A California technology company owner has been arrested on federal charges alleging that he helped smuggle more than $300 million worth of export-controlled computer servers containing US-manufactured graphics processing units (GPUs) to China.
The US Department of Justice said Greg Lui, 38, also known as Yiu Kong Lui, was arrested on October 1. Lui owns Earthmade Computer Inc., a technology company based in City of Industry, California. He is accused of using third countries and false documentation to bypass US export restrictions.
The case comes as US authorities continue enforcing restrictions on the overseas transfer of advanced computing technology, particularly hardware capable of supporting sophisticated artificial intelligence applications.
Credits: Yahoo News Singapore
DOJ Alleges Servers Were Routed Through Malaysia and Singapore
According to the indictment, Lui and his co-conspirators allegedly purchased export-controlled equipment between 2023 and 2024 and arranged for it to be shipped to China without obtaining the required licenses from the US Department of Commerce.
Instead of sending the servers directly to China, prosecutors allege that the group routed shipments through countries including Malaysia and Singapore, where the specific US license requirement did not apply. The equipment was then allegedly re-exported to China.
The DOJ said the servers contained high-end GPUs manufactured by companies specializing in computing technology used for what the department calls “Super Intelligence” applications. Authorities allege that Lui knew the actual end users of the equipment were in China.
Prosecutors further allege that false documentation was provided to US manufacturers, making it appear that the servers were intended for permissible destinations and end users.
Earthmade Received More Than $176 Million
The indictment details several transactions that prosecutors say illustrate how the alleged scheme operated.
In January 2024, Lui allegedly received an indication that a Malaysian transshipment company wanted to purchase 70 servers containing export-restricted GPUs. Later that month, he submitted a purchase order for 27 servers worth approximately $7.61 million.
The servers were shipped from Los Angeles to Kuala Lumpur, Malaysia. According to the DOJ, the packing documents identified the equipment as containing export-controlled GPUs that could not be sent onward to China without the necessary authorization.
A subsequent email in March 2024 allegedly indicated that the 27 servers had been transshipped to a buyer in China.
The Justice Department also said Earthmade received more than $176 million from two Malaysia-based shipment companies between January and October 2024 as part of the alleged scheme.
Three Federal Charges Filed Against Lui
Lui faces three federal charges: conspiracy to violate the Export Control Reform Act and Export Administration Regulations, outbound smuggling, and conspiracy to commit money laundering.
If convicted on all charges, he could face statutory maximum penalties of up to 20 years in prison for each of the conspiracy and money laundering counts, and up to 10 years for the smuggling count.
The case is being investigated by the FBI, the Department of Commerce’s Bureau of Industry and Security Office of Export Enforcement and the Defense Criminal Investigative Service.
US authorities have increasingly focused on preventing advanced computing equipment from reaching restricted destinations, making the case significant for the global AI hardware supply chain.
Credits: Benzinga
AI Chip Export Controls Face Another Test
Advanced GPUs are essential components of modern AI infrastructure, powering everything from large-scale model training to high-performance computing systems.
The alleged use of intermediary countries in the case highlights the challenges governments face in enforcing export controls when sophisticated technology can move through international supply chains.
For US technology companies, export restrictions create additional compliance requirements when selling high-performance computing equipment internationally. For enforcement agencies, identifying the actual destination and end user of hardware remains a central challenge.
The DOJ emphasized that the charges are allegations. Lui is presumed innocent unless and until proven guilty beyond a reasonable doubt in court.