US federal investigators carried out a sting against Huawei Technologies last month over suspicions that China’s largest smartphone maker was stealing glass technology from an American start-up, Bloomberg Businessweek reported on Monday, adding yet another layer to the already complicated espionage case against the company.
Akhan Semiconductor, an Illinois-based tech start-up, discovered that when its product – the diamond glass – was sent back from a San Diego laboratory owned by Huawei, it was severely damaged. The technology – Minaj Diamond Glass – covers the glass with a micro-layer of synthetic diamond and is believed to be six times harder than current smartphone screens.
Suspecting Huawei, which ordered the sample in 2017, of intellectual property theft, company founder Adam Khan reported it to the FBI. Investigators enlisted Khan and the company’s chief operating officer, Carl Shurboff, in a sting at the CES technology trade show in Las Vegas in January.
The investigation has not yet resulted in an indictment.
In a statement on Monday, Akhan said the company “believes that Huawei destroyed our product, shipped it to China without authorisation, subjected it to tests that it was not authorised to conduct, and returned most of it to us in pieces.”
“Akhan will continue to cooperate with law enforcement and work towards an expedient resolution to this matter,” the statement said. The company “is considering any and all legal remedies available.”
Huawei and the FBI did not respond to email requests seeking comment.
The sting came as the US expanded its efforts to crack down on intellectual property theft by China, particularly in the technology sector. Huawei, which was founded by a former People’s Liberation Army engineer Ren Zhengfei, has close ties to Beijing.
Last week, the US Department of Justice filed charges contending that Huawei stole trade secrets from a telecoms rival and violated US sanctions against doing business with Iran.
In two sets of indictments, a federal grand jury in New York charged Huawei and its chief financial officer, Meng Wanzhou, with money laundering, bank fraud, wire fraud and conspiracy. Huawei was also charged with conspiracy to obstruct justice. A separate indictment from Washington state accuses Huawei and its US affiliate Skycom, along with Meng, of stealing trade secrets from the telecommunications company T-Mobile.
Huawei and Meng have denied any wrongdoing.
Meng, whose father founded Huawei, was arrested by Canada on December 1 at the request of the United States. She is currently free on bail in Vancouver, and her next court date is set for March 6.
A report on Monday by The Globe and Mail said she and her lawyer Richard Peck were exploring a defence that claims the US charges against her are politically motivated.
Denmark, which has banned Huawei’s 5G telecoms equipment, said on Monday that it ordered the expulsion of two Huawei employees over work permits, though Danish police said the action was unrelated to spying. Also on Monday, Norway issued a warning about Huawei, citing an “espionage risk” because of its ties to Beijing.
A growing number of countries have banned Huawei equipment for security reasons, including Australia, Canada, Denmark, New Zealand and the US. The European Union, Germany, Poland and the United Kingdom are among those considering the ban.
Huawei has become a leading supplier of the backbone equipment for mobile networks because of its cheap prices. The company has consistently denied that its equipment could be used for espionage.
Additional reporting by Wendy Wu in Washington