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Date: 12-15-2023

Case Style:

David Lau, et al. v. ZTE Coporation, et al.

Case Number: 1:22-cv-01855

Judge: Carol Bagley Amon

Court: United States District Court for the Eastern District of New York (Kings County)

Plaintiff's Attorney:

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Defendant's Attorney: Fahad Anwar Habib, Stephen Joseph Brogan, Steven Thomas Cottreau, Emily Knox, James Ernest Gauch

Description: Brooklyn, New York personal injury lawyers represented the Plaintiffs who sued the Defendants on tort law theories.

1. This lawsuit seeks damages under the federal Anti-Terrorism Act (the “ATA”) on
behalf of American service members and civilians, and their families, who were killed or
wounded while serving their country in Afghanistan between 2012 and 2017. Plaintiffs seek to
hold ZTE and Huawei, two Chinese telecom companies and technology manufacturers,
accountable for their conspiracy with, and substantial assistance to, multiple Foreign Terrorist
Organizations (“FTOs”) targeting Americans in Iraq, Afghanistan, the Middle East, and Europe.
2. A third company, MTN, a South African technology company that focused on
telecoms, was also a key participant in the conspiracy alleged herein. While not a co-defendant
in this case, MTN’s conduct demonstrates what ZTE and Huawei also did because ZTE and
Huawei (alongside co-conspirator MTN) all responded to the same requests for assistance from
the same terrorist groups in the same markets at the same time.
3. Plaintiffs’ allegations are based on information derived from confidential
witnesses with direct and indirect knowledge of the alleged facts, internal company documents,
declassified military-intelligence reporting, congressional testimony and reports, press accounts,
and Plaintiffs’ recollections.
4. ZTE and Huawei (alongside co-conspirator MTN) are large multinational
companies that had lucrative business in Iran and Afghanistan that relied upon regular
transactions with counterparties that ZTE and Huawei (alongside co-conspirator MTN) knew
served as fronts for terrorist finance and logistics, and ZTE and Huawei (alongside co-
conspirator MTN) engaged in illicit, terrorism-sanctions-busting transactions with known
terrorist fronts in order to boost their profits. Those transactions aided and abetted terrorism by
directly funding, arming, and logistically supporting a terrorist campaign in Afghanistan that
stretched for nearly two decades, killing and injuring thousands of Americans.
Case 1:22-cv-01855 Document 1 Filed 04/03/22 Page 22 of 536 PageID #: 22
5. ZTE and Huawei (alongside co-conspirator MTN) provided two separate streams
of devastating assistance that ultimately flowed to benefit the al-Qaeda and Taliban terrorists in
Afghanistan who killed and injured Plaintiffs or their family members in attacks from 2012
through 2017.
6. First, ZTE and Huawei (alongside co-conspirator MTN) directly provided
funding, technology, weapons, services, and other assistance to the world’s worst sponsor of
terrorism, Iran’s Islamic Revolutionary Guards Corps (or “IRGC”), including its Lebanese
Hezbollah Division and Qods Force, in furtherance of the IRGC’s conspiracy to target and kill
Americans in the Middle East, including Afghanistan, in order to drive the United States from
the region. The IRGC relied upon such aid to facilitate attacks by its proxies in Afghanistan, al-
Qaeda and Iraq, both of whom joined the IRGC’s conspiracy to expel the United States from the
countries on Iran’s borders, Afghanistan and Iraq. Such assistance flowed through the IRGC,
including through Hezbollah and the Qods Force, and reached al-Qaeda and the Taliban, who
deployed the IRGC’s aid to sustain a successful nearly two-decades-long terrorist campaign
against Americans there.
7. Second, ZTE and Huawei (alongside co-conspirator MTN) made substantial
protection payments, in cash and “free goods,” to the Taliban, including its Haqqani Network, in
order to further the IRGC’s conspiracy and also redirect violence away from ZTE’s and
Huawei’s (alongside co-conspirator MTN’s) shipments, facilities, and projects in Afghanistan.
ZTE’s and Huawei’s (alongside co-conspirator MTN’s) protection payments to the Taliban
provided an equally potent stream of assistance to the terrorists, directly funding, arming, and
logistically sustaining the Taliban, including its Haqqani Network.
Case 1:22-cv-01855 Document 1 Filed 04/03/22 Page 23 of 536 PageID #: 23
8. This case reveals conduct that is far more depraved than even the ordinarily
culpable ATA defendant. Few ATA defendants have ever been credibly accused of the full
spectrum of behavior identified in this Complaint against ZTE and Huawei, both of whom
directly conspired with known fronts for designated terrorist organizations. In serving as full-
spectrum telecommunications and computing partners for Hezbollah, the Qods Force, and
Regular IRGC and, through these IRGC components, for long-standing IRGC proxies like al-
Qaeda and the Taliban, ZTE and Huawei aided every facet of the IRGC’s terrorist enterprise and
the broader IRGC Conspiracy that it served. Moreover, by making protection payments to the
Taliban, including its Haqqani Network, ZTE and Huawei provided a second equally potent
stream of value that also provided cross-cutting financial, logistical, and operational benefits to
the terrorists who committed the attacks that injured Plaintiffs and their loved ones.
9. ZTE and Huawei (alongside co-conspirator MTN) aided the terrorists because
they were co-conspirators with the IRGC, as each signed written agreements pledging to support
the “security” agenda of their counterparty “Iranian Shareholders” – which were themselves
fronts for the IRGC – which they and the IRGC both knew meant supporting the IRGC’s,
including Hezbollah’s and the Qods Force’s, industrial-scale exportation of terror targeting
Americans around the world, but most of all, in the two countries flanking Iran: Iraq to the west,
and Afghanistan to the east.
10. Here’s how the conspiracy worked. The IRGC led a conspiracy, the object of
which was to commit terrorist attacks on Americans in the countries bordering Iran, Afghanistan
and Iraq (the “IRGC Conspiracy”).
11. The IRGC established the IRGC Conspiracy after 9/11 and it continued until the
end of the conflict in Afghanistan.
Case 1:22-cv-01855 Document 1 Filed 04/03/22 Page 24 of 536 PageID #: 24
12. The co-conspirators along with the IRGC in the IRGC Conspiracy included the
terrorist organizations integral to or supported by the IRGC, including its subordinate Hezbollah
Division and Qods Force, al-Qaeda, the Taliban, including its Haqqani Network, and others.
Corporate fronts for the IRGC, including the telecom companies the IRGC controlled such as
MTN Irancell, the Telecommunications Company of Iran (“TCI”), and Mobile Communication
Co of Iran (“MCI”) were also co-conspirators.
13. The IRGC Conspiracy operated through its terrorist members to carry out attacks
on Americans, with the IRGC providing logistical and financial support. The attacks in this case
were all acts in furtherance of the IRGC Conspiracy. Every person and entity that agreed to join
the IRGC Conspiracy is therefore liable for the harm caused by these attacks.
14. ZTE and Huawei (alongside co-conspirator MTN) joined the IRGC Conspiracy
on the specific dates they agreed with known IRGC fronts (variously, MTN Irancell, TCI, and
MCI) to provide resources, technical materials, and technical support, and to support Iran’s
“security” objectives.
15. Each of ZTE and Huawei (alongside co-conspirator MTN) acted in furtherance of
that agreement to join the IRGC Conspiracy each time they provided money and other resources,
provided technical goods, such as cell phones and telecom infrastructure, assisted with technical
support, as was their obligation as joint venturers with and contractual counterparties to known
IRGC fronts, when they evaded U.S. sanctions in order to do so, and when they attempted to
obfuscate their respective roles. Each time ZTE and Huawei (alongside co-conspirator MTN)
did these acts in furtherance of the IRGC Conspiracy, such person assisted the IRGC
Conspiracy’s objective to attack Americans and furthered the IRGC Conspiracy’s ultimate
objective to expel the U.S. from Afghanistan and Iraq.
Case 1:22-cv-01855 Document 1 Filed 04/03/22 Page 25 of 536 PageID #: 25
16. ZTE and Huawei (alongside co-conspirator MTN), entered into the IRGC
Conspiracy with the IRGC, and acted in furtherance thereof in programmatic, and enduring ways
for well over a decade. ZTE and Huawei (alongside co-conspirator MTN) were one in spirit
with their IRGC terrorist partners because each calculated that, if they remained aligned with the
interests of their partners’ “Iranian Shareholders” – fronts for the IRGC – their company would
reap billions in profits by seizing a monopoly in one of the world’s fastest-growing and youngest
potential subscriber pools.
17. To earn their billions, ZTE and Huawei (alongside co-conspirator MTN) simply
needed to believe that the obvious, and vast, American bloodshed in Afghanistan and Iraq that
was sure to follow their decision was an acceptable price to pay to yield a profitable outcome for
their own shareholders and the “Iranian Shareholders” with whom they were at times joint
venture partners and at others explicit contractual counterparties.
18. Seasoned investors, however, know that any time one shareholder’s investment
does well, that means somewhere out there is another shareholder on the opposite side of the
issue, for whom the investment went badly.
19. For every shareholder who wins, there must be another shareholder in the world
who loses. But this is not a case about trading shares on the NASDAQ. In this case, the
“shareholders” who lost were not day traders who got crushed making an unwise stock pick.
They were the Plaintiffs, and others.
20. Plaintiffs were patriotic American servicemembers and civilians who volunteered
for hard, thankless, jobs on the other side of the world in Afghanistan. Some returned, badly
injured. Some never came back at all. None will ever be the same again. ZTE and Huawei
Case 1:22-cv-01855 Document 1 Filed 04/03/22 Page 26 of 536 PageID #: 26
(alongside co-conspirator MTN) played an enormous role in the sequence of events that led to
this outcome. Plaintiffs are among the victims. This lawsuit followed.
21. It is impossible to overstate the magnitude of ZTE’s and Huawei’s defilement of
the Anti-Terrorism Act. This case concerns one of the single most depraved, expansive,
deceitful, and persistent international corporate conspiracies since the end of World War II, led
by the IRGC and enabled by their corporate co-conspirators, ZTE and Huawei (alongside co-
conspirator MTN). There is little doubt that the IRGC conspiracy changed the trajectory of
Afghanistan, Iraq, and countless other countries.
22. This Complaint outlines the unprecedented nature of ZTE’s and Huawei’s
conduct, and it likely remains the tip of the iceberg. Few other defendants in the history of the
ATA have engaged in conduct as comprehensively violative, for more money, over a longer
period, with a more violent counterparty, with more devastating consequences, while
demonstrating a greater sense of corporate impunity. For more than a decade, ZTE and Huawei
funded, partnered with, and helped develop the technical capabilities for the world’s worst
terrorist organization – the IRGC – by entering into deals with notorious fronts for the IRGC and
pledging to assist with Iran’s “security” agenda – all while fraudulently concealing it from
everyone, including their own shareholders. While doing so, ZTE and Huawei – like their co-
conspirator MTN – also made protection payments directly to the IRGC’s Afghanistan proxies,
the Taliban, including its Haqqani Network.
23. ZTE and Huawei are two of the worst corporate sponsors of terrorism in the
history of the ATA. And because their behavior mirrored that of a co-conspirator, MTN, this
case is likely to be different than a typical ATA case because of what ZTE and Huawei have
done, and this Complaint is longer than many ATA complaints. ZTE and Huawei each funneled
Case 1:22-cv-01855 Document 1 Filed 04/03/22 Page 27 of 536 PageID #: 27
hundreds of millions in value to the terrorists in nearly every conceivable modality of terrorist
fund transfer: direct transactions with FTO fronts while knowing (and not caring) about the FTO
relationship; illicit acquisition of valuable American technologies; procurement bribes; “free
goods” kickbacks; black market purchasing; cash flow from the companies; and so on.
24. The evidence regarding these co-conspirators’ intent is even worse. Like the
IRGC fronts with whom they did business, ZTE and Huawei made shocking admissions in
writing, and then destroyed everything to try to cover their tracks (none succeeded completely).
Some Defendants lied to federal law enforcement. Witness intimidation was common. Innocent
Canadians were kidnapped to extort the United States and Canada.

* * *

Outcome: Plaintiffs requested that the Court:

(a) Enter judgment against Defendants finding them jointly and severally liable under the Anti-Terrorism Act, 18 U.S.C. § 2333;

(b) Award Plaintiffs compensatory and punitive damages to the maximum extent
permitted by law, and treble any compensatory damages awarded under the Anti-
Terrorism Act pursuant to 18 U.S.C. § 2333(a);

(c) Award Plaintiffs their attorney’s fees and costs incurred in this action, pursuant to 18 U.S.C. § 2333(a);

(d) Award Plaintiffs prejudgment interest; and

(e) Award Plaintiffs any such further relief the Court deems just and proper

Settled and dismissed with prejudice.

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