throbber
Case 1:18-cr-00457-AMD Document 126 Filed 02/13/20 Page 1 of 56 PageID #: 1349
`
`- against -
`
`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF NEW YORK
`- - - - - - - - - - - - - - - - - - - - - - - - - - - - X
`
`UNITED STATES OF AMERICA
`
`
`
`HUAWEI TECHNOLOGIES CO., LTD.,
`HUAWEI DEVICE CO., LTD.,
`HUAWEI DEVICE USA INC.,
`FUTUREWEI TECHNOLOGIES, INC.,
`SKYCOM TECH CO., LTD.,
`WANZHOU MENG,
`
`also known as “Cathy Meng” and
`
`“Sabrina Meng,”
`
`
`
`S U P E R S E D I N G
`I N D I C T M E N T
`
`Cr. No. 18-457 (S-3) (AMD)
`(T. 18, U.S.C., §§ 371, 981(a)(1)(C),
`982(a)(1), 982(a)(2), 982(b)(1), 1343,
`1344, 1349, 1512(k), 1832(a)(5),
`1832(b), 1956(h), 1962(d), 1963(a),
`1963(m), 2323(b)(1), 2323(b)(2), 2 and
`3551 et seq.; T. 21, U.S.C., § 853(p);
`T. 28, U.S.C., § 2461(c); T. 50, U.S.C.,
`§§ 1702, 1705(a) and 1705(c))
`
`
`
`
`Defendants.
`
`
`
` -
`
` - - - - - - - - - - - - - - - - - - - - - - - - - - - X
`
`
`THE GRAND JURY CHARGES:
`
`
`
`INTRODUCTION
`
`At all times relevant to this Superseding Indictment, unless otherwise
`
`indicated:
`
`I. The Defendants
`
`1.
`
`The defendant HUAWEI TECHNOLOGIES CO., LTD. (“HUAWEI”)
`
`was a global networking, telecommunications and services company headquartered in
`
`Shenzhen, Guangdong, in the People’s Republic of China (“PRC”). As of the date of the
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`filing of this Superseding Indictment, HUAWEI was the largest telecommunications
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`

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`equipment manufacturer in the world. HUAWEI was owned by its parent company, Huawei
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`Investment & Holdings Co., Ltd. (“Huawei Holdings”), which was registered in Shenzhen,
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`Guangdong, PRC, and predecessor entities of that company.
`
`2.
`
`The defendant HUAWEI DEVICE CO., LTD. (“HUAWEI DEVICE”)
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`was a company in the PRC that designed and manufactured wireless phones. HUAWEI
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`DEVICE was a subsidiary of HUAWEI.
`
`3.
`
`The defendant HUAWEI DEVICE USA INC. (“HUAWEI DEVICE
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`USA”), a manufacturer of communication products whose headquarters was in the United
`
`States, and the defendant FUTUREWEI TECHNOLOGIES, INC. (“FUTUREWEI”), a
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`research and development company whose headquarters was in the United States, were both
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`subsidiaries of HUAWEI and Huawei Holdings.
`
`4.
`
`The defendant SKYCOM TECH CO., LTD. (“SKYCOM”) was a
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`corporation registered in Hong Kong whose primary operations were in Iran. SKYCOM
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`functioned as HUAWEI’s Iran-based subsidiary. As of 2007, Huawei Holdings owned
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`SKYCOM through a subsidiary (“Huawei Subsidiary 1”), an entity the identity of which is
`
`known to the Grand Jury. In or about November 2007, Huawei Subsidiary 1 transferred its
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`shares of SKYCOM to another entity (“Huawei Subsidiary 2”), an entity the identity of
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`which is known to the Grand Jury, which was purportedly a third party in the transaction but
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`was actually controlled by HUAWEI. Following this transfer of SKYCOM shares from
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`Huawei Subsidiary 1 to Huawei Subsidiary 2, HUAWEI falsely claimed that SKYCOM was
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`one of HUAWEI’s local business partners in Iran, as opposed to one of HUAWEI’s
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`subsidiaries or affiliates.
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`

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`5.
`
`The defendant WANZHOU MENG, also known as “Cathy Meng” and
`
`“Sabrina Meng,” was a citizen of the PRC. From at least in or about 2010, MENG served as
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`Chief Financial Officer of HUAWEI. Between approximately February 2008 and April
`
`2009, MENG served on the SKYCOM Board of Directors. More recently, MENG also
`
`served as Deputy Chairwoman of the Board of Directors for HUAWEI.
`
`II. The Scheme to Misappropriate Intellectual Property
`
`
`8.
`
`Since at least in or about 2000 through the date of this Superseding
`
`Indictment, the defendants HUAWEI, FUTUREWEI, HUAWEI DEVICE and HUAWEI
`
`DEVICE USA (the “IP Defendants”) and others executed a scheme to operate and grow the
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`worldwide business of HUAWEI and its parents, global affiliates and subsidiaries through
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`the deliberate and repeated misappropriation of intellectual property of companies
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`headquartered or with offices in the United States (the “Victim Companies”) for commercial
`
`use. By misappropriating the intellectual property of the Victim Companies, the IP
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`Defendants received income directly and indirectly, including by benefitting from the sale of
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`products containing stolen intellectual property and saving on research and development
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`costs, which income the IP Defendants agreed to use to establish and operate the worldwide
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`

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`business of Huawei and its parents, global affiliates and subsidiaries, including in the United
`
`States.
`
`9.
`
`The misappropriated intellectual property of the Victim Companies
`
`comprised or included trade secret information, as defined by Title 18, United States Code,
`
`Section 1839(3), and other confidential and nonpublic intellectual property. To protect trade
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`secret information and other intellectual property from disclosure, the Victim Companies
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`each employed reasonable measures, including but not limited to physical, electronic and
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`network security, company policy and training, and legal agreements and contracts. The IP
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`Defendants believed that the misappropriated intellectual property comprised or contained
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`trade secret information, and knew and intended that such misappropriation would injure the
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`Victim Companies.
`
`10.
`
`The misappropriated intellectual property of Victim Companies
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`consisted of 10 or more copies of copyrighted works with a value greater than $2,500 within
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`a period of 180 days, as defined and described within Title 18, United States Code, Section
`
`2319. The IP Defendants knew and intended that the misappropriation of copyrighted
`
`works would injure the Victim Companies.
`
`11.
`
`To obtain the intellectual property of the Victim Companies, the IP
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`Defendants sometimes entered into confidentiality agreements with the owners of the
`
`intellectual property and then violated the terms of the confidentiality agreements by
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`misappropriating the intellectual property for the IP Defendants’ own commercial use. The
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`IP Defendants also tried to recruit employees of the Victim Companies in order to gain
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`access to intellectual property of their former employers, and the IP Defendants directed and
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`incentivized their own employees to steal intellectual property from other companies.
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`

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`12. On other occasions, the IP Defendants used proxies such as professors
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`working at research institutions or third party companies, purporting not to be working on
`
`behalf of the IP Defendants, to gain access to the Victim Companies’ nonpublic intellectual
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`property. Those proxies then impermissibly provided the Victim Companies’ nonpublic
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`proprietary information to the IP Defendants.
`
`13.
`
`In another effort to gain access to the nonpublic intellectual property of
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`the Victim Companies, in 2013, HUAWEI launched a formal policy instituting a bonus
`
`program to reward employees who obtained confidential information from competitors.
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`Under the policy, HUAWEI established a formal rewards schedule to pay employees of
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`HUAWEI affiliates for stealing information from competitors based upon the value of the
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`information obtained. Employees were directed to post confidential information obtained
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`from other companies on an internal HUAWEI website, or, in the case of especially sensitive
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`information, to send an encrypted email to a special huawei.com email mailbox. A
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`“competition management group” was tasked with reviewing the submissions and awarding
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`monthly bonuses to the employees who provided the most valuable stolen information.
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`Biannual awards also were made available to the top “Huawei Regional Divisions” that
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`provided the most valuable information. A memorandum describing this program was sent
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`to employees in the United States.
`
`14.
`
`To avoid and minimize the costs of potential civil and criminal liability
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`in the United States, and therefore more easily establish and operate HUAWEI’s U.S.
`
`business, the IP Defendants engaged in a pattern of obstruction. In advance of and during
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`civil proceedings regarding the IP Defendants’ alleged misappropriation of intellectual
`
`property, the IP Defendants provided false information in the form of affidavits or reports of
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`internal investigations, to minimize potential liability for the misappropriation of intellectual
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`property. Similarly, the IP Defendants instructed employees to conceal information from
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`law enforcement. For example, an official HUAWEI manual labeled “Top Secret”
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`instructed certain individuals working for HUAWEI to conceal their employment with
`
`HUAWEI during encounters with foreign law enforcement officials.
`
`15.
`
`To prevent civil and criminal liability, as well as reputational harm,
`
`when confronted with evidence of their wrongdoing, the IP Defendants publicly blamed the
`
`wrongdoing on purportedly rogue low-level employees of HUAWEI and its subsidiaries and
`
`affiliates.
`
`16. HUAWEI, HUAWEI DEVICE USA and FUTUREWEI agreed to use
`
`the proceeds derived from the theft of intellectual property to establish and operate the
`
`business of HUAWEI and its parents, global affiliates and subsidiaries in the United States
`
`and abroad. Similarly, HUAWEI, HUAWEI DEVICE USA and FUTUREWEI agreed to
`
`benefit from cost savings generated by stolen intellectual property to innovate more quickly
`
`and thus to also establish and operate the business of HUAWEI and its parents, and global
`
`affiliates and subsidiaries in the United States and abroad.
`
`17. As part of the scheme to establish and operate the business of
`
`HUAWEI and its parents, global affiliates and subsidiaries in the United States and
`
`elsewhere, and to avoid interference in their scheme by U.S. governmental bodies or other
`
`private actors, HUAWEI, HUAWEI DEVICE USA and FUTUREWEI repeatedly made
`
`material misrepresentations as to the misappropriation and subsequent commercial use of
`
`intellectual property, as well as other criminal activity, including the nature and extent of
`
`business in high-risk jurisdictions such as Iran, to U.S. governmental bodies from whom
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`

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`HUAWEI, HUAWEI DEVICE USA and FUTUREWEI sought regulatory authorization that
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`would help grow the IP Defendants’ U.S.-based business. HUAWEI, HUAWEI DEVICE
`
`USA and FUTUREWEI made similar material misrepresentations to financial institutions
`
`from whom the defendants sought banking services.
`
`A.
`
`Company 1
`
`18.
`
`Beginning in or about 2000, the defendants HUAWEI and
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`FUTUREWEI misappropriated operating system source code for internet routers, command
`
`line interface (a structure of textual commands used to communicate with routers) and
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`operating system manuals from a U.S. technology company headquartered in the Northern
`
`District of California (“Company 1”), an entity the identity of which is known to the Grand
`
`Jury, and incorporated the misappropriated source code into HUAWEI internet routers that
`
`FUTUREWEI sold in the United States from approximately April 2002 until December
`
`2002. Toward this end, HUAWEI and FUTUREWEI hired or attempted to hire Company 1
`
`employees and directed these employees to misappropriate Company 1 source code on behalf
`
`of the defendants. Company 1 had registered as copyrighted the material misappropriated
`
`by HUAWEI and FUTUREWEI.
`
`19. HUAWEI and FUTUREWEI publicly marketed their internet routers in
`
`the United States as lower cost versions of Company 1 internet routers; HUAWEI and
`
`FUTUREWEI’s routers featured model numbers, user interfaces and operating manuals
`
`similar to those of routers sold by Company 1. In actuality, HUAWEI and FUTUREWEI’s
`
`internet routers were essentially direct copies of routers sold by Company 1.
`
`20.
`
`In or about December 2002, representatives of Company 1 notified
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`senior HUAWEI executives, including the founder of HUAWEI (“Individual-1”), an
`
`

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`individual whose identity is known to the Grand Jury, of the misappropriation. After
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`approximately one month of negotiation, the defendants HUAWEI and FUTUREWEI agreed
`
`to replace the original versions of some of the misappropriated source code and to recall
`
`from the U.S. market products that included misappropriated source code.
`
`21.
`
`In or about 2003, Company 1 filed suit against the defendants
`
`HUAWEI and FUTUREWEI in federal court in the Eastern District of Texas for
`
`infringement of intellectual property. At the outset of the litigation, HUAWEI and
`
`FUTUREWEI claimed to have already removed Company 1’s source code from products
`
`and recalled routers containing any stolen source code in early 2003. However, as part of
`
`this recall effort and to obstruct the civil litigation, HUAWEI and FUTUREWEI erased the
`
`memory drives of recalled HUAWEI routers and then sent those routers to the PRC before
`
`Company 1 could access them, thus destroying evidence of HUAWEI and FUTUREWEI’s
`
`illicit conduct. Also, in an effort to destroy evidence, FUTUREWEI attempted to remotely
`
`access HUAWEI routers that had already been sold in the United States and erase the
`
`misappropriated source code contained therein.
`
`22.
`
`In the litigation against Company 1, a HUAWEI executive vice
`
`president, an individual whose identity is known to the Grand Jury, filed a declaration on
`
`behalf of the defendants HUAWEI and FUTUREWEI falsely claiming that the defendants
`
`had received Company 1’s source code from a third party. HUAWEI and FUTUREWEI
`
`submitted this false declaration to minimize potential civil damages in the pending litigation
`
`by making it appear that HUAWEI had not knowingly misappropriated Company 1’s source
`
`code but rather benefitted from a munificent third party.
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`

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`23. As part of the litigation, the parties agreed that a neutral expert would
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`examine the source code used by Company 1 and HUAWEI in internet routers from which
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`HUAWEI and FUTUREWEI had purportedly removed copied source code. In a limited
`
`examination of small portions of the source code at issue, the neutral expert found that source
`
`code for two sequences of HUAWEI program instructions (“routines”) were substantially
`
`similar to or developed or derived from Company 1’s source code: “It is clear that there was
`
`Substantial Similarity in portions of the Huawei . . . code and that there has been copyright
`
`infringement.” In particular, the neutral expert found “the conclusion is unescapable” that
`
`one routine of HUAWEI source code is “Substantially Similar to [Company 1]’s [source
`
`code] and has been misappropriated.” With respect to four other programming routines, the
`
`neutral expert agreed with Company 1 that portions of those routines “were copied from
`
`[Company 1] source code,” and one routine “was copied in its entirety and modified
`
`slightly.”
`
`24.
`
`From approximately April 2002 until December 2002, FUTUREWEI
`
`sold HUAWEI routers containing Company 1’s source code in the United States. The
`
`efforts by FUTUREWEI and HUAWEI to obstruct civil litigation with Company 1,
`
`including by filing a declaration with false information and destroying evidence of
`
`misappropriation, were designed to save costs from litigation and avoid possible regulatory
`
`or law enforcement action.
`
`B.
`
`Company 2
`
`25.
`
`In or about and between 2000 and 2003, an engineer (“Engineer-1”), an
`
`individual whose identity is known to the Grand Jury, engaged in efforts to misappropriate
`
`the intellectual property of a U.S. technology company headquartered in the Northern
`
`

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`District of Illinois (“Company 2”), an entity the identity of which is known to the Grand
`
`Jury, and provide the intellectual property to HUAWEI. Engineer-1 was employed by
`
`Company 2.
`
`26. No later than October 2001, HUAWEI had identified Engineer-1 as a
`
`target for recruitment in light of his employment with Company 2. In an October 9, 2001
`
`email, which subject read “[Company 2] [Engineer-1] visit in Huawei,” a HUAWEI
`
`employee wrote that Engineer-1 worked for Company 2, and that:
`
`[He] has more than 40 patents. Last year, when [Engineer-1]
`had a meeting with [Individual-1] and [Huawei’s Chief Strategy
`Marketing Officer (“Individual-2”, an individual whose identity
`is known to the Grand Jury)] in Huawei, [Individual-1] asked
`[Engineer-1] to join Huawei. Considering his team members
`(more than 10 people), he refused the proposal. Now he is
`coming to seek opportunity to cooperate with Huawei in a few
`products. He will come to China around October 20 and wishes
`to meet Individual-2 and Huawei people from relevant business
`departments.
`
`
`The recipient of the email responded, “At present, we can communicate with him to see
`
`whether he has any primary plan or proposal for cooperation and cooperation in what
`
`products.” As part of this recruitment effort, between in or about 2000 and 2003, Engineer-
`
`1 met personally with Individual-1 and other HUAWEI executives multiple times in the
`
`PRC.
`
`27.
`
`For example, in or about February 2003, Engineer-1 met with
`
`Individual-1 in the PRC. On or about March 3, 2003, Engineer-1 wrote an email to
`
`Individual-1 and another HUAWEI employee stating, “Attached please find those document
`
`[sic] about [Company 2 base station technology] specification you asked.” The email
`
`attached a 50-page document with technical specifications for a base station, designed for use
`
`

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`in wireless network, manufactured by Company 2. Each page of the document bore the
`
`marking “[Company 2] Confidential Property.” The cover page of the document stated,
`
`“This document and the information contained in it is Confidential Information of [Company
`
`2] and shall not be used, published[,] disclosed, or disseminated outside of [Company 2].”
`
`C.
`
`Company 3
`
`28.
`
`In or about July 2004, at a trade show in Chicago, Illinois, a HUAWEI
`
`employee (“Individual-3”), an individual whose identity is known to the Grand Jury, was
`
`discovered in the middle of the night after the show had closed for the day in the booth of a
`
`technology company (“Company 3”), an entity the identity of which is known to the Grand
`
`Jury, removing the cover from a networking device and taking photographs of the circuitry
`
`inside. Individual-3 wore a badge listing his employer as “Weihua,” HUAWEI spelled with
`
`its syllables reversed. In official correspondence with Company 3 shortly after this incident,
`
`HUAWEI claimed that Individual-3 attended the trade show in his personal capacity and that
`
`his attempted misappropriation occurred “without Huawei’s authorization.” According to a
`
`purported official statement published in Reuters, HUAWEI claimed, “This is a junior
`
`engineer who had never traveled to the United States before. His actions do not reflect the
`
`culture or values of Huawei.” Notably, a resume that Individual-3 submitted to the U.S.
`
`government in approximately 2012 stated that he had been a “senior R&D Engineer” at
`
`HUAWEI from 1997 until July 2004, the time of the incident.
`
`29.
`
`The efforts to misappropriate the intellectual property of Company 3
`
`were designed to permit HUAWEI to save on research and development costs in the
`
`development of its own networking device.
`
`
`
`
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`D.
`
`Company 4
`
`30.
`
`In or about 2009, HUAWEI and FUTUREWEI devised a scheme to
`
`misappropriate technology related to antennas that provide cellular telephone and data
`
`services. The technology was developed by a technology company operating in the
`
`Northern District of California and the Western District of New York (“Company 4”), an
`
`entity the identity of which is known to the Grand Jury.
`
`31.
`
`In or about September 2009, FUTUREWEI entered into a non-
`
`disclosure agreement (“NDA”) with Company 4, which prevented FUTUREWEI from using
`
`confidential information provided by Company 4 for FUTUREWEI’s own benefit or to the
`
`competitive disadvantage of Company 4.
`
`32. On or about September 21, 2009, Company 4 provided a presentation
`
`to HUAWEI and FUTUREWEI regarding Company 4’s proprietary technology to improve
`
`reception between cellular telephones and the antennas that provide cellular telephone and
`
`data services, which was a trade secret of Company 4. Each slide was marked “Commercial
`
`In Confidence.” Thereafter, in response to questions from a FUTUREWEI engineer
`
`(“Engineer-2”), Company 4 provided additional information regarding the technology.
`
`33. While expressing outward enthusiasm for a potential partnership with
`
`Company 4, HUAWEI and FUTUREWEI secretly worked to misappropriate the Company 4
`
`technology provided pursuant to the NDA. On or about September 21, 2009, the same day
`
`that Company 4 provided the presentation to HUAWEI and FUTUREWEI, a HUAWEI
`
`employee wrote an email to Engineer-2 at FUTUREWEI expressing interest in the
`
`technology on which Company 4 had presented. On or about October 23 and October 26,
`
`2009, Engineer-2 wrote two emails to his colleagues indicating that he was very interested in
`
`

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`the Company 4 technology and had some ideas on how to implement the technology. On or
`
`about October 30, 2009, FUTUREWEI filed a provisional patent application with the U.S.
`
`Patent and Trademark Office that used and relied in large part upon the Company 4
`
`intellectual property.
`
`34.
`
`In or about and between approximately 2009 and 2016, HUAWEI
`
`received approximately $22 million in income derived from the sale of products that
`
`incorporated intellectual property misappropriated from Company 4.
`
`E.
`
`Company 5
`
`35.
`
`In or about 2012 and 2013, HUAWEI, HUAWEI DEVICE and
`
`HUAWEI DEVICE USA devised a scheme to misappropriate robot technology from a U.S.
`
`wireless network operator headquartered in the Western District of Washington (“Company
`
`5”), an entity the identity of which is known to the Grand Jury. In May 2012, HUAWEI
`
`DEVICE USA asked Company 5 to sell or license its proprietary robotic system for testing
`
`phones to HUAWEI DEVICE USA; Company 5 declined. Thereafter, HUAWEI and
`
`HUAWEI DEVICE began to develop their own robotic phone-testing system, and directed
`
`HUAWEI DEVICE USA employees to provide detailed information about Company 5’s
`
`technology to support that effort.
`
`36.
`
`Beginning in or about August 2012, HUAWEI DEVICE USA and
`
`Company 5 executed a series of confidentiality agreements allowing select HUAWEI
`
`DEVICE USA employees access to a Company 5 robot laboratory. HUAWEI, HUAWEI
`
`DEVICE and HUAWEI DEVICE USA employees abused this restricted access in order to
`
`misappropriate Company 5 technology. In a November 6, 2012 email, a HUAWEI engineer
`
`directed a HUAWEI DEVICE USA employee, “[T]his email is just a kindly reminder for the
`
`

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`information we need to build our own robot system and kindly feedback the information we
`
`need in the attachment . . .” Attached to the email was a file requesting information about
`
`the technical specifications of the robot hardware components and software systems. The
`
`HUAWEI DEVICE USA employee responded, “[HUAWEI DEVICE USA engineers] have
`
`accessed the [Company 5] robot lab . . . . They know how [Company 5] robot work and
`
`system info. I asked them to write down the info in detail and then send to [HUAWEI and
`
`HUAWEI DEVICE].”
`
`37.
`
`In or about and between November 2012 and January 2013, in response
`
`to technical questions from HUAWEI and HUAWEI DEVICE, HUAWEI DEVICE USA
`
`employees sent HUAWEI and HUAWEI DEVICE multiple photographs of the Company 5
`
`robot and its software interface system taken from inside the secure Company 5 laboratory,
`
`in violation of the confidentiality agreements. In or about January 2013, HUAWEI
`
`DEVICE USA suggested that HUAWEI and HUAWEI DEVICE send their own engineer to
`
`Company 5’s laboratory in Seattle, Washington: “You will learn a lot in knowledge and
`
`experience.” In or about and between March and April 2013, HUAWEI and HUAWEI
`
`DEVICE continued to develop their own robot while directing HUAWEI DEVICE USA
`
`employees to provide more information about Company 5’s robot.
`
`38.
`
`In or about May 2013, HUAWEI sent an engineer working on the robot
`
`project (“Engineer-3”), an individual whose identity is known to the Grand Jury, to the
`
`United States. Engineer-3 wrote to HUAWEI DEVICE USA, describing his trip as follows:
`
`“go to the [Company 5] laboratory for reconnaissance and obtain measurement data.”
`
`39. On or about and between May 13 and 14, 2013, HUAWEI DEVICE
`
`USA employees allowed to access the Company 5 laboratory improperly used their badges to
`
`

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`15
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`allow Engineer-3 access. Once inside, Engineer-3 photographed and gathered technical
`
`information about the robot before Company 5 personnel discovered the breach and escorted
`
`him out of the facility. Engineer-3 then emailed HUAWEI, HUAWEI DEVICE and
`
`HUAWEI DEVICE USA personnel the photographs and technical information he had
`
`improperly gathered.
`
`40. On or about May 29, 2013, a HUAWEI DEVICE USA employee
`
`accessed the laboratory and surreptitiously placed a robot arm into a laptop bag and removed
`
`the robot arm from the laboratory. Before the robot arm was returned to Company 5—
`
`which had discovered the theft—Engineer-3 took measurements of the robot arm and
`
`emailed photographs and measurements to HUAWEI and HUAWEI DEVICE engineers.
`
`41. On or about August 13, 2013, HUAWEI DEVICE USA issued an
`
`“Investigation Report,” which purported to summarize the findings of an internal
`
`investigation into the above-described misconduct in the Company 5 robot laboratory.
`
`HUAWEI DEVICE USA subsequently provided a copy of the report to Company 5. The
`
`report falsely described the actions of Engineer-3 and HUAWEI DEVICE USA in May 2013
`
`as “isolated incidents,” and characterized Engineer-3’s actions as a “moment of
`
`indiscretion.” Additionally, a HUAWEI DEVICE USA employee falsely informed
`
`Company 5 that there were “not a lot of emails” discussing the Company 5 robot, when, in
`
`fact, there was extensive email correspondence among HUAWEI, HUAWEI DEVICE and
`
`HUAWEI DEVICE USA in which HUAWEI and HUAWEI DEVICE employees directed
`
`HUAWEI DEVICE USA employees to misappropriate information from Company 5.
`
`42. On or about May 19, 2014, HUAWEI sent a letter to Company 5
`
`describing disciplinary measures taken in response to the actions of Engineer-3 and
`
`

`

`Case 1:18-cr-00457-AMD Document 126 Filed 02/13/20 Page 16 of 56 PageID #: 1364
`16
`
`HUAWAI DEVICE USA, and claiming that HUAWEI did not condone those actions and
`
`that respect for intellectual property rights was one of HUAWEI’s “core principles.”
`
`43.
`
`Company 5 ultimately filed a civil lawsuit against HUAWEI,
`
`HUAWEI DEVICE and HUAWEI DEVICE USA.
`
`44.
`
`The efforts to misappropriate the intellectual property of Company 5
`
`were designed to permit HUAWEI DEVICE to save on research and development costs in
`
`the development of its own testing robot for use on HUAWEI DEVICE prototypes. The
`
`efforts to obstruct civil litigation with Company 5, such as misstatements regarding the
`
`quantity of relevant email correspondence, were designed to save litigation costs and to avoid
`
`scrutiny by regulators and law enforcement.
`
`F.
`
`Company 6
`
`45.
`
`In or about and between 2013 and 2018, HUAWEI devised a scheme to
`
`misappropriate technology from a U.S. developer of architecture for memory hardware
`
`headquartered in the Northern District of California (“Company 6”), an entity the identity of
`
`which is known to the Grand Jury.
`
`46. Not long after the corporate formation of Company 6—which was a
`
`direct competitor of HUAWEI in the field of memory hardware architectural design—
`
`HUAWEI devised a corporate strategy to misappropriate proprietary technology from
`
`Company 6. An internal HUAWEI presentation from in or about 2015 articulated the
`
`“countermeasures” planned against Company 6, including “continuously recruit[ing] people
`
`from [Company 6]” in order to cause “internal turmoil” at Company 6. The same document
`
`included an organizational chart for Company 6, listing the names and compensation
`
`information for Company 6 employees located both in the United States and in the PRC.
`
`

`

`Case 1:18-cr-00457-AMD Document 126 Filed 02/13/20 Page 17 of 56 PageID #: 1365
`17
`
`47. As part of its scheme to misappropriate Company 6’s technology,
`
`HUAWEI invited principals of Company 6 to make a presentation in Shenzhen, PRC in or
`
`around June 2015 about Company 6’s technology regarding architecture for solid state
`
`drives, a kind of data storage device. After the presentation, HUAWEI sought a copy of the
`
`slide deck that Company 6 had used in its presentation; in the course of these
`
`communications, HUAWEI falsely expressed interest in developing a commercial
`
`relationship with Company 6. After receiving HUAWEI’s oral promises that it would
`
`maintain the confidentiality of the information contained in the slide deck, including that
`
`HUAWEI would not share this information with HUAWEI’s subsidiary that at the time was
`
`developing competing technology, Company 6 sent a copy of the slide deck to HUAWEI.
`
`Immediately upon receipt of the slide deck, each page of which was marked “Proprietary and
`
`Confidential” by Company 6, HUAWEI distributed the slide deck to HUAWEI engineers,
`
`including engineers in the subsidiary that was working on technology that directly competed
`
`with Company 6’s products and services. These engineers discussed developments by
`
`Company 6 that would have application to HUAWEI’s own prototypes then under design.
`
`Such actions were inconsistent with HUAWEI’s previously stated intent to develop a
`
`commercial relationship with Company 6.
`
`48. Acting at the direction of the Rotating Chairman of HUAWEI, a
`
`HUAWEI engineer (“Engineer-4”), an individual whose identity is known to the Grand Jury,
`
`visited Company 6’s headquarters in the Northern District of California during the summer
`
`of 2016. According to a message sent to Company 6, Engineer-4 sought the meeting
`
`because “We are choosing . . . your company or [a competitor] to develop the [solid state
`
`drive] disc for our next generation of hard discs.” After a meeting with a principal of
`
`

`

`Case 1:18-cr-00457-AMD Document 126 Filed 02/13/20 Page 18 of 56 PageID #: 1366
`18
`
`Company 6, an individual whose identity is known to the Grand Jury, where the principal
`
`provided an oral overview of Company 6’s plans for architectural design, Engineer-4 wrote
`
`an internal HUAWEI email attaching a slide presentation detailing some of Company 6’s
`
`intellectual property. The email stated, “Our idea of [solid state drive] and controller
`
`coordination is good but we acted a bit late.”
`
`49. HUAWEI did not follow up on Engineer-4’s representations to
`
`Company 6 that HUAWEI intended to consider purchasing Company 6’s products or
`
`services. Rather, HUAWEI made efforts to obtain Company 6’s nonpublic technology
`
`without directly engaging Company 6. For example, two HUAWEI employees, individuals
`
`whose identities are known to the Grand Jury, including a principal of HUAWEI’s chip
`
`design team, wrote to Company 6’s generic email address, without concealing their
`
`affiliation with HUAWEI, requesting samples of Company 6’s products, which were not then
`
`publicly available. Company 6 did not respond to these email requests, which were
`
`considered unusual business practice and possible efforts to misappropriate Company 6’s
`
`protected intellectual property.
`
`50. HUAWEI used a proxy to

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