find what you said is a blatant lie.

In deed, “打破技术封锁” means to break the technical blockade, but by means of
independent innovation, not stealing "trade secrets". Given China has the
biggest force of engineers and scientists in the world, it is not so hard to
understand.

Fact check, Huawei is the only full 5G solution provider in the world; whereas
no such company can be found in the US.

So when you or your friends think the US has much to be stolen by China, think
twice.

~~~
dc443
I don't get it. What you wrote and what you're responding to are not in
contradiction with one another. On what basis is what GP said a lie? What
relevance does 5G have to anything?

Progress in technology is progress regardless.

I just watched a few episodes of Black Mirror so I'm in cynical mode. I'm not
trying to be argumentative but it just felt more like a non-sequitur than
anything...

Progress is good (mostly), though, right?

As for which economies that progress happens to bolster, well, let the chips
fall where they may, I suppose.

------
panarky
These look like serious charges:

Defrauding four large banks into clearing transactions with Iran in violation
of international sanctions.

Conspiracy to obstruct justice by moving employees out of the United States so
they could not be called as witnesses before a grand jury in Brooklyn.

Conspiracy to defraud the United States by impairing, impeding, obstructing
and defeating, through deceitful and dishonest means, the lawful governmental
functions of an agency of the United States.

Money laundering conspiracy.

Conspiracy to steal trade secrets about robotics from a competitor, T-Mobile.

Source: [https://www.nytimes.com/2019/01/28/us/politics/meng-
wanzhou-...](https://www.nytimes.com/2019/01/28/us/politics/meng-wanzhou-
huawei-iran.html)

If the charges are true, I hope Ms. Meng is extradited and prosecuted, and the
company barred from operating in the US.

But if this is just a bargaining chip to be exchanged for a few worthless
face-saving trade deal "wins" for this administration, it will be disgrace.

~~~
tossaccount123
>But if this is just a bargaining chip to be exchanged for a few worthless
face-saving trade deal "wins" for this administration, it will be disgrace

If letting one person off the hook can benefit all americans through better
trade, how is that a disgrace?

China has apparently offered to balance the trade deficit with the US within 6
years

[https://www.bloomberg.com/news/articles/2019-01-18/china-
is-...](https://www.bloomberg.com/news/articles/2019-01-18/china-is-said-to-
offer-path-to-eliminate-u-s-trade-imbalance)

their economy is also tanking rapidly based on what their government can't
cover up, the quarterly reports of US companies

[https://www.bloomberg.com/news/articles/2019-01-28/nvidia-
cu...](https://www.bloomberg.com/news/articles/2019-01-28/nvidia-cuts-outlook-
reflecting-weaker-economy-especially-china)

So by basically any measure the US is winning the trade war

~~~
gruez
>If letting one person off the hook can benefit all americans through better
trade, how is that a disgrace?

it's a disgrace for the rule of law and an independent judiciary.

~~~
tossaccount123
lol, our justice system has been a joke for a long time. James Clapper and
John Brennan are walking free after violating every American's constitutional
rights and then lying to congress about it. Meanwhile Edward Snowden is a
wanted criminal around the world for exposing their rape of the US
constitution and roger stone has his house raided by 29 FBI agents with CNN
filming in the driveway for lying to congress.

There's a Navy veteran rotting in Jail right now for taking a picture of his
sub on his last day because it was technically classified info. Hillary
Clinton is enjoying life despite having hundreds of pieces of classified info
on her server

There are two tiers of justice in our country, get used to it. At least in
this case it would benefit the average american

~~~
equalunique
Agreed, with a grain of salt.

------
Hongwei
Speaking as a Canadian, this is already old news for us. There have been
lively debates over on /r/canada, which went very one-sided (understandably)
after China arrested two Canadians as leverage. [1]

As someone who likes to follow geopolitics, I can't help but wonder if the
timing of this extradition request was strategic. When Meng was arrested,
Canada was in the middle of NAFTA/USMCA re-negotiations and our Prime Minister
was publicly musing about diversifying our trade partnerships, specifically
focused on engaging with China. The automatic arrest of one of China's
"royals" per our extradition treaty with the US was an extremely effective way
of erasing our only major leverage on that negotiation.

IIRC the charge of bank fraud for business dealings in Iran was largely
unrelated to Huawei's (sketchy) telco business. Kind of like how they got Al
Capone on tax evasion.

[1] [https://www.nytimes.com/2018/12/12/world/asia/michael-
spavor...](https://www.nytimes.com/2018/12/12/world/asia/michael-spavor-
canadian-detained-china.html)

~~~
FreedomToCreate
Not true. USMCA was signed before the arrest. Approx USMCA was finalized on
Nov 30 (negotiated in the months before that. Meng was arrested on Dec 1).

Citations: [https://www.npr.org/2018/11/30/672150010/usmca-trump-
signs-n...](https://www.npr.org/2018/11/30/672150010/usmca-trump-signs-new-
trade-agreement-with-mexico-and-canada)

[https://www.cnn.com/2018/12/05/tech/huawei-cfo-arrested-
cana...](https://www.cnn.com/2018/12/05/tech/huawei-cfo-arrested-
canada/index.html)

~~~
Hongwei
Can't argue with that. Thanks for correcting my fuzzy memory! In the same
vein, this still removes the "we can always take our business over there" card
that our PM was waving around.

~~~
tw04
It seems extremely unlikely that China would refuse to do business with Canada
over one persons arrest. The way they need their economy to continue growing
they can't turn down a major source of revenue like Canada.

------
Taniwha
On what planet is the idea of making a robot with a mechanical finger to press
phones to test them a trade secret .... (as a phone developer) it's so
blooming obvious I've spent hours of meeting discussing exactly this

It's only a trade secret if you think the entire rest of the world is stupid

~~~
mehwoot
It's not the idea, its the specific technology.

 _took measurements of parts of the robot and, in one instance, stole a piece
of the robot_

~~~
Taniwha
But why would anyone need to do that, you build one of these by starting with
a cheap 3d printer and removing the print head, it's not a hard thing to make

~~~
shard972
Well go tell the Chinese they don't actually need to steal any trade secrets
or any of this, they can just make it themselves.

I'm sure they will reward you handsomely for basically saving their
relationship with western countries and saving so much time and effort.

~~~
dang
Please don't post unsubstantive comments to HN, and especially please don't
post in the flamewar style. Double especially not for nationalistic battle.

[https://news.ycombinator.com/newsguidelines.html](https://news.ycombinator.com/newsguidelines.html)

Edit: it looks like you've unfortunately posted a ton of unsubstantive and
uncivil comments. If you keep doing that we will ban you, so could you please
re-read the guidelines and fix that? You might also find these links helpful
for getting an idea of the spirit of this site:

[https://news.ycombinator.com/newswelcome.html](https://news.ycombinator.com/newswelcome.html)

[https://news.ycombinator.com/hackernews.html](https://news.ycombinator.com/hackernews.html)

[http://www.paulgraham.com/hackernews.html](http://www.paulgraham.com/hackernews.html)

[http://www.paulgraham.com/trolls.html](http://www.paulgraham.com/trolls.html)

~~~
shard972
And the OP wasn't a troll? Or is the bar for intelligent discourse in HN at
"Nobody honestly knows why china engadges in IP theft when they could just
build it themselves."

Ill edit my comment to be nicer i guess.

Edit: Can't edit the post anymore, oh well people get it anyway, it got 7 up
votes, IP theft actually benefits the person that acquires it and ill be
willing to debate that anytime.

~~~
dang
I'm doubtful that the OP was trolling. It doesn't really matter, though. Each
of us needs to abide by the site guidelines even if others aren't or don't
seem to. That's the only way to prevent the bar from slipping further.

Edit: while I have you, can you please not post unsubstantive comments like
[https://news.ycombinator.com/item?id=19032367](https://news.ycombinator.com/item?id=19032367)
either? That's more bar slippage and we're hoping to avoid it.

------
walrus01
It is well known in the optical networking space that Huawei stolen the
entirety of Nortel's DWDM proprietary data and research, and used it to build
their own dwdm platform product line.

~~~
effie
I wonder what Nortel's management and Canada's national security did to
prevent that from happenning.

------
product50
To commenters in this thread explaining that this is unfair (since almost all
countries including US did it at some point of time), the main issue is that
USA is powerful enough to do something about it. They can rally up support
from their allies and keep Chinese companies from gaining any international
adoption. Look at how they got Meng from Huawei arrested - it was almost
unreal. This is how the world works today.

~~~
make3
the quantity matters, and it's very clear that China did it a lot more. Also,
Meng got arrested because we are in a state of law and she broke the law, not
because some despot chose to

~~~
luckylion
Are you sure? The NSA runs a global surveillance program, monitoring/copying
most of the internet traffic, and industrial espionage (against all non-US
states & companies, allies or not) is a stated goal of this program.

I don't know how well-funded the chinese IP theft program is, but I doubt it's
much larger.

~~~
misja
Some proven cases of economic espionage by the NSA: (and these were even
against allies)

[https://www.economist.com/europe/2015/06/27/i-spy-you-
spy](https://www.economist.com/europe/2015/06/27/i-spy-you-spy)

[https://www.globalresearch.ca/the-nsa-scandal-economic-
espio...](https://www.globalresearch.ca/the-nsa-scandal-economic-espionage-
against-germany-is-germanys-bnd-a-subsidiary-of-us-intelligence/5412279)

------
zavi
China needs to take down its firewall or be shut out from the international
markets. Blocking foreign web traffic in the age of digital commerce is
blatant protectionism and WTO rules should be updated to prohibit such
practice.

------
dmode
I am really concerned about the rapid development of the Huawei case. Sure
Huawei has issues, but which corporation doesn’t. If you are an US exec, I
would limit travel to China as one can risk being arrested for frivolous
reasons.

~~~
seppin
If Apple execs conducted espionage on behalf of the US Government, they should
be targeted. The concern is, they don't, but they will still be targeted.

~~~
camillomiller
So far the only major international espionage scandal that was proven (unless
you consider Snowden a liar) was the NSA scandal, which showed how American
companies were involved in an international scheme (willingly or not, it
doesn’t matter) to spy on both allied nations and enemy countries. Nothing
like that has ever emerged about China.

~~~
jmknoll
That’s because it isn’t a story. People are routinely arrested in China for
things they share on the very-much-not-encrypted WeChat. Anything that goes
through any chinese tech company can be assumed to be have been read and
processed by the government.

~~~
camillomiller
So, how is this comparable to what I wrote? We are talking about China spying
on foreign nations through the products sold by a national company.

Has it been proven that America did that? YES, unless you choose to dismiss
Snowden's revelations.

Has China ever done that? NO, or at least it has never emerged.

These are the facts.

Is China a repressive regime controlling the digital comms of its citizens?
sure thing, but what has this to do with what we were discussing above?

Basic logic, damn, basic logic.

------
b_tterc_p
Article implies the part about stealing tech from TMobile is well documented
and already resolved in court...

It feels weird to me that this wasn’t a bigger deal?

------
kmlx
you already know how it is with the US Gov: free markets are great unless we
lose, in which case free markets go out the window and we start going after
your relatives. hopefully China will not drop to that level, but we've already
seen the nationalists arresting Canadian citizens. let's just hope Tim Cook
doesn't have any relatives travelling to China.

~~~
aritmo
That's the sad truth. No principles, just abusing the power of being
superpower.

------
kw71
Does anyone remember if HP was punished for allowing a reseller to send
millions of dollars of computers to Iran? I also saw HP logos on the monitors
during footage of a North Korean missile test.

~~~
casefields
"HP today announced a resolution of a U.S. Department of Justice (DOJ) and
U.S. Securities and Exchange Commission (SEC) investigation of potential
violations of the Foreign Corrupt Practices Act (FCPA).

HP will pay approximately $108 million to these two U.S. government agencies.
HP also has agreed to undertake certain compliance, reporting and cooperation
obligations."

[https://www8.hp.com/us/en/hp-news/press-
release.html?id=1624...](https://www8.hp.com/us/en/hp-news/press-
release.html?id=1624050)

~~~
thewileyone
And no HP exec was arrested.

------
thewileyone
Banks trade with sanctioned countries and only get slapped with large fines.
No bank officer has been arrested in trades with Iran or any other sanctioned
country.

------
CamTin
Remember that the laws these supposedly insidious foreigners are accused of
breaking are in the same moral category as the ones your beloved hacker heroes
rail against. Is this a China vs US dispute, or a war by capital against
people, with one of the weapons being a magical spell that turns knowledge
into property that they can own and profit from?

------
lollipopJesus
To be honest, this case has everything to do with Huawei's background (state
connected, state supported). Possible not fair competition and fear of
espionage dooms Huawei whatever the case details are. BTW companies steal. All
in the game.

------
pishpash
Blah blah blah, Trump has eyes set on bringing down China's leading industries
for his decoupling doctrine, so anything goes. The specifics don't even
matter. If you're a rat chasing specific charges you're already missing the
forest for the trees.

------
onetimemanytime
No doubt Huawei did this. And no doubt Trump will wipe their slate clean for a
trade deal. So it sucks for Canada.

US has sanctions on Iran, not China so getting around them is not considered a
crime for them. Of course they will steal any technology them deem essential
for their business.

Bank fraud is probably lying to banks about doing business with Iran, not
cheating them of money.

~~~
panarky
It's conspiracy to commit bank fraud if you lie to a US bank to get them to
clear US dollar transactions in violation of sanctions.

Banks pay astronomical fines for evading sanctions.

Infographic ->
[https://www.refinitiv.com/content/dam/gl/en/documents/infogr...](https://www.refinitiv.com/content/dam/gl/en/documents/infographics/fines-
for-banks-that-breached-us-sanctions-infographic.pdf)

And it's conspiracy to defraud the United States if you obstruct or defeat an
agency of the US government.

Also money laundering, wire fraud, stealing trade secrets, etc.

~~~
onetimemanytime
Like I said, they do not consider it a crime. Lying to the banks was means to
an end--doing business with Iran. Like if you deal drugs, you will also evade
taxes.

~~~
Pyxl101
> Like if you deal drugs, you will also evade taxes.

Not necessarily. You could choose to pay taxes on that income to the IRS. The
IRS provides a way to report illegal income and pay taxes on it.

[https://www.irs.gov/publications/p17](https://www.irs.gov/publications/p17)

> Illegal activities. Income from illegal activities, such as money from
> dealing illegal drugs, must be included in your income on Form 1040, line
> 21, or on Schedule C or Schedule C-EZ (Form 1040) if from your self-
> employment activity.

Does anyone pay taxes on income from illegal drugs? Probably not "street
dealers", but I would suspect people who earn income from marijuana businesses
that are legal in some states but illegal federally probably do pay tax on
that income.

Furthermore, IRS tax returns are confidential. The IRS is generally prohibited
from tipping off police about reported illegal income, though there are
various loopholes: [https://money.cnn.com/2013/02/28/news/economy/illegal-
income...](https://money.cnn.com/2013/02/28/news/economy/illegal-income-
tax/index.html)

~~~
onetimemanytime
I get it, but let's see: don't declare it and you may get a pass. Declare it
and you're certainly going to jail for longer than tax evasion.

~~~
dragonwriter
> Declare it and you're certainly going to jail for longer than tax evasion.

The lines you include it in are general income lines, no explanation of the
income is expected or required. It's not like there is a separate line item
for illegal activities. So, no, you aren't certainly going to jail if you
report it.

~~~
onetimemanytime
So IRS is just gonna accept that you made $241,000 and just that dealing
drugs? Tax return is step one, if red flags are raised, it's audit time with
explanations, witnesses, ledgers etc. If you got caught or want to leave the
profession, it's another thing, come clean. No doubt in my mind that agencies
talk to each other, formally or informally.

~~~
dragonwriter
> So IRS is just gonna accept that you made $241,000 and just that dealing
> drugs

No, they are going to accept that you made $241,000 in regular income from
sources that do not provide W-2s, 1099s, etc. The “dealing drugs” part is not
part of the filing.

> Tax return is step one, if red flags are raised, it's audit time with
> explanations, witnesses, ledgers etc.

Red flags are more likely to be raised by living beyond the means suggested by
your reported income as by reporting income with no apparent source; IRS
audits and investigations are looking for evidence of concealed income or
other evasion of tax liability, not satisfying curiosity about the sources of
reported income otherwise, and the Fifth Amendment right against self-
incrimination applies.

It's true that laundering money so that you can avoid both reported income
with no apparent source and living beyond the means of your reported income is
a common technique (though still technically usually tax evasion, since it
usually involves concealing some part of the gross income which is expended in
the scheme, and that income is taxable and you cannot deduct illegal
_expenses_ against illegal income, so the cost of laundering is not
deductible.)

> No doubt in my mind that agencies talk to each other, formally or
> informally.

Well, they certainly coordinate in the direction that gets criminals who
conceal the details of their other crimes well enough to complicate
prosecution but evade taxation busted for the tax offenses. The direction you
are concerned about is less evident, though.

------
bitxbit
It boggles my mind why the Chinese choose to take on nefarious endeavors when
they are already ahead.

~~~
MichaelApproved
It's not like they started _after_ they got ahead. Nefarious tactics are a
large part of _how_ they got ahead.

~~~
bitxbit
They’ve been ahead for awhile now, at least a decade in some areas. This is
akin to the Warriors getting caught cheating every other game.

~~~
glitchc
Not sure if they’re ahead in any area exactly. Do you have specifics?

~~~
arwhatever
Consumer drone technology. :-)

~~~
glitchc
Indeed. And to answer my own question: Landing on the dark side of the moon.

------
sjroot
I have to be honest — the allegations made here do not surprise me. The days
of corporate espionage seem alive and well, and China’s image in the United
States is taking a significant hit.

It isn’t fair to the honest, hard-working Chinese nationals who want to build
a life outside their homeland.

~~~
pointillistic
But is it fair to the Americans who lost jobs, manufacturing, future, because
of the 20 years of "technology transfer" by China?

~~~
Nasrudith
You are blaming the wrong people there. Anyone with half a brain would realize
moving manufacturing into a high population country would create competitiors
who now know the fundamentals of your business. And who can do the math to
figure out they can claim the market taking advantage of the cheap labor and
expensive markets.

But Wall Street has a frothing hatred of people who think beyond the next
fiscal quarter. Just look at the sheer Tesla short ratio long after it was
clear they were viable.

------
dgzl
In a Data Structures class a few years ago, during a review for our upcoming
exam, the professor had to abruptly leave the room... I forget why. While they
were gone, a Chinese student runs up to the podium and grabs the papers the
professor was reading from and takes it back to their large friend group. When
the professor returned, they didn't have their notes (I think it was a
previous year exam). Feeling uncomfortable, the professor was unable to get
the thief to confess, and class was over.

About one day before the exam, a friend of mine said he was offered the texts
and it had circulated to pretty much anyone who wanted it.

~~~
ahelwer
What the fuck is the relevance of this story? We're just sharing tales of
Chinese people misbehaving now? People in here need to do some serious soul-
searching about their attitude toward 1.3 billion people. The transparent
racism that pops up on every thread about China stealing trade secrets is
embarrassing.

~~~
dgzl
Excuse me? I'm not being racist, the friend of mine in the story was also a
Chinese guy. From what I understand, at my University there was a pretty
strong culture among Chinese students to share code and homeworks. I even
remember my old teacher telling me they caught a Chinese grad student who ran
a business outsourcing undergrad CS homework to code-shops back in China. I
don't see how this is racist, it's just observation.

I'm not sure how you're confused about relevance either.

~~~
jessaustin
Relevance? TFA is about an executive arrested because her firm is accused of
selling telecom equipment to Iran. TFA also mentions that the firm is also
accused of copying the design of a product-testing robot. Your charming
anecdote is about some student stealing class notes from a professor. What
links the executive and the student? They're both Chinese!

That is racist. You probably don't see that, but only because your racism
makes you less rational.

~~~
dgzl
I'm sorry that my paltry life only offers anecdotes from college cheating
instead of multinational corporate espionage, please forgive me. /s But to
make an accusation of racism based on sharing a true story is very naive. In
fact, you calling me out and saying that I'm "less" is more bigoted than
anything I've said. You're literally claiming superiority over me, and all
I've done is told a true story.

~~~
ahelwer
The choice of _what_ to communicate in a public forum is, itself, a form of
communication. This is obvious to everyone with a working social sense. People
don't just tell random anecdotes apropos of nothing. Here, you're telling the
anecdote because you wanted to establish that there is a culture of dishonesty
among Chinese people, isn't that right?

~~~
dgzl
Establishing the culture of dishonesty among the entire Chinese population
isn't even remotely my job or prerogative, but if I have stories of systemic
cheating within _some_ of the Chinese culture at my University, then that
seems reasonably apropos. I suppose you think I should just pretend like my
experiences didn't happen, and not mention it to anyone? I never said the
Chinese people as a whole are one way or another, and I'm taking offense to
these unwarranted accusations.

~~~
jessaustin
You're easily offended, but not because anything unfair has been written about
you. Your experience is important to you but not to this thread.

If you had tried to enlighten a discussion of e.g. an African-American
executive at a tech firm with a similarly bizarre anecdote, you would have
gotten far more complaints. The excuse you've given here, "I just haven't
known many black people!", wouldn't count for much either.

