The owner of a California technology company has been arrested on federal charges alleging that he participated in a scheme to illegally export more than $300 million worth of high-end AI servers to China.
The U.S. Department of Justice announced that Greg Lui, 38, also known as Yiu Kong Lui, owner of Earthmade Computer Inc., was arrested in California following a three-count federal indictment.
According to prosecutors, the servers contained advanced U.S.-manufactured GPUs subject to American export controls. The hardware was allegedly routed through third countries in an attempt to circumvent restrictions on exporting advanced computing technology to China.
Lui and his alleged co-conspirators are accused of operating the scheme between 2023 and 2024, using countries including Malaysia and Singapore as intermediate destinations before the equipment was ultimately redirected to China.
Servers were allegedly routed through Malaysia and Singapore
According to the indictment, the group allegedly used false documentation to conceal the true destination and end users of the servers.
The scheme reportedly involved several steps.
First, Earthmade purchased export-controlled computer servers from manufacturers in the United States while documentation allegedly identified companies in countries such as Malaysia and Singapore as the intended customers.
Those destinations did not require the same export licenses that would have been necessary if the equipment had been shipped directly to China.
Once the servers arrived in Southeast Asia, prosecutors allege they were redirected and shipped to customers in China.
The FBI claims that the scheme involved hundreds of millions of dollars worth of advanced computing technology and that some of the equipment was ultimately intended for the Chinese government.
Financial records cited by prosecutors also show that Earthmade Computer Inc. received more than $176 million from two Malaysia-based shipping companies between January and October 2024 as part of the alleged operation.
One example outlined in the indictment involves an order from January 2024.
Lui allegedly submitted a purchase order worth approximately $7.6 million for 27 servers containing export-restricted GPUs. The equipment was shipped from Los Angeles to Kuala Lumpur, Malaysia.
In March 2024, according to prosecutors, a co-conspirator later informed a Malaysian government official that the 27 servers had been transshipped to a buyer based in China.
Lui could face decades in federal prison if convicted
Lui has been charged with three federal offenses: conspiracy to violate the Export Control Reform Act and Export Administration Regulations, outbound smuggling, and conspiracy to commit money laundering.
If convicted, the conspiracy to violate export-control laws carries a statutory maximum sentence of 20 years in federal prison.
The money-laundering conspiracy charge also carries a maximum sentence of 20 years, while the outbound smuggling charge carries a maximum of 10 years.
Taken individually, the three charges therefore carry statutory maximum penalties totaling as much as 50 years, although any actual sentence would ultimately be determined by the court if Lui is convicted.
The investigation is being conducted by the U.S. Department of Commerce's Bureau of Industry and Security Office of Export Enforcement, the Defense Criminal Investigative Service and the FBI.
The case comes amid increasingly aggressive U.S. enforcement efforts aimed at preventing restricted high-performance computing hardware from reaching China through third countries.
Advanced GPUs have become particularly sensitive because of their importance for training and operating increasingly powerful artificial intelligence systems, while strong demand for high-end Nvidia hardware in China has created incentives for alternative and potentially illegal supply channels.
Lui has not been convicted of any crime. The indictment contains allegations, and under U.S. law he is presumed innocent unless and until proven guilty beyond a reasonable doubt.
Discussion(0)