US Alleges $300 Million AI Server Smuggling Scheme Used Singapore and Malaysia
A California technology company owner has been arrested over an alleged scheme to smuggle more than US$300 million worth of export controlled computer servers containing advanced US made GPUs to China, with Singapore and Malaysia allegedly used as transit points.
The US Department of Justice said Greg Lui, 38, also known as Yiu Kong Lui, was charged with conspiracy to violate US export controls, outbound smuggling and conspiracy to commit money laundering. Lui owns California based Earthmade Computer.
According to prosecutors, Lui and his alleged co conspirators used Earthmade to purchase high end computer servers containing export controlled GPUs between 2023 and 2024. The equipment was allegedly sent first to countries including Singapore and Malaysia before being re exported to buyers in China without the required US licences.
The case puts Southeast Asia back in focus as Washington steps up efforts to prevent advanced computing hardware from being diverted to China through third countries.
US authorities allege the group supplied false documentation to American manufacturers that misrepresented the intended destinations and end users of the equipment. Freight forwarding companies were then allegedly used to move the servers through intermediary countries.
One transaction cited by prosecutors involved 27 servers worth about US$7.6 million. The servers, which contained export controlled GPUs, were shipped from Los Angeles to Kuala Lumpur in January 2024. A co conspirator later told a Malaysian government official that the servers had been transshipped to a buyer in China, according to the indictment.
The Justice Department also said Earthmade received more than US$176 million from two Malaysia based shipping companies between January and October 2024 as part of the alleged scheme.
The arrest comes as the US continues to enforce restrictions intended to limit China's access to advanced chips and computing systems that can be used for artificial intelligence and high performance computing.
If convicted, Lui faces maximum prison terms of 20 years for the export control conspiracy, 20 years for the money laundering conspiracy and 10 years for smuggling. The charges are allegations and Lui is presumed innocent unless proven guilty.
Source: Reuters, US Department of Justice
