A San Gabriel man was arrested on federal charges alleging he smuggled more than $300 million worth of export-controlled computer servers to China, with prosecutors saying the machines were packed with U.S.-manufactured graphics processing units commonly used for super intelligence applications. The servers never should have left American soil, let alone ended up in Chinese hands, according to the charges now laid out in a three-count federal indictment.
Federal prosecutors identified the arrested company owner as 38-year-old Greg Lui, also known as Yiu Kong Lui, of San Gabriel, California, the owner of City of Industry-based Earthmade Computer Inc., an authorized distributor of Super Micro Computer solutions specializing in high-performance Nvidia GPU infrastructure, according to the United States Department of Justice. Earthmade Computer, based in City of Industry, was at the center of the alleged scheme in the San Gabriel Valley.
A federal grand jury indictment returned on September 29 alleges Earthmade Computer received more than $176 million between January and October 2024 from two Malaysia-based freight forwarding companies as part of the scheme to re-export restricted servers to China, per the Justice Department. Prosecutors allege the servers were routed through Singapore and Malaysia, where export licenses were not required, before being re-exported to Chinese buyers.
Fake Paperwork and Dummy Servers
According to Department of Justice court filings unsealed Thursday, the illicit export operation involved submitting false end-user paperwork to U.S. hardware manufacturers and staging “dummy servers” to deceive federal inspectors. The indictment alleges the paperwork misrepresented the servers' end users and destinations.
If convicted on all charges in the three-count indictment, Lui faces statutory maximum sentences of up to 20 years in federal prison for conspiracy to violate export controls, 20 years for conspiracy to commit money laundering, and 10 years for outbound smuggling, the department's filings state. The Gibson Dunn material describes willfulness under Bryan as acting with knowledge that the conduct is illegal; it also states that criminal violations carry maximum statutory fines of up to $1 million per violation alongside criminal asset forfeiture.
A Multi-Agency National Security Case
The federal prosecution in Los Angeles is being led by First Assistant U.S. Attorney Bill Essayli and National Security Division prosecutors, supported by a joint investigative task force comprising the FBI, Commerce's Bureau of Industry and Security, and the Defense Criminal Investigative Service, the Justice Department noted. Federal officials have emphasized that safeguarding American super intelligence technology from foreign military adaptation is a national defense priority, per the same filings.
The arrest arrives amid tightening federal scrutiny of how advanced U.S. computing hardware is sold and resold. The Commerce Department's Bureau of Industry and Security issued guidance in May 2026 clarifying that export licensing requirements for advanced computing items apply to foreign subsidiaries of Chinese firms even when immediate orders are routed through third countries, according to the AI Governance Institute.
Part of a Broader Crackdown
The Earthmade Computer case is not an isolated one. In March 2026, federal prosecutors in Manhattan charged Super Micro Computer co-founder Yih-Shyan “Wally” Liaw and two others in an alleged scheme to illegally divert over $2.5 billion in Nvidia-powered AI servers assembled in San Jose to Chinese customers through Southeast Asian companies, as reported by SFGATE.
Internationally, Taiwanese prosecutors charged nine individuals in August 2026, including employees from Nvidia and Super Micro, over the illegal shipment of 74 high-end Nvidia Blackwell B300 AI servers to mainland China. Of the 74 servers that reached China, 50 went through Indonesia, 16 went directly to China, and eight went through Japan and then Hong Kong, according to The Guardian. Washington has progressively tightened restrictions on advanced Nvidia AI hardware since 2022, a timeline that has done little to stem the flow of smuggled chips.
A September 2026 investigative report by C4ADS and analysis from Epoch AI found that roughly one-third or more of China's artificial intelligence computing power consists of smuggled U.S. GPUs imported via drop-shipping, shell companies, and Southeast Asian transshipment hubs, per Tom's Hardware. That figure underscores why prosecutors are treating cases like Lui's as part of a systemic enforcement priority rather than an isolated violation.
Federal prosecutors have not detailed whether additional co-conspirators or the Malaysia-based freight forwarders named in the indictment will face extradition or further charges.
