Double Agent Foiled Chinese Spies’ Probe Into Huawei Investigation: DOJ
Joseph F. Kovar
U.S. Attorney General Merrick Garland and other DOJ officials said they have charged two Chinese intelligence officers with obstruction of justice by attempting to bribe a U.S. government employee to provide prosecutors’ information in their case against an unnamed China-based telecommunications company widely believed to be Huawei.
The U.S. Department of Justice Monday unsealed a criminal complaint against two Chinese intelligence officers who allegedly attempted to bribe an employee of the U.S. Attorney’s Office for the Eastern District of New York for information that court had in relation to a criminal prosecution against China-based tech firm Huawei.
That telecom company mentioned in the complaint was not named either in the complaint itself or by Department of Justice officials who took part in a press conference Monday to unveil the complaint.
However, it is widely believed to refer to China-based Huawei, the world’s largest telecom company, which is the subject of ongoing investigations into some of its practices and its relationship to the China government.
Huawei did not respond to a CRN request for further information by press time.
U.S. Attorney General Merrick Garland, in a live press conference Monday, discussed several instances of alleged activities conducted on behalf of the Chinese government that violated U.S. law.
In the first case, Garland said that the complaint unsealed Monday alleges that in 2019, two alleged Chinese intelligent officers, who are not in U.S. custody, directed a U.S. employee of a U.S. government law enforcement agency to steal confidential information about the U.S. criminal prosecution of the unnamed China-based telecom company. They are being charged with obstruction of justice.
“The defendants believe that they had recruited the U.S. employee as an asset, but in fact, the individual they recruited was actually a double agent, working on behalf of the FBI,” Garland said. “As a complaint alleges, the defendants paid bribes totaling $61,000 in Bitcoin to the double agent to obtain nonpublic information, including files from the US Attorney‘s Office in the Eastern District.”
The goal, Garland said, was to obtain the prosecution strategy memo, confidential information regarding witnesses, trial evidence, and potential new charges to be brought against the company.
However, the double agent instead provided the defendants with documents prepared by the U.S. government that appeared to present some of the information they sought, Garland said.
“This was an egregious attempt by PRC intelligence officers to shield a PRC-based company from accountability and to undermine the integrity of our judicial system,” he said.
Left unsaid in the press conference and in other materials supplied by the DOJ in the case was the identity of that China-based telecommunications company. The DOJ declined to comment when asked by a reporter whether the case was related to Huawei, or whether the two defendants were related to Huawei.
However, in the complaint and affidavit released Monday, the U.S. District Court of the Eastern District of New York identified the China-based telecom company as “Company-1.”
Company-1, the court wrote, is a global telecommunications company headquartered in the PRC which conducts business across the world and in the United States. It originally faced prosecution by the U.S. government in or around January of 2019, the court wrote.
“Company-1 maintains several affiliates in the United States. Company-1 is a defendant in a pending prosecution in the Eastern District of New York (“EDNY”). In a February 2020 press release announcing the unsealing of a superseding indictment against Company-1, the U.S. Department of Justice indicated that the investigation related to Company-1 is ongoing,” the court wrote.
The description in the complaint matches the situation faced by Huawei in the U.S.
The DOJ in January of 2019 said that a 10-count indictment unsealed in the western district of Washington State charging Huawei Device Co. Ltd. and Huawei Device Co. USA with theft of trade secrets conspiracy, attempted theft of trade secrets, seven counts of wire fraud, and one count of obstruction of justice.
That indictment was related to allegations that Huawei attempted to steal trade secrets from Bellevue, Washington-based T-Mobile USA and then obstruct justice when T-Mobile threatened to sue Huawei in relation to alleged theft of technology related to a T-Mobile-designed robotic device for testing smart phone durability.
The DOJ also said that a 13-count indictment unsealed in the federal court in Brooklyn charges four defendants with bank fraud, wire fraud, conspiracy to commit wire fraud, violations of the International Emergency Economic Powers Act (IEEPA), conspiracy to violate IEEPA, and conspiracy to commit money laundering, the DOJ said Monday. This was in relation to alleged exports of Hewlett-Packard equipment over 10 years ago to Iran in violation of U.S. law.
A year later, the DOJ unveiled a superseding indictment against Huawei Technologies and a number of its U.S. subsidiaries that charged it with violating the RICO (Racketeer Influenced and Corrupt Organization) Act.
The superseding indictment also charges Huawei and its subsidiaries with conspiracy to steal trade secrets. A “superseding indictment” replaces a previous indictment, typically when new evidence in a case comes to light that necessitates the filing of new charges.
Deputy Attorney General Lisa Monaco used the DOJ press conference to say that her organization will not tolerate threats from a foreign power to the rights of Americans or to U.S. institutions.
Monaco said the cases are part of a backdrop of “malign activity” from the People‘s Republic of China that includes espionage, harassment, obstruction of justice, and “unceasing efforts to steal sensitive U.S. technology.
“In the words of our intelligence community, China seeks to be a major power on the world stage and to challenge the United States in multiple arenas,” she said. “Today‘s cases make clear that Chinese agents will not hesitate to break the law and to violate international norms in the process.”
In one of the indictments unsealed Monday, two Chinese intelligence officers attempted through bribery and espionage to obstruct the federal criminal prosecution of a China-based global telecommunications company, Monaco said.
“Defendants attempted to bribe someone they believed was an insider to steal the prosecutors’ playbook, including who the prosecutors were meeting with and what they would argue in court,” she said. “Also that the company could unlawfully gain an edge and undermine the government‘s case. But the insider flipped the script on the defendants by working not for them, but for Team America.”
The defendants’ desperate efforts to sabotage the prosecution of the China-based telecom company exposes China’s commitment to tilting the playing field in favor of Chinese corporations abroad, Monaco said.
“Far from accepting the rule of law, PRC agents sought to use bribes to help the Chinese company obstruct and evade it,” she said. “This case exposes the interconnection between PRC intelligence officers and Chinese companies. And it demonstrates once again why such companies especially in the telecommunications industry, shouldn‘t be trusted to securely handle our sensitive personal data and communications.”