#Breaking: Huawei CFO Wanzhou Meng Admits to Misleading Global Financial Institution - updated
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#Breaking: Huawei CFO Wanzhou Meng Admits to Misleading Global Financial Institution - updated
Meng Enters into Deferred Prosecution Agreement to Resolve Fraud Charges The Chief Financial Officer of Huawei Technologies Co. Ltd., Wanzhou Meng, 49, of the People’s Republic of China (PRC)…
The Chief Financial Officer of Huawei Technologies Co. Ltd., Wanzhou Meng, 49, of the People’s Republic of China (PRC), appeared today in federal district court in Brooklyn, entered into a deferred prosecution agreement (DPA) and was arraigned on charges of conspiracy to commit bank fraud and conspiracy to commit wire fraud, bank fraud and wire fraud.
Letter from USA to the Court RE Meng - which is important to read because it confirms a few assumptions…and sets forth the facts and certain terms and conditions of the Deferred Prosecution Agreement…
Deferred Prosecution Agreement
There are some interesting carve outs in this DPA - the full compliance ←is pretty standard but what’s remarkable is the “underlying charging instruments with prejudice” that’s super intriguing
The Offices agree to defer prosecution of MENG for the charges in the above-captioned third superseding indictment (the “Indictment”) for four years from the date of her arrest in Canada (the “deferral period”). MENG waives all rights to a speedy trial pursuant to the Sixth Amendment of the United States Constitution, Title 18, United States Code, Section 3161, Federal Rule of Criminal Procedure 48(b), and any applicable Local Rules of theUnited States District Court for the Eastern District of New York for the deferral period.
The Offices agree that, if MENG is in full compliance with her obligations under this Agreement for the deferral period, they will move to dismiss the Indictment against her, as well as the underlying charging instruments against her, with prejudice and will not bring any criminal charges against her in connection with conspiracy to commit bank fraud, conspiracy to commit wire fraud, bank fraud, and wire fraud, as set forth in Counts Four, Six, Seven and Nine of the Indictment, respectively, or for any of the charges against her in the underlying charging instruments in this matter. Ms. Meng’s appearance will not be required for the dismissal.
The Offices agree that, if MENG is in full compliance with her obligations under this Agreement for the deferral period, they will move to dismiss the Indictment against her, as well as the underlying charging instruments against her, with prejudice and will not bring any criminal charges against her in connection with conspiracy to commit bank fraud, conspiracy to commit wire fraud, bank fraud, and wire fraud, as set forth in Counts Four, Six, Seven and Nine of the Indictment, respectively, or for any of the charges against her in the underlying charging instruments in this matter. Ms. Meng’s appearance will not be required for the dismissal.
Statement of Facts:
Ms. Meng is a Chinese citizen and the daughter of Huawei’s founder, Ren Zhengfei, and since 2010 has served as Huawei’s Chief Financial Officer. Ms. Meng also serves as Deputy Chairwoman of Huawei’s Board of Directors.Skycom Tech. Co. Ltd. (“Skycom”) was a Hong Kong company that primarily operated in Iran. As of February 2007, Skycom was wholly owned by Huawei subsidiary Hua Ying Management (“Hua Ying”). In November 2007, Hua Ying transferred its shares of Skycom to another entity that Huawei controlled, Canicula Holdings (“Canicula”). At the time Hua Ying transferred its Skycom shares to Canicula, Ms. Meng was the Secretary of Hua Ying.
In February 2008, after Huawei transferred ownership of Skycom from Hua Ying to Canicula, Ms. Meng joined Skycom’s Board of Directors, which was comprised of Huawei employees. She served on the Board until April 2009. After Ms. Meng departed from Skycom’s Board, Skycom’s Board members continued to be Huawei employees, Canicula continued to own Skycom, and Canicula continued to be controlled by Huawei. As of August 2012, Huawei included Skycom among a list of “other Huawei subsidiaries” in Huawei corporate documents written in English.
Huawei controlled Skycom’s business operations in Iran, and Skycom was owned by an entity controlled by Huawei…During the Relevant Time Period, Huawei employees engaged with a U.K. staffing company to provide engineers in Iran to support Skycom’s work with Iranian telecommunications service providers. Negotiations and contracting on behalf of Skycom were conducted by Huawei employees. To pay for these contractors, Huawei sent at least $7.5 million to the U.K. staffing company in a series of approximately 80 payments from Skycom’s bank accounts in Asia, including at a multinational financial institution (“Financial Institution 1”), to the U.K. staffing company’s account in the United Kingdom. The transactions were denominated in U.S. dollars and cleared through the United States.
In the following section of the Statement of Facts - this is a point by counterpoint break down of false statements the Defendant made during the relevant time period.
…during the Relevant Time Period, Huawei caused Skycom to conduct approximately $100 million worth of U.S.-dollar transactions through Financial Institution 1 that cleared through the United States, at least some of which supported its work in Iran in violation of U.S. law, including $7.5 million for Iran-based contractors from the U.K. staffing company to do work in Iran.
USA v Meng DPA Statement of Facts
Very interesting carve out because the subtext here is -ongoing investigations and the potential criminal culpability for others like “Huawei’s Treasure”
At no point during or after the August Meeting did Ms. Meng, who was aware of Huawei’s public statements about Skycom published by Reuters, retract or amend any of those statements. Moreover, Huawei’s Treasurer, who also attended the August Meeting, did not correct or amend any of the statements made by Ms. Meng.
Perhaps I’m reading too much in to this but I get the sense that there are a whole lot of facts being left out. And I think it’s pretty obvious there’s an ongoing counterintelligence aspect to this DPA. Meaning that Meng’s “compliance” —cooperation might be valuable to exposing more of China’s underbelly ongoing infiltration of our Government. Cough 5G Cough ZTE
Shortly after the August Meeting, Huawei prepared an English version of the PowerPoint presentation at Financial Institution 1’s request. Ms. Meng later arranged for a paper copy of that PowerPoint presentation to be delivered to the Financial Institution 1 executive in September 2013. The representations in the English version of the PowerPoint presentation closely tracked the ones Ms. Meng gave during the in-person August Meeting.
After the August Meeting, and subsequent receipt of the PowerPoint presentation, Financial Institution 1 decided to continue its relationship with Huawei. The other Financial Institutions similarly continued their respective relationships with Huawei.
So for now I suppose we should wait for facts to come out about Meng’s “cooperation” pursuant to her Deferred Prosecution Agreement…but again I’d like to walk you through several interconnected cases. For some reason folks consistently overlooked the 2019 indictment re Huawei stealing T-Mobile’s Tappy -a robotic test of users on 3rd party devices
3rd Superseding (redacted) Indictment
Now that I’ve had some time to reacquaint myself with the SR3 - I’d like to draw your attention to a couple of observations because when reading Meng’s DPA and Statement of Facts -both of these filings referenced the SR3 and there’s a disclosure made if you read all 4 court documents together (yes there’s a 2019 indictment concerning the IP stolen from T-Mobile)1
On Page 1 - do you see the red box? The redaction indicates that there is at least one other individual, not a corporation but an actual person. If you understand the formatting style then you’d note that “entities” are typically listed and then the individual.
Moving on to page 3 the SR3 - specifically paragraph 5 located on page 3 - note the entire redacted box? That entire subparagraph is redacted in its entirety but if you understand how to read the flow of the indictment then you realize that redacted box is likely concerning Huawei’s Treasurer…and the redacted box contains paragraph 6 and 7 And you know that paragraphs 6 & 7 are in conjunction with “Scheme to Misappropriate Intellectual Property“
COUNT FIVE - Conspiracy to Commit Bank Fraud
If you had been paying close attention then you’d know that there was/is another indictment -aka separate criminal case -for now put a pin in that, I’ll come back to it once we finish up the SR3
…between August 2017 and January 2019, both dates being approximate and inclusive, within the Eastern District of New York and elsewhere, the defendants HUAWEI, [REDACTED]…together with others, did knowingly and intentionally conspire to execute a scheme and artifice to defraud U.S. Subsidiary 4, a financial institution, and to obtain moneys, funds, credits and other property owned by and under the custody and control of said financial institution, by means of one or more materially false and fraudulent
I am fairly confident that U.S. Subsidiary 4 (a financial institution) is in fact HSBC - it is kind of satisfying to know my 2019-2020 predictions that HSBC DPAs 2 actually played a roll in the Meng & Huawei indictment(s) - as you’ll note in the SR3 -the redacted person(s) is in conjunction with Huawei exerting pressure on HSBC…
in December of 2017 HSBC issued a Press Release that it’s five year DPA with the DOJ had concluded.
“..United Kingdom-based global financial services company HSBC Holdings plc (HSBC) entered into a deferred prosecution agreement (DPA) and agreed to pay a $63.1 million criminal penalty and $38.4 million in disgorgement and restitution to resolve charges that it engaged in a scheme to defraud two bank clients through a multi-million dollar scheme commonly referred to as “front-running.” The DPA, which was filed in connection with a two-count criminal information charging wire fraud in the United States District Court for the Eastern District of New York, is pending review by the Court..”
Jan 8, 2020 USA v. Seventy-One Million Eight Hundred Fifty Thousand ($71,850,000.00) in United States Currency - Case No 1:20-cv-20068 COMPLAINT for Forfeiture in Rem against Seventy-One Million Eight Hundred Fifty Thousand ($71,850,000.00) in United States Currency, Composite Exhibit A
Huawei IP Indictment -TMobile Tappy
Case No 2:19-cr-00010-RSM - styled as United States v. Huawei Device Co., Ltd. - filed on January 16, 2019;
INDICTMENT as to Huawei Device Co., Ltd. (1) counts 1, 2, 4-5, 7, 10, Huawei Device USA, Inc. (2) counts 1, 2, 3, 6, 8-9, 10.
Our Government’s ongoing prosecution of Huawei’s unlawful economic espionage (technically Huawei stole T-Mobile’s intellectual property) whereby Huawei allegedly stole T-Mobile’s Tappy which was a testing robot that T-mobile used to test users and phone behavior. It’s hard to enumerate how valuable Tappy was to T-Mobile…
And if you’re wondering why this criminal case seems to have gone dark, well that’s largely due to the February 2021 Revised Scheduling Order - THIRD AMENDED CASE SCHEDULING ORDER as to Huawei Device Co., Ltd., Huawei Device USA, Inc. Oral Argument in case as to Huawei Device Co., Ltd., Huawei Device USA, Inc. on 53 , 54 , 55 and 57 set for 4/19/2022 at 09:00 AM; Jury trial set for 10/17/22
So when you might have thought I was completely off the mark about Defendant Meng, Huawei and 5G —do you know why T-Mobile and Sprint’s merger was on the DOJ’s anti-trust radar? The merger which hit a lot of skids but ultimately went through - makes T-Mobile & Sprint the largest 5G carrier….
Divestiture Will Enable DISH’s Entry as a Fourth Nationwide Facilities-Based Wireless Competitor and Expedite Deployment of High-Quality 5G for American Consumers
Following the trial in New York v. Deutsche Telekom, Judge Victor Marrero of the U.S. District Court for the Southern District of New York has refused a request from a minority of state Attorneys General to block T-Mobile’s proposed acquisition of Sprint. In his opinion, Judge Marrero cited the Justice Department’s settlement as a key factor, noting that the Justice Department’s settlement made Dish “well poised to become a fourth MNO in the market, and its extensive preparations and regulatory remedies indicate that it can sufficiently replace Sprint’s competitive impact.”
And with that I think you have a far more fulsome and comprehensive understanding of what the DPA means. Specifically the various tentacles, for example how it was the HSBC DPA that lead EDNY prosecutors to uncover this scheme… but here’s my closing argument that the DPA does have counterintelligence component - see the last signatory - also super fun fact Trump put immense pressure on Richard Donoghue3 (see possible political interference re Barrack Indictment) to buy into Trump’s Big Lie and use the Department of Justice as a cudgel in his attacks questioning the validity of the 2020 Election… I’m not saying Donoghue did anything improper but it is something that caught my attention once I pulled back to see a bigger picture
you can access additional court filings via my Scribd Account - as always if you have questions please feel free to leave a comment and I’ll do my best to provide you a factually response. -Filey
F_ck, I hope that there's more to it than this, too. I know Canada/US are strained over the situation, but China is counting on a weak response/capitualtion, as Xi continues to target Canadians in China
As you can imagine, this was all over my local News. An anticipated plea deal was being reported early in the morning. It was a big surprise how quickly the Michaels were out of China. I guess the PCP wanted to make clear that retaliation was the point despite denials. Be interesting to see guidance to those doing business in China?
Re: China’s underbelly ongoing infiltration
F_ck, I hope that there's more to it than this, too. I know Canada/US are strained over the situation, but China is counting on a weak response/capitualtion, as Xi continues to target Canadians in China
As you can imagine, this was all over my local News. An anticipated plea deal was being reported early in the morning. It was a big surprise how quickly the Michaels were out of China. I guess the PCP wanted to make clear that retaliation was the point despite denials. Be interesting to see guidance to those doing business in China?