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back to article FBI investigates ZTE cover-up allegations

The FBI has opened a criminal investigation into allegations that Chinese telecoms kit maker ZTE flouted United States laws by selling technology from US firms to Iran and then deliberately covering its tracks once the media caught wind. The Smoking Gun claims to have obtained a top secret FBI affidavit which reveals that senior …

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Anonymous Coward

Trade embargo on sales of Microsoft products?!

I had always assumed that it was in the USA's strategic defence interest to saturate the markets of Iran, Syria, North Korea, and Cuba with as many Microsoft products as possible.

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Headmaster

Big Brother says

You will do as I say, not do as I do!

Another example of the school yard bully trying to get his way.

Sadly there is a 'I'm scared of you culture' so many Countries do more than is necessary to keep the US happy.

It is only when you confront the school yard bully that things will change.

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Re: Trade embargo on sales of Microsoft products?!

I can happily say that a of of Cuban pc's were running Windows XP, 5 years ago. Either pirated or shipped via Canada or Venezuela like a lot of US goods are.

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Anonymous Coward

Defence strategy

Yep, how are the US and Israeli gummints going to be able to create computer viruses targeting activities in countries they don't like if they don't first saturate those countries with a US operating system with rather, erm, porous security?

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Anonymous Coward

Re: Defence strategy

PROMIS

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Anonymous Coward

Re: Defence strategy

What's a gummint ?

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but ZTE isnt an american firm

So how can it be subject to american laws? true they have a presence in the US but still, if this comes from head office then..

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Re: but ZTE isnt an american firm

From how the article reads, it appears to be a case that they willfully misrepresented the purpose of purchases from the US in order to buy them, then turned about and resold the kit where it wasn't allowed to go. It's a resale question, just like at wholesale places you may get asked if an item is for resale. If so, they don't charge you tax as you're going to charge the end-user that.

So yeah... fraud to bypass export controls.

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Re: but ZTE isnt an american firm

If you read the article they made US subsidiary companies to do the buying.

If over the telephone I told you to commit crimes on UK soil would I not be held responsible?

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Anonymous Coward

"ZTE isnt an american firm So how can it be subject to american laws?"

An excellent question which certain readers would prefer to remain unasked.

So thank you for asking it, and those who want to know more about how it works in general can go read about "extraterritoriality".

There is an IT connection too, albeit one that predates the Internet and therefore there's not that much to read, and what there is may not be reliable (on either side), albeit one which does include product of US origin so the US legislation arguably is relevant.

Systime Computers, a UK company (Leeds) making low(er) cost computers based on some genuine DEC parts for the essentials and some cheaper-than-DEC commercial/industrial equivalents where applicable (cabinets, cables, power supplies, memory, disk...), were "leaned on" by the US Govt and eventually ended up going under, allegedly because of export control violations.

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Anonymous Coward

"The main revelations in the affidavit come from Ashley Yablon, an attorney with ZTE’s US subsidiary. [....] has handed over the files on his work laptop to the FBI."

I am missing something here, doesn't this mean that the attorney betrayed the trust of his employer? or was he required to hand over those documents?

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Anonymous Coward

I suspect that any contractual commitment to his employer does not include "aid, abet, and keep quiet about any obvious breaches of law". And most professional commitments to client confidentiality would be over-ridden by a commitment to uphold the laws of the land, plus any relevant whistle blower protection laws. Exact details will depend (I suspect) on the state and federal laws, and the particular rules of his state bar association or similar, but I'd expect he's on safe ground.

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Boffin

".....doesn't this mean that the attorney betrayed the trust of his employer?...." Client attorney privellege does not cover new crimes commited whilst the attorney is acting in the interest of a party. Say Mr A murders Mr B and retains Mr C as hs lawyer. Mr A tells Mr C that he did commit the crime, but client-attorney priv applies. Mr C then witnesses Mr A making an attempt to obstrcut justice by killing the only witness - as an officer of the court, the attorney is obliged to report the crime and his client's actions or be tried as an accessory. By the sounds of it, teh attorney reported ZTE's efforts to obstruct the investigation.

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No, even in the first case

if the client admits to having committed the crime, as an officer of the court the attorney is required to report it. What happens is if Mr. A murdered Mr. B, he hires the attorney and tells him he wants to plead Not Guilty. So long as Mr. A does not admit to it, the attorney is obligated to defend him, and any discussions they have about the case are protected.

Unless of course you have a court-appointed lawyer and the state has decided you have to hang in order to prevent a race riot, in which case, any excuse to get you out of defending the client is acceptable.

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Anonymous Coward

the attorney betrayed the trust of his employer?

America has the best lawyers money can buy.

"Yablon is a 39-year-old attorney who was hired as general counsel by ZTE’s U.S. subsidiary in Dallas last October. He came to the company from a ZTE rival firm, Huawei Technologies." (source:http://www.wired.com/threatlevel/2012/07/fbi-zte/ )

So not only did he grass up his new employers, he presumably also broke the usual "no compete" contracts. Almost makes you wonder if someone motivated him to do it.

Huawei are a reputable company trusted to supply core network equipment (voice and data) to almost all the world's biggest telcos.

Lawyers, on the other hand...

Meanwhile, the "mass snooping" capability underlying much of this fuss is known in the trade as "lawful interception" (sometimes "legal interception") and is a routine part of any telecom vendor's core voice network equipment and capabilities. It's been there for ages, but modern digital technology allows it to work on a much broader scale than back in the olden days of System X and before Nortel went bust [1].

Nothing to see here, move along or get what Ian Tomlinson got.

[1] did you know that tens of thousands of Nortel UK pensioners are STILL waiting to know where they stand, even though it's nearly 4 years since Nortel UK went bust. how about an article on THAT, el reg? couldn't just cut+paste a press release though

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Happy

Re: the attorney betrayed the trust of his employer?

Huawei are a reputable company trusted to supply core network equipment (voice and data) to almost all the world's biggest telcos

Thanks. You just gave me the best laugh of the week.

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Anonymous Coward

Re: Huawei are a reputable company trusted ...

"You just gave me the best laugh of the week"

No probs. I chose the wording carefully, especially for that reason.

But like it or not, Huawei do supply significant kit to almost all the world's biggest telcos.

Not because Huawei are a trusted supplier, but because the know-nothings usually in control in the telcos and everywhere else perceive Huawei to be "cost effective" (can't say "cheap" any more).

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Anonymous Coward

ZTE flouted United States laws?

> The FBI has opened a criminal investigation into allegations that Chinese telecoms kit maker ZTE flouted United States laws by selling technology from US firms to Iran ..

Curious as to how they only ever go after foreign companies. Almost looks like the Feds are using such laws to stifle competition ...

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Re: ZTE flouted United States laws?

It's not foreign companies per se. It's actually any company that hasn't ponied up their quarterly protectio-, I mean campaign donations. And since foreign corps aren't allowed to make campaign donations that means they are all subject to normal prosecution.

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