WASHINGTON/LOS ANGELES, October 2, 2026: A California technology-company owner has been arrested on federal charges alleging that he helped smuggle more than $300 million worth of export-controlled computer servers containing U.S.-manufactured graphics processing units to China, according to the U.S. Department of Justice.
The case is the latest U.S. enforcement action involving the movement of advanced computing technology to China. Prosecutors allege that the shipments were routed through third countries including Malaysia and Singapore in an effort to bypass U.S. export restrictions.
Who was arrested?
The Justice Department identified the defendant as Greg Lui, 38, also known as Yiu Kong Lui, of San Gabriel, California. Lui owns Earthmade Computer Inc., a technology company based in the City of Industry area.
Federal prosecutors charged him with conspiracy to violate the Export Control Reform Act and related regulations, outbound smuggling and conspiracy to commit money laundering. citeturn1search0turn1search1
What prosecutors allege
According to the indictment described by the Justice Department, Lui and alleged co-conspirators acquired high-end computer servers containing restricted GPUs from U.S. manufacturers between 2023 and 2024.
Prosecutors allege that the defendants knew the ultimate destination was China but represented other destinations and end users to U.S. suppliers. The servers were then shipped to countries including Malaysia and Singapore before allegedly being re-exported to China.
Why Southeast Asia was allegedly used
The Justice Department says the defendants used third-country routes to disguise the ultimate destination of the equipment. Malaysia and Singapore were among the countries named in the indictment.
Transshipment through another country can make supply chains more difficult to monitor, which is why U.S. export-control enforcement agencies closely examine unusual routing and end-user documentation for sensitive technologies.
A $7.6 million server order
The indictment cites an example involving 27 servers. According to prosecutors, Lui submitted a purchase order worth approximately $7.614 million and arranged for the equipment to be shipped from Los Angeles to Kuala Lumpur.
The Justice Department says the shipment documentation identified the servers as containing export-controlled GPUs. Prosecutors allege that the equipment was subsequently transshipped to a China-based buyer.
Why AI chips are strategically important
High-end GPUs are essential components in many AI computing systems. They can be used to train and operate large models and other high-performance computing applications.
The U.S. government has imposed export controls on certain advanced computing technologies because officials say the capabilities can have national-security and military applications.
Connection to China’s AI industry
China has rapidly expanded its artificial-intelligence sector and is investing heavily in domestic processors, data centers and AI models. At the same time, access to some of the world’s most advanced chips has become increasingly restricted.
That combination has created strong demand for computing capacity and increased the importance of legal supply chains for Chinese technology companies.
How the case fits the wider export-control campaign
The arrest follows other U.S. investigations into alleged attempts to move restricted AI hardware to China through intermediaries or third countries. The Justice Department and Commerce Department have increased enforcement around advanced semiconductor technology.
Financial allegations
The Justice Department says Earthmade received more than $176 million from two Malaysia-based shipment companies between January and October 2024. Prosecutors allege that the financial transactions were connected to the wider shipment scheme.
What U.S. agencies are investigating
The Department of Commerce’s Bureau of Industry and Security Office of Export Enforcement, the Defense Criminal Investigative Service and the FBI’s Counterintelligence and Espionage Division are investigating the case, according to the Justice Department.
Potential penalties
If convicted on all charges, Lui could face statutory maximum penalties of up to 20 years for the conspiracy count, up to 20 years for the money-laundering conspiracy count and up to 10 years for the smuggling count. Actual sentencing, if there is a conviction, would depend on the applicable federal sentencing rules and the facts of the case.
Important legal point
The allegations have not been proven in court. The Justice Department explicitly states that an indictment is an allegation and that defendants are presumed innocent unless proven guilty beyond a reasonable doubt.
Why the case matters for China-U.S. technology relations
The case illustrates how technology trade has become closely connected with national-security policy. Washington is seeking to restrict access to some advanced computing technologies, while Chinese technology companies continue to expand AI research and computing infrastructure.
What businesses should watch
Technology companies, cloud providers, server manufacturers and logistics firms will be watching the case for additional enforcement guidance. Companies involved in international semiconductor and server supply chains face increasing requirements to verify end users, destinations and export licenses.
What happens next
Lui was expected to appear in federal court in Los Angeles on Friday. Further court filings could provide additional details about the alleged shipments, financial transactions and other people or companies involved.
NewsNationOnline will continue coverage through its Technology section, International section and Business section. Readers can consult the U.S. Department of Justice and the Bureau of Industry and Security for official information about the case and export controls.
Source note: The allegations and shipment details in this article are based on the U.S. Department of Justice indictment and Reuters reporting. They are allegations and have not been established as facts through a criminal conviction.
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