By Karen Freifeld

NEW YORK, April 4 (Reuters) - The U.S. Justice

Department's long-running criminal case accusing China's Huawei

of misleading banks about the tech company's business in Iran,

among other charges, is heading toward a January 2026 trial.

At a status conference on Thursday in Brooklyn, New York,

Assistant U.S. Attorney Alexander Solomon told U.S. District

Judge Ann Donnelly that "settlement discussions ended in an

impasse. We believe it would be prudent to schedule a trial

date."

The judge said she thought a "good placeholder" date for the

trial to start would be the beginning of January 2026.

The case, which has long strained U.S.-China ties, began in

2018 with a sealed indictment that led to Huawei CFO Meng

Wanzhou being detained in Vancouver, Canada, on a U.S. warrant.

As part of a 2021 deal, the charges against Meng, who is

also the daughter of the company's founder, were dismissed.

The broader case against Huawei is pending. Huawei has

pleaded not guilty.

Solomon said prosecutors expect the trial to last four to

six months.

Douglas Axel, a lawyer for Huawei, said the company has a

pending motion to split the case, essentially separating the

bank fraud charges from the allegations of trade secret theft.

But the government suggested they would oppose a split and that

the charges were linked.

Huawei was indicted in 2018 on bank fraud charges of

misleading HSBC and other banks about its business in Iran,

which is subject to U.S. sanctions.

In 2020, the Justice Department added more charges to the

case, including that Huawei allegedly conspired to steal trade

secrets from six U.S. technology companies and helped Iran track

protesters during anti-government demonstrations in 2009.

Meng entered a deferred prosecution agreement with U.S.

prosecutors in Sept. 2021 in which she acknowledged having made

false statements about Huawei's Iran business.

After an unusual virtual hearing, she was allowed to fly to

China from Canada. Shortly afterward, China released two

Canadians it had been holding, and two American siblings who had

been prevented from leaving the country were allowed to fly

home.

Since 2019, the U.S. has restricted Huawei's access to U.S.

technology, accusing the company of activities contrary to U.S.

national security, which Huawei denies.

The company reported its fastest growth in four years in

2023, with a rebound in its consumer segment and income from new

businesses like smart car components accelerating its recovery

from the U.S. restrictions.