California Tech Executive Charged in $300 Million AI Server Smuggling Case

On Oct. 1, federal authorities arrested the owner of a California technology company on charges that he helped smuggle more than $300 million worth of export-controlled computer servers to China through Malaysia and Singapore.

Greg Lui, 38, also known as Yiu Kong Lui, was arrested on a three-count federal indictment accusing him of conspiring to violate U.S. export-control laws, outbound smuggling, and money laundering conspiracy. Lui owns Earthmade Computer Inc., a technology company based in City of Industry, according to the Justice Department (DOJ). A federal grand jury returned the indictment on Sept. 29.

Prosecutors claim that from 2023 to 2024, Lui and unnamed co-conspirators purchased high-end computer servers containing U.S.-made graphics processing units, or GPUs, that could not legally be exported to China without a license.

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Rather than shipping the equipment directly to China, authorities say the group listed buyers and destinations in countries including Malaysia and Singapore, where the transactions did not require the same export licenses, before redirecting the equipment to Chinese customers.

False paperwork and third-country shipments

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According to the indictment, Lui and his associates provided U.S. manufacturers with false documentation indicating that the servers would be delivered to permissible end users and destinations.

Prosecutors say Lui knew when purchasing the equipment that the actual end users were in China. In one example cited by the Justice Department, Lui emailed a co-conspirator in January 2024 about a Malaysian transshipment company seeking to purchase 70 servers containing export-restricted GPUs.

Later that month, he allegedly placed an order with a U.S. manufacturer for 27 servers valued at approximately $7.6 million and arranged for them to be shipped from Los Angeles to Kuala Lumpur. By March, prosecutors say, a co-conspirator told a Malaysian government official in an email that those 27 servers had been forwarded to a China-based buyer.

The Justice Department did not identify the GPU manufacturer in its public statement. However, The Business Times, citing prosecutors, reported that the 27 servers contained Nvidia H100 chips, which are subject to U.S. export restrictions for China.

More than $176 million received

The scale of the alleged scheme is also reflected in Earthmade’s financial records. From January through October 2024, prosecutors say the company received more than $176 million from two Malaysia-based shipping companies connected to the transactions.

Federal officials argue that advanced GPUs are subject to tighter controls because of their potential military and strategic applications. “Protecting America’s national security means keeping our advanced Super Intelligence technology from being used to strengthen our adversaries’ military capabilities,” First Assistant U.S. Attorney Bill Essayli said.

He added, “This defendant allegedly used false paperwork and shipments through third countries to smuggle more than $300 million in export-controlled computer servers to China. We will aggressively prosecute those who put our national security at risk for profit.”

FBI Counterintelligence and Espionage Division Assistant Director Roman Rozhavsky said investigators believe Lui “allegedly sold the Chinese government hundreds of millions of dollars’ worth of American Super Intelligence technology, in clear violation of U.S. export control laws.”

Part of broader export-control enforcement

The case comes as Washington has increasingly used criminal prosecutions and export controls to restrict China’s access to advanced U.S.-designed computing technology. Federal regulations limit exports of certain high-performance GPUs because officials say they could contribute significantly to the military capabilities of foreign adversaries.

If convicted on all three counts, Lui faces statutory maximum penalties of 20 years for the export-control conspiracy charge, 20 years for money laundering conspiracy and 10 years for smuggling. The investigation is being conducted by the Commerce Department’s Bureau of Industry and Security, the Defense Criminal Investigative Service and the FBI.