Prosecutors in the Eastern District of New York requested a conflict-of-interest inquiry into the work of Thompson & Knight and Wilson Sonsini Goodrich & Rosati attorneys in an intellectual property dispute Wednesday, saying that the firms are being paid by a U.S. subsidiary of Huawei, the Chinese tech company that has been linked to the crime under investigation.

Bo Mao, a Chinese citizen, was arrested in August while working as a visiting professor at the University of Texas at Arlington. He was charged with conspiracy to commit wire fraud. His case was moved to New York for reasons that prosecutors refused to reveal—one of several details that has been redacted or sealed in the case.

Reuters and The Wall Street Journal have reported that the Chinese company referred to in court papers as "Company 1" is Huawei, the telecom giant.

After his Texas arrest, Mao filed an affidavit saying he could not afford a lawyer, and he was assigned counsel from the Federal Defenders on that basis, according to prosecutors.

But now he's represented by lawyers from Thompson & Knight and Wilson Sonsini. Huawei initially agreed to pay the lawyers, prosecutors have said, alleging that a U.S.-based subsidiary of Huawei is now paying the bills.

The U.S. Attorney's Office is therefore requesting a Curcio hearing to settle the matter.

The five lawyers listed on Mao's court papers—Wilson Sonsini's Kate McCarthy, Michael Sommer and Moe Fodeman and Thompson & Knight's Marion Bachrach and Richard Roper—did not respond to requests for comment by phone and email Thursday.

Assistant U.S. Attorney Alexander Solomon signed the motion on a potential conflict of interest, explaining to U.S. District Court Judge Ann Donnelly of the Eastern District of New York that third-party payments must be carefully examined, especially in cases like this where the so-called third party is connected to the allegations.

"Notably, the defendant does not work for Company 1 or U.S. Subsidiary 1 … so the commitment by U.S. Subsidiary 1 to pay what are likely substantial legal fees to two expensive law firms demonstrates the closeness of the relationship between the defendant and Company 1, as well as the magnitude of Company 1's interest in the outcome of the instant litigation," Solomon wrote.

The payments could be introduced at trial as evidence of the existence of a conspiracy, Solomon wrote, or the lawyers' advice could be affected by who's paying their bills.

Both firms' engagement letters and payment agreements were provided for prosecutors' examination but are not being filed in open court, according to Solomon's letter.

Mao is accused of helping to steal proprietary technology from a California startup to help Huawei, according to court documents.

Public information officers for Huawei did not respond to requests for comment, and a spokesman for the U.S. Attorney's Office declined to comment.

A status conference in Donnelly's courtroom is set for Thursday afternoon.

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