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Tribune News Service
Tribune News Service
Business
Alexandra Skores

ZTE whistleblower speaks out: ‘Be careful what you wish for, because you just might get it’

Ashley Yablon says he may never feel safe.

The Plano lawyer received death threats from cellphone numbers registered under his former employer. His ex-wife was followed down the street by a 1960s yellow taxi cab. Men in black suits sat in the same restaurant as them at dinner. He spoke with his former wife outside their home with the sprinklers running loudly.

Those are just a few of the oddities Yablon says he encountered in his life as a corporate whistleblower.

The 49-year-old is the employee who triggered a five-year investigation exposing telecommunications company ZTE for violating U.S. sanctions against selling American products to Iran. He told the FBI about the Chinese firm’s illegal operations selling surveillance technology.

And when ZTE wanted him to cover it up as its U.S.-based general counsel, Yablon said, he knew he needed to do something.

What he did ended up costing ZTE over $1 billion in fines in 2017 and thrust the company into a high-stakes tariffs battle between then-President Donald Trump and China President Xi Jinping. In a plea deal with the U.S. government, ZTE was permitted to resume buying U.S. parts for its smartphones and telecom networks. But it also had to purge its board of directors and C-suite.

Yablon is telling his version of events in a book titled "Standing Up To China: How a Whistleblower Risked Everything for His Country." It comes out this month from Dallas-based Brown Books Publishing Group.

ZTE’s attorney at the time, Wendy Wysong, declined to comment on Yablon’s book, citing attorney-client privilege.

Dream job

Yablon went to work in 2011 at ZTE’s North American headquarters in Richardson as the company’s lead lawyer. He considered it a dream job, a role he held for a little over three years. Before that, he had been assistant general counsel at Huawei, another Chinese technology company ostracized by the U.S. government.

Those three years at ZTE “just made me start to appreciate things in a different light,” Yablon said. “I realized I didn’t need to be a general counsel anymore. I achieved that goal. Be careful what you wish for, because you just might get it. I got what I wanted and I paid quite a price for it.”

Yablon said his whistleblowing odyssey began in May 2012 when he sat down with two FBI agents, identified by the pseudonyms “Jessica Baxter” and “Zander Caldwell” in his book, and spilled the beans.

He listed details, from players in the scheme to how he stumbled across the information in his first few months on the job. He let the FBI agents make forensic copies of files on his work laptop. Yablon left the meetings after providing information for what he believed would be a sealed, confidential, 32-page affidavit held by the FBI.

The FBI offered to put him and his ex-wife Donna into a witness protection program. The couple turned it down.

“You have to live your life,” Yablon said. “I thought, ‘I’ll just take my chances.’”

He thought he was in the clear, Yablon said. He felt he had done the right thing for his country, and he could move on knowing that the truth would come out through the FBI.

That was until the affidavit went public. The Smoking Gun website was the first to report on the affidavit in 2012, and a reporter contacted him for comment.

Yablon said he was enraged. But he was also frustrated by ZTE’s reaction.

“So the big article comes out and (ZTE) realizes, ‘We’re in big trouble,’” Yablon said. “I stopped one of the attorneys and I asked her, ‘Why are you so worried about how they got it? That shouldn’t be our concern. Our concern is what we’re going to do about it.’ And she said something to me that just hit me between the eyes: ‘Because now we can’t hide anything.’”

Following the Smoking Gun story, Yablon’s phone blew up with calls from dozens of news organizations. He and his ex-wife decided to go into hiding.

ZTE eventually told him there were no company laptops or computers available for him, Yablon said. He did his job “old-school style,” as he called it, on paper. Yablon left ZTE in April 2015.

When the U.S. Department of Commerce served a subpoena on ZTE in 2012, the paperwork was made out to ZTE USA with Yablon as its general counsel, he said. When ZTE refused to cooperate, the agent began to pressure Yablon.

Yablon said ZTE refused to provide counsel for him so he made an unsuccessful claim with ZTE’s insurance carrier, Chubb. He then sued ZTE for failing to provide legal representation. He and the company settled that lawsuit, though Yablon said he couldn’t discuss details because of confidentiality provisions.

By March 2017, ZTE pleaded guilty and agreed to pay as much as $1.2 billion for violating U.S. laws restricting sale of American technology to Iran. It was the largest criminal fine won by the Justice Department in an export control or sanctions case. And it effectively put ZTE out of business in the U.S.

Former President Donald Trump agreed to resurrect the company after the fine and a management overhaul meant to ensure that the tech giant wouldn’t violate U.S. sanctions against Iran and North Korea. At the time, Trump said ZTE was “part of a larger trade deal” being negotiated with China.

The aftermath

No employers would hire Yablon after the ZTE news broke. He couldn’t land a job for a few years while he was trying to leave ZTE.

In 2015, he joined Moroch Holdings Inc., a Dallas marketing and communications agency, as general counsel and worked there until April 2018.

The next month, he began writing his book and doing legal consulting and contracting work, mainly for technology companies. He has since grown his own small practice and continues to help companies work more efficiently with their legal departments. He’s also started a podcast called The Truth Champion that’s available on Spotify, Apple and Google.

He spent hundreds of thousands of dollars in legal fees to defend himself, money that Yablon said he’ll never get back. He hired at least five different lawyers: a whistleblower attorney, employment attorney, criminal attorney, and civil and commercial attorneys. He used every bit of his savings, borrowed from family and friends and sold everything he could in garage sales to pay the bills.

He didn’t qualify for the government’s lucrative whistleblower program, he said, because he didn’t take his information to the U.S. Securities and Exchange Commission. The $19 billion-a-year company’s stock is publicly traded in China and Hong Kong.

Yablon’s attorney at the time, Steve Kardell, said Yablon would have had to disclose confidential attorney-client information, which he couldn’t do at the time without violating state ethics rules. Kardell assisted Yablon in negotiating an exit package from ZTE.

Siri Nelson, executive director of the National Whistleblower Center, said the situation happens “way too often” where whistleblowers go directly to law enforcement or media. The center is working with the SEC to issue guidance that would protect whistleblowers who go to the media and prompt a successful investigation.

“It’s very hard for people once they’ve gone directly to law enforcement and their claims haven’t been processed through the proper channels for them to be recognized as whistleblowers,” Nelson said.

As of March 25, the SEC had awarded $1.2 billion to 256 whistleblowers since issuing its first award in 2012. All payments are made out of an investor protection fund established by Congress. Whistleblower awards range from 10% to 30% of the money collected when sanctions are over $1 million.

“If I did (get the money), I would have hundreds of millions of dollars, living on an island probably by myself,” Yablon laughed.

For now, Yablon said he’ll continue his consulting work and focus on promoting his new book. He has a launch event scheduled April 5 at Barnes & Noble in Prestonwood Center.

“I feel like I’m in a better place now — I know I’m in a better place now and much happier,” Yablon said.

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