US charges California tech executive in alleged $300 million AI-server smuggling scheme

Federal authorities arrested California tech executive Greg Lui and unsealed a three-count indictment alleging that he conspired to send export-controlled computer servers to China without the required U.S. Commerce Department licenses.

Prosecutors say Lui and co-conspirators used his City of Industry company, Earthmade Computer Inc., to buy and export more than $300 million in high-end servers containing U.S.-made graphics processing units during 2023 and 2024. The indictment is an allegation, and Lui is presumed innocent unless proven guilty beyond a reasonable doubt.

In the Justice Department’s account of the indictment, the group submitted documents naming permitted end users and destinations, routed the servers through freight forwarders in Malaysia and Singapore, and then had them reshipped to China. Prosecutors also allege that Earthmade received more than $176 million from two Malaysia-based shipping companies between January and October 2024.

The department described one transaction involving a Malaysian transshipment company that sought 70 servers containing restricted GPUs. Lui allegedly ordered 27 servers for about $7.614 million and shipped them from Los Angeles to Kuala Lumpur. A co-conspirator later allegedly told a Malaysian official that the 27 servers had been forwarded to a buyer in China. The accessible official releases do not name the GPU maker or model.

The three charges are conspiracy to violate the Export Control Reform Act and Export Administration Regulations, outbound smuggling, and conspiracy to commit money laundering. DOJ said the statutory maximum penalties are 20 years for each conspiracy count and 10 years for smuggling. Those maximums do not predict any eventual sentence.

The case concerns complete computer systems, not just individual chips. A 2023 Commerce Department export-control rule covers specified advanced-computing integrated circuits and computer commodities containing them. That puts servers carrying covered GPUs within the controlled AI-compute supply chain.

The criminal case is separate from diplomatic work on AI risk. For broader policy context, see U.S.-China AI incident-notification talks.

The Justice Department’s public releases disagree on whether Lui’s initial appearance was expected on October 1 or October 2. The underlying indictment and court docket were not available in the reviewed sources.