US agrees not to pursue fraud charges against Huawei CFO

Reuters and the CBC first reported that Huawei CFO Meng Wanzhou would appear in a Brooklyn federal courtroom today via streaming video and enter a plea regarding US charges against her. Canadian authorities arrested the Chinese executive in December 2018 on suspicion of violating US sanctions, and she has remained there on house arrest ever since, fighting US attempts at extradition. Hearings in her extradition case ended in August, with the ruling scheduled for October 21st.

Meng was indicted on fraud charges claiming the Chinese technology and telecommunications company misrepresented its relationship with an Iranian affiliate, along with accusations it stole intellectual property from T-Mobile. The 13-count indictment named Meng, Huawei, and two of its subsidiaries — Huawei USA and Skycom.

On Friday afternoon, Meng pleaded not guilty. Prosecutors submitted a statement of facts (pdf) asserting that in 2013 she told financial institutions the Iranian company Skycom was a partner of Huawei while knowing that Skycom was owned and controlled by a Huawei subsidiary to act as its agent in the region.

As part of the deal in making this admission, the prosecution says “Meng has agreed to the accuracy of a four-page statement of facts that details the knowingly false statements she made to Financial Institution 1.” They are withdrawing their request for extradition from Canada, and as long as she doesn’t commit any other crimes the charges will be dropped.

According to the Wall Street Journal, Justice Department officials under the Biden administration revisited negotiations that had broken down under President Trump. Its sources report that Huawei itself is not a part of the deal and will continue to fight its charges of fraud and trade secret theft.

Spokespeople for the US Attorney’s Office and Huawei have not commented publicly on the matter. A former Canadian diplomat told the CBC he expects her release would lead to China deporting two Canadians it arrested and charged with espionage following Meng’s arrest.

Update September 24th, 3:24PM ET: Updated to add Meng’s court appearance, not guilty plea, and prosecution agreement details.

Update September 24th, 4:14PM ET: Updated to add details from the plea and deferred prosecution agreement.