Federal prosecutors say the owner of a California computer company smuggled more than $300 million in restricted AI chip servers to China by routing them through other countries. Greg Lui, 38, of San Gabriel was arrested Thursday, October 1, and was due in federal court in downtown Los Angeles that afternoon to be arraigned, the hearing where a defendant is formally told the charges. The chips are restricted because they power advanced artificial intelligence and, the government says, could add to another nation’s military strength.
Story Snapshot
- Lui, who is also known as Yiu Kong Lui, owns Earthmade Computer Inc. in the City of Industry.
- A three-count federal indictment accuses him of sending the servers to China without export licenses.
- Prosecutors say the servers went first to Malaysia and Singapore, where no license is needed.
- He faces up to 20 years in prison on each of the two most serious counts if convicted.
Federal Charges Tied to Export-Control Evasion
A grand jury returned the indictment on September 29. An indictment is a formal charge, not a finding of guilt. It accuses Lui of conspiracy to violate the federal export control law, smuggling goods out of the country, and conspiracy to commit money laundering. Prosecutors say Lui and others sent more than $300 million in high-end servers to China in 2023 and 2024. The servers held U.S.-made graphics chips, the powerful processors used to build and run artificial intelligence.
The rule at the center of the case is the export license. That is written permission from the U.S. Department of Commerce to sell certain technology to a buyer in another country. A sale of these servers to China requires one. Prosecutors say Lui knew the rule and went around it. Lui is accused, not convicted, and the government must still prove its case in court. No response from Lui or a lawyer for him was reported.
Alleged Transshipment Routes and False Paperwork
According to the indictment, the servers were shipped to Malaysia and Singapore and then sent on to China. Shipping goods through a middle country this way is called transshipment. Prosecutors say the paperwork gave false information about who the real buyers were and where the servers would end up, so the sales looked legal.
The indictment gives one example. In January 2024, prosecutors say, Lui ordered 27 restricted servers for about $7.6 million and had them shipped to Kuala Lumpur, Malaysia. They say an email from March 2024 confirmed the servers were then sent to a buyer in China. Prosecutors also say Earthmade took in more than $176 million from shipping companies based in Malaysia between January and October 2024.
Why This Case Matters Beyond One Defendant
These chips are restricted for a reason. Federal rules say such high-end chips could make “significant contributions to the military potential of other nations.” Prosecutors say Lui knew the United States bars their sale to China to protect national security. The top federal prosecutor’s office in Los Angeles said the goal is to keep the technology from strengthening the militaries of America’s adversaries.
Three federal agencies worked the case: the Commerce Department’s Bureau of Industry and Security, the Defense Criminal Investigative Service and the FBI’s counterintelligence division. The export count and the money laundering count each carry up to 20 years in federal prison. The smuggling count carries up to 10 years. No trial date has been reported.
Sources:
nypost.com, interestingengineering.com, usnews.com, forth.news
