US executive charged in massive $300M illicit scheme smuggling GPU servers to China

A California technology executive faces federal charges over an alleged scheme to move more than $300 million of restricted computing hardware to China. Greg Lui, 38, allegedly used overseas intermediaries to bypass U.S. export controls on high-end servers. Prosecutors say the machines contained American-made graphics processing units (GPUs) designed for advanced computing applications. Lui owns Earthmade Computer Inc., a technology company based in City of Industry, California. A federal grand jury indicted him on Sept. 29 on three counts. Prosecutors accuse Lui of concealing the servers’ final destination through third-country shipments and false paperwork. The alleged routing involved Malaysia and Singapore before the hardware reached China. Servers moved through Malaysia The alleged scheme ran from 2023 through 2024, according to the indictment. Lui and his associates allegedly bought restricted servers from U.S. manufacturers without obtaining required export licenses. They allegedly listed acceptable destinations and end users on documentation submitted with those purchases. The servers then traveled to countries where the original export did not require the same license. From there, associates allegedly arranged onward shipments into China. One transaction illustrates how the operation allegedly worked. In January 2024, Lui discussed a Malaysian company’s interest in purchasing 70 restricted servers. He later ordered 27 units from a U.S. manufacturer. The order cost approximately $7.6 million. Earthmade then arranged transportation from Los Angeles to Kuala Lumpur. Shipping records identified the machines as servers containing export-controlled GPUs. The documents also stated that China required an export license for the hardware. In March, a co-conspirator allegedly told a Malaysian official that the 27 servers had reached a Chinese buyer. False documents hid destinations Prosecutors also allege that Lui supplied manufacturers with misleading information about the equipment’s intended destination. The indictment describes documentation that portrayed foreign buyers as legitimate end users. Authorities say the paperwork concealed the servers’ eventual movement into China. The alleged financial activity also involved substantial sums. Earthmade received more than $176 million from two Malaysia-based shipping companies. U.S. authorities say the restricted GPUs could contribute significantly to another nation’s military capabilities. The government has imposed export controls on advanced computing hardware partly for that reason. Officials from the Justice Department, Commerce Department and FBI described the case as a national security enforcement action. “Protecting America’s national security means keeping our advanced Super Intelligence technology” from strengthening adversaries, First Assistant U.S. Attorney Bill Essayli said. Assistant Attorney General John A. Eisenberg said investigators found alleged false documents and staged servers intended to confuse inspections. The FBI said the investigation also examined technology sales allegedly connected to the Chinese government. Lui faces charges for export-control conspiracy, outbound smuggling and money-laundering conspiracy. Each charge carries a different statutory maximum penalty. A conviction could bring up to 20 years for the export-control conspiracy. The money-laundering conspiracy also carries a maximum of 20 years. The smuggling charge carries a maximum sentence of 10 years in federal prison.The Bureau of Industry and Security, Defense Criminal Investigative Service, and FBI are investigating the case. Lui remains presumed innocent unless prosecutors prove the charges beyond a reasonable doubt in court.Get the latest in engineering, tech, space & science - delivered daily to your inbox.Aamir is a seasoned tech journalist with experience at Exhibit Magazine, Republic World, and PR Newswire. With a deep love for all things tech and science, he has spent years decoding the latest innovations and exploring how they shape industries, lifestyles, and the future of humanity.