California tech company owner arrested over alleged $300 million China chip-smuggling scheme

Greg Lui, 38, was arrested after being charged in a three-count federal indictment.

A California technology company owner has been arrested on charges of allegedly smuggling more than USD 300 million in export-controlled computer servers containing US-made graphics processing units (GPUs) to China, according to federal prosecutors.The US Department of Justice said Greg Lui, 38, also known as Yiu Kong Lui, was arrested after being charged in a three-count federal indictment. Lui, who owns City of Industry-based Earthmade Computer Inc., allegedly used third countries, false paperwork and freight-forwarding arrangements to send restricted technology to China without the required US export licences.According to the indictment, the alleged scheme operated between 2023 and 2024. Lui and his co-conspirators allegedly bought export-controlled servers through Earthmade and routed them to countries including Malaysia and Singapore, where the required US export licence was not needed, before arranging for the equipment to be re-exported to China.Prosecutors allege the servers contained high-end GPUs used for Super Intelligence (SI) computing. Lui allegedly knew that the actual end users were in China while providing US manufacturers with documents showing permitted destinations and end users.The indictment alleges that Lui and his associates used freight-forwarding companies to move the servers from the US to third countries before they were sent on to China. From January to October 2024, Earthmade allegedly received more than $176 million from two Malaysia-based shipment companies.In one instance cited by prosecutors, Lui placed an order in January 2024 for 27 servers worth about $7.6 million. The servers were shipped from Los Angeles to Kuala Lumpur, Malaysia. A subsequent email to a Malaysian government official allegedly indicated that the 27 servers had been transshipped to a China-based buyer.Lui faces charges of conspiracy to violate the Export Control Reform Act and Export Administration Regulations, outbound smuggling and conspiracy to commit money laundering.If convicted, he could face a maximum sentence of 20 years on the export-control conspiracy charge, 20 years on the money-laundering conspiracy charge and 10 years on the smuggling charge.The FBI, the Defence Criminal Investigative Service and the Commerce Department’s Bureau of Industry and Security Office of Export Enforcement are investigating the case.The DOJ said the indictment contains allegations only, and Lui is presumed innocent unless and until proven guilty beyond a reasonable doubt in court.