California Company Owner Accused of Smuggling $300 Million in AI Hardware to China
Federal prosecutors have arrested a company owner accused of smuggling more than $300 million worth of artificial intelligence hardware to China via Malaysia and Singapore, bypassing restrictions.
US authorities announced that a technology company owner in the San Gabriel Valley smuggled restricted Nvidia computer hardware to China by using false destinations.
Details of the Operation
According to an indictment filed by federal prosecutors, Greg Lui, the owner of Earthmade Computer Inc. in the City of Industry, was arrested on Thursday. Lui is accused of selling high-end computer servers containing US-made Nvidia chips to the Chinese government.
False Routes and Shipping Methods
The suspects reportedly provided false documents to chip manufacturers indicating that the products would go to Malaysia and Singapore, but the servers were redirected to China through freight-forwarding companies. The US Department of Commerce does not require an export license for shipments to these two countries while requiring one for China.
Legal Charges and Evidence
Greg Lui has been charged with conspiracy to violate export controls, outbound smuggling, and money laundering. The prosecution submitted evidence to the file such as bank records, emails, and multi-million-dollar purchase orders.
Financial Transactions and Shipments
Prosecution authorities stated that Earthmade received more than $176 million in 2024 from two Malaysia-based shipping companies under this scheme. The shipments included powerful chips that can be used in artificial intelligence applications and large language models.
Emphasis on National Security
Acting US Attorney Bill Essayli drew attention to the importance of preventing advanced technology from strengthening the military capabilities of rivals in terms of protecting national security.