Federal law enforcement agents moved swiftly on Wednesday morning outside an industrial park in City of Industry, California, arresting Earthmade Computer founder Greg Lui as he arrived at work in a white-wrapped Tesla Cybertruck. The dramatic arrest culminated a multi-agency federal investigation into an alleged $300 million Nvidia chip smuggling operation designed to funnel export-controlled computing hardware into China. Federal prosecutors in Los Angeles unsealed a three-count criminal indictment charging the 38-year-old executive with orchestrating an elaborate diversion network that bypassed United States national security trade controls [1].
Federal Raid Uncovers Nvidia Chip Smuggling Route
Investigators from the Federal Bureau of Investigation, the Department of Commerce Bureau of Industry and Security, and the Defense Criminal Investigative Service had tracked Lui from his 4,300-square-foot mansion in San Gabriel before arresting him at gunpoint. Lui, also known by the alias Yiu Kong Lui, surrendered silently before being transported to downtown Los Angeles for federal processing. A grand jury returned the 22-page indictment on September 29, 2026. The formal charges include conspiracy to violate the Export Control Reform Act, outbound smuggling, and conspiracy to commit money laundering [2].
If convicted on all counts, Lui faces up to 50 years in federal prison. Each conspiracy charge carries a statutory maximum of 20 years, while the smuggling offense adds up to 10 years behind bars. Prosecutors promptly petitioned the court to detain Lui without bail, citing substantial financial resources and a serious flight risk. ‘Protecting America’s national security means keeping our advanced Super Intelligence technology from being used to strengthen our adversaries’ military capabilities,’ stated First Assistant United States Attorney Bill Essayli, emphasizing that the Department of Justice will aggressively prosecute anyone risking national defenses for illicit profit [1].
Lui was detained without bail [5].
Freight Routes Masked Illegal AI Chip Smuggling
Court records reveal that Earthmade Computer served as a commercial intermediary between domestic hardware suppliers and overseas buyers between October 2023 and August 2024. Federal prosecutors allege the enterprise purchased high-end computer servers containing Nvidia A100 and H100 graphics processors by misrepresenting end users on official export compliance paperwork. Instead of disclosing that the computing gear was bound for buyers in mainland China, Lui and his co-conspirators informed American manufacturers that the hardware would go to authorized corporate clients in Malaysia and Singapore [3].
Because shipments to Malaysia and Singapore did not require specialized export authorizations under current Department of Commerce regulations, the conspirators utilized international freight forwarding firms to move the machinery abroad without triggering immediate red flags. Once the containers reached regional distribution hubs, local logistics operators coordinated the secondary transport directly into Chinese territory to support high-performance computing centers. The clandestine pipeline enabled Chinese entities to bypass strict trade limits instituted to curb foreign military development. While commercial software developers explore tools like developer vibe coding to optimize RTX 50 GPUs, export restrictions strictly govern top-tier enterprise accelerators. Assistant Attorney General John A. Eisenberg disclosed that the smuggling ring even staged dummy servers to deceive regulatory inspectors during routine audits [2].
Federal authorities emphasize that advanced graphic processing units provide computational infrastructure for sophisticated artificial intelligence models and defense applications. How did a California colocation business pivot into multimillion-dollar international hardware diversion? Smugglers targeted high-density systems capable of distributed parallel processing. Investigators found that Lui documented the export prohibitions in private correspondence while simultaneously executing orders for overseas partners [1].
Court Filings Detail Phony Paperwork and Decoys
The evidentiary trail assembled by investigators highlights specific commercial transactions executed during early 2024. In January 2024, Lui emailed a confederate regarding an order from a Malaysian transshipment entity seeking 70 servers equipped with export-controlled Nvidia graphics units. Although an attached compliance document explicitly acknowledged American prohibitions against transferring such equipment to China, Lui proceeded with the procurement. Later that month, Lui ordered 27 advanced servers. The purchase cost $7.614 million [2].
The consignment of 27 servers left Los Angeles bound for Kuala Lumpur with packing paperwork stating that the hardware could not enter China without valid federal authorization. Yet just two months later, in March 2024, an alleged partner emailed a Malaysian government official confirming that all 27 systems had successfully crossed into Chinese hands. Another procurement order involved 100 servers housing Nvidia H100 processors valued at more than $22 million. In that deal, Lui submitted falsified documentation naming a fabricated corporate buyer with an executive identified as ‘Jackie Lui’ [3].
Decoys misled regulatory inspectors. Federal filings show that decoys and forged end-user certificates repeatedly masked illicit transactions from compliance officers. Internal shipping labels consistently concealed the final destination from American customs agents [2].
Financial Records Trace Millions Through Shell Channels
Financial records obtained by subpoena reveal the massive monetary scale supporting the illicit distribution enterprise. Between January and October 2024, Earthmade Computer received over $176 million from two Malaysian freight and logistics companies to facilitate server acquisition. Federal prosecutors traced the transfer of these funds through corporate accounts established at Bank of America and JPMorgan Chase in Los Angeles. The capital influx funded personal luxuries. The substantial capital influx allowed Lui to fund personal luxuries while financing continuous hardware acquisitions [1].
Earthmade Computer was founded in 2021. Before founding the company, Lui managed database operations at Amplitude Tech Hosting Service in Denver following an earlier career running Duo-Pot, a Sichuan restaurant in Arcadia known for spicy frog dishes. The surging profits from semiconductor brokering transformed his lifestyle. Federal agents searching his nine-bedroom, seven-bathroom residence on Walnut Grove Avenue documented extensive renovations, including newly installed windows, exterior stucco, and an expanded driveway. Law enforcement personnel seized extensive digital evidence and documents during Thursday’s residential search [1].
The money laundering conspiracy charge alleges that Lui funneled commercial payments through domestic accounts to disguise the unlawful origin of proceeds generated by violating export curbs. Bank records demonstrated routine transfers directly linked to freight forwarding invoices. Lui entered no plea on Friday. Court dockets in Los Angeles did not list defense counsel [4].
Federal Crackdown Expands Across Global Technology Pipelines
The prosecution of Earthmade Computer arrives amid heightened scrutiny surrounding semiconductor supply chains and global distribution vulnerabilities. An Nvidia spokesperson addressed the arrest directly, stating: ‘This case shows yet again that smuggling is a losing proposition — legally, economically and technically. Our work with law enforcement has led to prosecutions, and we will continue to engage with law enforcement.’ Regulators continue examining whether semiconductor manufacturers maintain adequate compliance oversight to detect deceptive procurement tactics [4].
National security leaders view the illicit flow of accelerated computing hardware as a critical strategic challenge. ‘Controlling the export of advanced SI technology is critical to safeguarding our national security and defending the homeland, and the FBI will keep fighting for America’s businesses and economic security,’ stated Roman Rozhavsky, assistant director of the FBI’s counterintelligence and espionage division. Export controls remain a focal point of American technological competition with China across multiple presidential administrations [4].
The case against Lui reflects an aggressive enforcement surge targeting artificial intelligence hardware diversion. In March, federal authorities indicted a co-founder of Super Micro Computer for allegedly redirecting billions of dollars in Nvidia hardware to China, a charge to which the defendant pleaded not guilty. That prosecution followed the conviction of former Google engineer Linwei Ding for stealing proprietary artificial intelligence trade secrets. Federal agencies maintain active surveillance across international freight channels as grand jury investigations continue [5].
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