US law enforcement arrests technology executive for allegedly diverting $300 million in GPUs to China in violation of export controls.
The United States has arrested Greg Lui, a 38-year-old owner of a San Gabriel Valley-based technology company, for allegedly smuggling more than $300 million worth of computer servers equipped with advanced graphics processing units to China.
According to the Department of Justice, the servers contained US-manufactured GPUs used for "superintelligence applications," which are subject to strict export restrictions. Prosecutors allege that Lui used his company to procure these controlled products while providing false documentation to American manufacturers, falsely identifying permissible end users and destinations that would not require export licenses.
To complete the scheme, Lui routed the servers through Malaysia and Singapore before exporting them to China. The indictment indicates he received more than $176 million from two Malaysian shipping companies involved in the operation.
By diverting advanced technology critical to the AI sector to China, authorities contend that Lui knowingly compromised US national security and foreign policy interests. He faces charges under the Export Control Reform Act, the Export Administration Regulations, along with counts of smuggling and money laundering. If convicted on all counts, he could receive up to 20 years in prison for export violations, 20 years for money laundering, and 10 years for smuggling high-technology products.
"Preventing the illegal export of controlled technology is critical to protecting our national security. These technologies provide core advantages to US forces, and ensuring they remain safeguarded prevents adversaries from exploiting them," said John E. Helsing, special agent in charge, in a statement.
Nvidia released a statement welcoming the prosecution, saying: "This case shows yet again that smuggling is a losing proposition, legally, economically, and technically. Our work with law enforcement has led to prosecutions, and we will continue to engage with law enforcement."