California tech CEO arrested for allegedly smuggling $300 million in restricted AI servers to China
Federal authorities in Los Angeles have arrested Greg Yiu Kong Lui, owner and CEO of San Gabriel Valley-based Earthmade Computer Inc., for his alleged role in a scheme to illegally export more than $300 million worth of restricted computer servers and artificial intelligence hardware to China.
The unsealed three-count federal indictment charges Lui with conspiracy, money laundering, and smuggling export-controlled technology in violation of the Export Control Reform Act (ECRA) and broader U.S. national security regulations.
Transshipment Routes via Southeast Asian Hubs
According to the Department of Justice, Lui operated his enterprise between 2023 and 2024 to procure high-performance server clusters containing advanced Nvidia graphics processing units (GPUs). Federal prosecutors state that Lui systematically bypassed U.S. Department of Commerce licensing requirements by routing shipments through intermediary logistics hubs in Malaysia and Singapore before forwarding the hardware to end-users in mainland China.
Key operational details outlined in court documents include:
Falsified Shipping Documentation: Lui allegedly submitted fraudulent export declarations to federal agencies, mislabeling the destination, end-user identity, and technical specifications of the server hardware.
Complex Financial Routing: The defendant executed multi-layered wire transfers totaling hundreds of millions of dollars across offshore shell accounts to obscure foreign funding sources linked to Chinese entities.
Targeted AI Infrastructure: The smuggled systems contained enterprise-grade AI accelerators designed for training large language models and processing high-density autonomous computing workloads.
Multi-Agency Federal Investigation and National Security Implications
The arrest follows a joint investigation by the FBI, the Department of Commerce’s Bureau of Industry and Security (BIS) Office of Export Enforcement, and the Defense Criminal Investigative Service (DCIS).
Federal officials said illicit hardware diversions directly undercut U.S. export controls meant to prevent foreign adversaries from using advanced American AI architecture for military modernization and intelligence applications. First Assistant U.S. Attorney Bill Essayli emphasized that federal law enforcement will continue to aggressively prosecute individuals who trade critical technology access for commercial profit.
Statutory Penalties and Escalating Enforcement
Lui made his initial court appearance in the U.S. District Court for the Central District of California on October 1. If convicted on all charges, he faces a statutory maximum penalty of up to 50 years in federal prison, comprising 20 years for money laundering, 20 years for conspiracy, and 10 years for illegal smuggling. The indictment is one of the largest single-defendant enforcement actions involving export-controlled AI hardware to date.
