FBI arrests California tech CEO for smuggling $300M in AI chips to China | Latest Tech News
Federal brokers on Wednesday arrested a California tech CEO who’s accused of smuggling more than $300 million in restricted AI chips into China.
Greg Lui, 38, aka “Yiu Kong Lui,” of San Gabriel, faces a barrage of federal costs for allegedly promoting Beijing a mountain of American-made AI graphics processors in violation of US legal guidelines, probably threatening national security.
The California Post watched as the FBI and Department of Commerce brokers arrested the high-flying tech boss in a stealth raid at the City of Industry headquarters of Earthmade Computers, a company Lui based and runs, and which he allegedly used to conduct the profitable yet unlawful scheme.
FBI brokers arrest California tech CEO Greg Lui for allegedly smuggling more than $300M in restricted AI chips to China. William Laing for the CA Post
Agents tracked Lui as he drove a Tesla Cybertruck with a white wrap from his gigantic San Gabriel mansion to the Earthmade’s shiny places of work in a tidy industrial park, handcuffing him at gunpoint soon after he arrived at work. Lui didn’t converse as he was positioned in a vehicle to be taken in for processing.
AI is now used in almost every side of trendy warfare, and investigators said the superior tech allegedly smuggled by Lui might’ve simply been put to use by the Chinese navy.
“Protecting America’s national security means keeping our advanced Super Intelligence technology from being used to strengthen our adversaries’ military capabilities,” said First Assistant United States Attorney Bill Essayli.
“This defendant allegedly used false paperwork and shipments through third countries to smuggle more than $300 million in export-controlled computer servers to China,” Essayli added. We will aggressively prosecute those who put our national security at risk for revenue.”
Federal prosecutors say Lui and his co-conspirators used Earthmade to buy and ship delicate AI tech into China from 2023 to 2024, without the required licenses issued by DOC that are meant to promote US international coverage and defend national security.
Lui faces federal costs for allegedly promoting Beijing US-made AI graphics processors in violation of US legal guidelines
Instead, they shipped these objects to international locations such as Malaysia and Singapore, where no licenses are required, and then illegally re-exported them to China.
The objects in query had been high-end pc servers, containing processors made by Nvidia Corp, a Santa Clara tech company specializing in AI. According to federal laws, such tech might make vital contributions to Chinese armed forces.
As half of the alleged scheme, prosecutors say, Lui and his conspirators used pretend paperwork to show the doubtless harmful AI tech could be going to locations that didn’t require an export license in orders they positioned with suppliers such as Nvidia.
After making these orders, Lui employed freight forwarding firms to ship the processors to Malaysia and Singapore. Once the servers arrived in these areas, Lui labored with his conspirators to reship the objects to China.
From January 2024 to October 2024, Earthmade obtained more than $176 million from two Malaysia-based cargo firms as half of the scheme, according to court papers.
Prosecutors say Lui executed the rip-off realizing what he did was unlawful, and they’ve the evidence to show it.
For instance, prosecutors say, Lui emailed a conspirator in January 2024 saying a Malaysian transshipment company needed to buy 70 pc servers with the managed AI tech. In the e-mail, he famous the legal guidelines against the sale of such tech, according to court papers.
Later that month Lui bought 27 of the servers for roughly $7.6 million and despatched the servers from LA to Kuala Lumpur, Malaysia. Two months later, one of Lui’s conspirators told a Malaysian official in an e-mail that the servers had, in fact, been transshipped to China.
FBI brokers swooped in to arrested the California tech CEO on Thursday.
Prosecutors say Lui used a LA-based JP Morgan Chase account and Bank of America account to ship and obtain money to orchestrate the scheme.
Lui is charged with one rely of conspiracy to violate the Export Control Reform Act, one rely of smuggling and one rely of conspiracy to commit money laundering. If convicted he faces up to 50 years in prison.
Before his arrest Lui lived a luxurious lifestyle, just lately finishing an in depth renovation of the 4,300-square foot mansion on Walnut Grove Avenue that he used to home quite a few members of his prolonged household.
Federal brokers had been seen conducting a search of the huge unfold Thursday, recording video and carrying evidence from the nine-bedroom, seven-bathroom home that has two tales and just acquired new stucco and home windows, a recent driveway and other upgrades.
According to his LinkedIn web page, Lui’s profession in tech started at a Denver firm specializing in database colocation.
The US DOC, the Defense Criminal Investigative Service and the FBI are investigating the case.
According to his LinkedIn web page, Lui has an eight-year profession in tech that started with a stint at Amplitude Tech Hosting Service, a Denver-based firm specializing in database colocation.
In 2021 he based Earthmade Computer, which also handles database colocation, in addition to pc processor procurement and export, according to LinkedIn.
Before his tech run, Lui was a restauranter who specialised in ultra-spicy Sichuan Chinese food. In 2012 he co-founded of Duo-Pot in Arcadia, a Chinese scorching pot and dry pot joint that offered spicy frog dishes before it closed in 2021, according to LinkedIn.
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