A technology company CEO, Greg Lui, from Southern California, United States, was arrested on October 1st on federal charges of smuggling chips to China. According to the federal grand jury, he was accused of smuggling GPU chips produced in the United States to China, with a value exceeding $300 million. These chips, typically used for artificial intelligence image processing, are products subject to U.S. export controls.
The 38-year-old Lui, also known as Yiu Kong Lui, resides in San Gabriel, Los Angeles County, as stated by the U.S. federal prosecutors in a news release on Thursday, October 1st.
Lui faces charges of conspiracy to violate the Export Control Reform Act, smuggling goods overseas, and conspiracy to commit money laundering. Prosecutors allege that the defendant used false documents, intricate shipping arrangements, and attempts to mislead inspectors to smuggle controlled computer servers and chips to China.
The Prosecutor’s Office stated, “These chips represent the ingenuity of U.S. innovation, and the National Security Department will continue to enforce export control laws to safeguard this advantage.”
According to the indictment presented by the federal grand jury on September 29th, Lui’s company, Earthmade Computer Inc., is a technology company located in the City of Industry in Southern California.
The indictment reveals that between 2023 and 2024, Lui and his co-conspirators, under the guise of the company, purchased prohibited items for export to China without obtaining the required export licenses from the U.S. Department of Commerce. To circumvent licensing requirements, Lui and his associates provided false documents to manufacturers within the U.S., falsely claiming that the products would be sent to approved end-users and destinations. These items were first shipped to countries like Malaysia and Singapore, where no such export permits were needed, before being illicitly redirected to China.
Prosecutors allege that between January and October 2024, Earthmade received over $176 million from two transport companies based in Malaysia.
The indictment indicates that Lui knowingly violated U.S. government regulations aimed at protecting national security and foreign policy interests by exporting such high-tech items to China.
For instance, in January 2024, Lui sent an email to a co-conspirator stating that a Malaysian shipping company wanted to purchase 70 servers with restricted GPUs. In the email, Lui attached an export compliance form showing that the company was aware of U.S. export laws restricting the sale, shipping, or export of these specific servers.
Later that month, Lui placed a purchase order with a U.S. manufacturer for 27 servers amounting to approximately $7.614 million. Subsequently, he and a co-conspirator arranged for the servers to be shipped from Los Angeles to Kuala Lumpur, Malaysia. The packaging list for the shipment explicitly stated that it contained 27 servers with GPUs, products subject to export controls that should not be sent to China without the requisite permits.
In March 2024, a co-conspirator informed a Malaysian government official via email that the 27 servers had been shipped to a buyer in China.
It is important to note that the charges in the indictment are allegations. Lui is scheduled to appear for his initial trial at the U.S. Federal District Court in downtown Los Angeles on Friday, the 2nd.