Three federal prosecutions filed in less than a year describe the same route for restricted American AI hardware: ship it to Southeast Asia, relabel the paperwork, and send it on to China. The charges are allegations, and the defendants are presumed innocent.
A California computer-parts dealer arrested on Oct. 1 is accused of running among the largest chip smuggling cases involving China brought by U.S. prosecutors. According to a Justice Department announcement, Greg Lui, 38, of San Gabriel, and his company, Earthmade Computer Inc., allegedly moved export-controlled servers worth more than $300 million through Malaysia and Singapore without the Commerce Department licenses the law requires. A federal grand jury in the Central District of California returned a three-count indictment on Sept. 29.
The case is not isolated. Public records show it is the third major prosecution since November 2025 alleging that restricted Nvidia-based hardware reached China through the same corner of Southeast Asia. A Florida indictment from last year and a New York indictment unsealed in March against employees of a publicly traded server maker describe similar methods. Together, the filings suggest that export rules written in 2022 are being defeated less by technical ingenuity than by falsified end-user paperwork and a transshipment hub with weak oversight.
The Justice Department materials reviewed do not allege wrongdoing by Nvidia, and Super Micro Computer says it is not a defendant in the New York case. Public records reviewed by TIJ show no conviction of Lui. The records reviewed for this report did not include a statement from Lui or Earthmade, and no defense counsel was identified in the public documents available to TIJ.
The Earthmade Indictment: $176 Million in Payments From Malaysia
The Justice Department announcement lays out the government’s theory. From 2023 to 2024, Lui and co-conspirators allegedly bought high-end servers containing U.S.-made GPUs and sent them to China without required licenses. The servers were first shipped to Malaysia and Singapore, where, according to prosecutors, no license was required for the U.S. export, and then reshipped to China. Prosecutors allege Lui knew the true end users were in China and gave U.S. manufacturers false documentation about the end users and destinations.
The department’s account includes several specific data points:
- Payments: Earthmade allegedly received more than $176 million from two Malaysia-based shipment companies between January and October 2024.
- Total value: Prosecutors allege the smuggled servers were worth more than $300 million.
- A January 2024 order: Lui allegedly emailed a conspirator that a Malaysian transshipment company wanted 70 servers with export-restricted GPUs, then placed a purchase order for 27 servers costing about $7.6 million with a U.S. manufacturer.
- The paper trail: The packing list for those servers allegedly identified them as export-controlled GPU servers that could not go to China without a license. In March 2024, a co-conspirator allegedly emailed a Malaysian government official that the 27 servers had been transshipped to a China-based buyer.
- Charges: conspiracy to violate the Export Control Reform Act (maximum 20 years), outbound smuggling (10 years), and conspiracy to commit money laundering (20 years).
The investigation was run by the Commerce Department’s Bureau of Industry and Security, the Defense Criminal Investigative Service and the FBI. The department’s own release states that “an indictment is merely an allegation” and that all defendants are presumed innocent.
A Pattern: Florida in 2025, New York in 2026
The Earthmade filing closely resembles two earlier cases. In November 2025, the Justice Department announced an indictment of four defendants in the Middle District of Florida. Prosecutors alleged a conspiracy running from September 2023 to November 2025 to export Nvidia GPUs to China through Malaysia and Thailand. According to the indictment, a Tampa company named Janford Realtor, LLC, which had no real estate dealings, served as a front for buying and exporting the chips.
That case involved smaller volumes: two completed exports totaling 400 Nvidia A100 GPUs between October 2024 and January 2025, plus two attempted exports of H100- and H200-equipped hardware that law enforcement disrupted. The indictment alleges more than $3.89 million in wire transfers from China funded the scheme. The Justice Department quoted Assistant Attorney General John Eisenberg describing “falsifying paperwork, creating fake contracts, and misleading U.S. authorities.”
The New York case is far larger on paper. According to a Form 8-K filed March 20, the U.S. Attorney’s Office for the Southern District of New York unsealed an indictment charging three people associated with Super Micro Computer: co-founder and board member Yih-Shyan “Wally” Liaw, a Taiwan-based sales manager, and a contractor. The company placed the two employees on leave, ended its relationship with the contractor, and named an acting chief compliance officer. Liaw resigned from the board effective March 20; the filing says the resignation was not due to a disagreement with the company.
In an accompanying press release, Super Micro said the alleged conduct violated its internal policies and compliance controls and that it was cooperating fully with the government. Press accounts of the indictment put the alleged diversion at about $2.5 billion, and CNBC reported the company’s shares fell about 33 percent after the charges became public. The $2.5 billion figure and the reported methods, including staged dummy servers to mislead compliance reviewers, come from secondary reporting of the indictment; TIJ has not independently reviewed the charging document, and the allegations remain unproven.
The Rule the Cases Test
The legal foundation for all three prosecutions is a Commerce rule published in the Federal Register on Oct. 13, 2022. The interim final rule (87 FR 62186) created export classifications 3A090 and 4A090 for advanced chips and the computers that contain them, and required a license to export them to or within China. Most applications are reviewed under a presumption of denial. The Bureau of Industry and Security projected the rule would generate roughly 1,600 additional license applications per year.
The structure of the rule explains why the alleged schemes cluster around third countries. A shipment to Kuala Lumpur or Singapore does not trigger the China-specific license requirement on its face. What matters is what the exporter knows, and what the paperwork says, about the ultimate destination. In each of the three cases, prosecutors allege the paperwork was false or the true end user was known to the defendants. That puts the burden on documentation, which is exactly what a determined intermediary can fabricate.
Malaysia Tightens Its Own Rules
Malaysia has since moved to close part of the gap. According to trade-press reporting on a notice from the Ministry of Investment, Trade and Industry, rules effective July 14, 2025 added high-performance U.S.-origin AI chips to the country’s Strategic Items List. Exporters, transshippers and those moving the chips in transit must now obtain a Strategic Trade Permit and give authorities at least 30 days’ notice. The ministry said violators would face “strict legal action” under the Strategic Trade Act 2010.
The timing matters. The Earthmade payments and shipments described in the indictment date to 2024, and the Florida exports to late 2024 and early 2025, before the Malaysian permit rule took effect. Public records do not yet show how many shipments since July 2025 have been stopped under the new regime, or whether the Malaysian government official referenced in the Earthmade indictment, who received a co-conspirator’s email, has been interviewed or has commented. Those questions remain open.
What the Pattern Suggests
Taken together, the three cases span volumes from a few hundred GPUs to servers valued in the hundreds of millions of dollars and, by press accounts, billions. They involve a small-business front company, a family-run parts dealer and, in the New York case, employees of a major listed manufacturer. The common thread in the charging documents described publicly is not a novel technology but an old one: misdescribed end users, intermediaries in a permissive jurisdiction, and payments flowing back through ordinary banking channels.
For investors and compliance officers, the filings raise a practical question about how much responsibility falls on upstream manufacturers whose servers pass through distributors. Super Micro’s 8-K says its controls were contravened; prosecutors will have to show how. For policymakers, the cases show enforcement is catching shipments, but usually after the hardware has left. The Earthmade indictment covers conduct from 2023 and 2024 and was unsealed in October 2026, a lag of roughly two years.
What remains unknown is considerable. None of the three cases has reached trial. The New York indictment’s full evidentiary record is not public in the materials TIJ reviewed, and the final destination and use of the servers in China have not been established in any court filing described here. Readers should watch for Lui’s arraignment and plea in the Central District of California, any superseding indictment naming the Malaysian shipping companies, and BIS enforcement actions against intermediaries. TIJ will update this report as court records become available.