Tuesday, October 27, 2020

Chinese professor faces US fraud charge over claims he took technology to help Huawei

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US prosecutors have charged a Chinese professor with fraud for allegedly taking technology from a California company to benefit Huawei, in another shot at the embattled Chinese telecommunications equipment maker.

Bo Mao was arrested in Texas on August 14 and released six days later on US$100,000 bond after he consented to proceed with the case in New York, according to court documents.

He pleaded not guilty in US District Court in Brooklyn on August 28 to a charge of conspiring to commit wire fraud.

According to the criminal complaint, Mao entered into an agreement with the unnamed California tech company to obtain its circuit board, claiming it was for academic research.

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But the complaint accuses an unidentified Chinese telecommunications conglomerate, which sources say is Huawei, of trying to steal the technology, and alleges Mao played a role in its alleged scheme. A court document also indicates the case is related to Huawei.

Mao, an associate professor at Xiamen University in China who also became a visiting professor at a Texas university last autumn, first gained attention as part of a Texas civil case between Huawei and Silicon Valley start-up CNEX Labs.

That case ended in June with a “take nothing” verdict. A jury did not find CNEX stole trade secrets, but decided Huang violated his employment contract by not notifying the company of patents he obtained within a year of leaving.

However, the jury found Huawei was not harmed and did not award any damages. The jury also found Huawei misappropriated a CNEX trade secret, but awarded no damages on that claim, either.

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Now, US prosecutors who have an case against Huawei in Brooklyn for alleged bank fraud and Iran sanctions violations, have revived the CNEX case.

Although the company has not been charged, Huawei said it views the case against Mao as the US government’s latest instance of “selective prosecution”.

“US federal prosecutors are charging forward with CNEX’s allegations” despite the outcome of the civil case, a Huawei spokesman said in a statement, adding that US prosecutors had shown no interest in Huawei’s claims against CNEX.

Related: Big banks tangled in U.S. case against Huawei CFO

The spokesman noted the United States was charging Mao, even though the professor was never sued by CNEX and never called to testify at the civil trial.

A spokesman for the US Attorney’s office in Brooklyn declined to comment, as did a lawyer for Mao, a CNEX spokesman, and a lawyer for Huang.

Huawei says the US government has made a concerted effort to discredit the company and curb its industry leadership. It said none of the accusations against it have been supported with sufficient evidence.

In January, US prosecutors announced an indictment against Huawei for trade secret theft involving T-Mobile, following a civil case between those companies.




The same day, the Justice Department unsealed the bank fraud indictment in Brooklyn that accused Huawei of misleading global banks about its business in Iran.

The US government has also lobbied other government to ban Huawei equipment, and banned companies from supplying Huawei with US components without special licences, ratcheting up tension between China and the United States as they engage in a tit-for-tat trade war.

A Justice Department spokesman said last week that while the department does not comment on specific investigations, it complies with the law and all subjects “enjoy the same rights to due process afforded by our constitution and safeguarded by an independent judiciary.”

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