California Man's Smuggling Scheme Sent $300 Million in AI Hardware to China, Feds Say

Federal prosecutors arrested Greg Lui, 38, also known as "Yiu Kong Lui," on Thursday, October 1, 2026, on charges of smuggling more than $300 million worth of export-controlled computer servers containing Nvidia AI chips to China.

Who Was Charged

Lui, of San Gabriel, California, owns Earthmade Computer Inc., based in the City of Industry, California. He faces three federal charges: conspiracy to violate the Export Control Reform Act and the Export Administration Regulations, outbound smuggling, and conspiracy to commit money laundering.

How the Scheme Allegedly Worked

Prosecutors say that from 2023 through 2024, Lui and co-conspirators purchased high-end computer servers containing restricted Nvidia H100 GPUs — the most powerful graphics processing unit on the market, designed specifically for AI applications — and provided false documentation to US manufacturers naming permitted destinations that weren't the servers' actual end point. The equipment was then shipped to Singapore and Malaysia, where no US export license was required, before being forwarded on to customers in China. Prosecutors also allege the scheme involved staged dummy servers used to throw off inspectors.

The Money Trail

According to court documents, between January and October 2024, Lui's company, Earthmade, received more than $176 million from two Malaysia-based shipping companies connected to the operation — a payment figure separate from the over $300 million total value prosecutors assign to the full scheme. In one specific instance cited in the indictment, Lui allegedly purchased a server containing Nvidia H100 GPUs from a US manufacturer for about $7.6 million.

What Officials Said

First Assistant US Attorney Bill Essayli said: "This defendant allegedly used false paperwork and shipments through third countries to smuggle more than $300 million in export-controlled computer servers to China."

Why These Export Controls Exist

The US restricts export of advanced AI chips like the Nvidia H100 to China out of concern that the computing power could strengthen China's military and technological capabilities. Commerce Department licenses are required for direct shipments to China, but the department does not require a license for certain destinations like Singapore and Malaysia — the loophole prosecutors allege Lui exploited by routing shipments through those countries before forwarding them on to Chinese end users.

The Potential Penalties

If convicted on all counts, Lui faces statutory maximum penalties of 20 years for the export-control conspiracy charge, 20 years for the money laundering conspiracy charge, and 10 years for outbound smuggling — a combined maximum exposure exceeding 50 years in prison, though actual sentencing outcomes typically fall well short of statutory maximums.

Part of a Broader Enforcement Pattern

Lui's case is the latest in a string of similar prosecutions targeting AI chip smuggling to China. Last year, federal prosecutors in Los Angeles charged two Chinese nationals living in Southern California with illegally shipping tens of millions of dollars worth of Nvidia microchips to China without required licenses, also allegedly routing the equipment through Malaysia and Singapore. Separately, authorities have pursued charges against Super Micro Computer co-founder Yih-Shyan Liaw and two others over an alleged scheme to divert roughly $2.5 billion in Nvidia-equipped servers to China, and investigated Singapore-based Apex Logistics over similar allegations involving Southeast Asian intermediaries.

What This Reflects About US-China Tech Tensions

The case comes as Washington has increasingly turned to criminal prosecutions and export controls to restrict China's access to advanced US-designed computing technology, treating illegal chip smuggling as a direct national security concern given AI hardware's growing role in military and economic competition between the two countries.

What's Next

Lui's case will proceed through the US District Court for the Central District of California in Los Angeles. As with any criminal indictment, the charges remain allegations that prosecutors will need to prove in court. For continuing coverage, see the full Courthouse News report.