Ruling and evidence
A judge in Brooklyn federal court has determined that a senior finance executive's own written admission can be used by prosecutors in the forthcoming criminal case against the company she serves. The admission, contained in a four-page statement of facts that accompanied a 2021 deferred prosecution agreement, acknowledges that the executive lied to a financial institution about the company's compliance with sanctions and export control law. The judge explicitly found the statement admissible at trial.
Judge's reasoning
U.S. District Judge Ann Donnelly wrote that the executive "Meng was - and is still - Huawei Tech’s CFO," and that the company should not be able to block the admission of a statement made by a senior officer about actions taken in connection with her job simply because the company adopted that statement. The court rejected the argument that prosecutors could not use the executive's admission against the firm on the grounds that the company had the right to remain silent. The judge additionally said it would not be necessary for the company to question the executive at trial for the statement to be used.
Where the admission came from
The admission by Chief Financial Officer Meng Wanzhou was part of a 2021 resolution in which she entered into a deferred prosecution agreement. In a four-page statement of facts attached to that agreement, she acknowledged lying to a financial institution about Huawei's adherence to sanctions and export control regulations. That agreement was reached in 2021 and called for the criminal charges she faced to be later dismissed.
Company response
A spokesperson for the company did not immediately answer a request for comment on the ruling.
Background on the executive's case
The executive was arrested in 2018 after landing in Vancouver on a U.S. warrant tied to an indictment that alleged she and the company had misled banks, including HSBC and other banks, about the firm's business activities in Iran. She spent nearly three years under house arrest in a six-bedroom, multi-million-dollar Canadian residence while contesting extradition to the United States. In an atypical step during the COVID-19 pandemic, she appeared in court remotely from Vancouver in September 2021 to enter the deferred prosecution agreement, and subsequently returned to China.
Diplomatic aftermath
Shortly after the executive's departure from Canada, authorities in China released two Canadians who had been detained, and two American siblings who had been prevented from leaving China were allowed to return home. The deferred prosecution agreement included language that led to the later dismissal of the charges against the executive.
Ongoing case against the company
Despite the resolution of the executive's individual criminal exposure, legal proceedings against the company itself have continued. Beyond the original allegations of misleading banks, a superseding indictment names additional allegations including theft of trade secrets and other crimes. Since 2019, U.S. authorities have placed restrictions on the company's access to U.S. technologies, asserting activities at odds with U.S. national security; the company denies those allegations.
Business developments
The company has continued to evolve commercially, moving into areas such as components for smart vehicles and playing a prominent role in China's development of artificial intelligence. Those business developments have occurred alongside the legal challenges described above.
Next steps in the court process
The criminal case against the company is headed toward trial, with jury selection scheduled to begin on September 8.
Note: This article sticks to facts presented in the court ruling and subsequent publicly reported developments regarding the executive and the company. It does not include additional commentary or analysis beyond those facts.