LOS ANGELES, CA – October 2, 2026 (STL.News) California – Federal authorities have arrested a California technology company owner accused of participating in an international scheme to illegally send more than $300 million in export-controlled high-end computer servers to China, allegedly using false documents, third-country shipping routes and staged dummy servers to conceal the equipment’s true destination.
Greg Lui, 38, also known as Yiu Kong Lui, of San Gabriel, California, was arrested Oct. 1 following a three-count federal indictment returned Sept. 29, according to the U.S. Department of Justice.
Lui owns Earthmade Computer Inc., a closely held corporation based in City of Industry, California.
Federal prosecutors allege Lui and unidentified co-conspirators used Earthmade in 2023 and 2024 to purchase high-end computer servers containing U.S.-manufactured graphics processing units, or GPUs, subject to federal export controls.
According to the indictment, the conspirators falsely represented that the equipment was destined for permissible end users outside China. The servers were allegedly shipped to countries including Malaysia and Singapore, where the government says no such export license was required, and then illegally re-exported to China.
The Justice Department says the alleged operation involved more than $300 million in computer servers.
Lui is charged with conspiracy to violate the Export Control Reform Act and Export Administration Regulations, outbound smuggling, and conspiracy to commit money laundering.
The charges are allegations. Lui is presumed innocent unless and until proven guilty beyond a reasonable doubt.
Prosecutors allege China was the true destination
At the center of the case is an increasingly important national-security issue: U.S. efforts to prevent certain advanced computing technology from reaching China.
The federal government restricts exports to China of certain advanced GPUs and computer systems containing them.
According to prosecutors, Lui knew the servers Earthmade was purchasing contained GPUs subject to those restrictions.
Rather than obtaining the licenses required to export the equipment to China, prosecutors allege Lui and his co-conspirators concealed the actual destination.
The indictment alleges they provided U.S.-based manufacturers with documentation indicating the servers were going to permissible end users and destinations outside China.
Prosecutors say those representations were false.
After obtaining the servers, Lui and others allegedly used freight-forwarding companies to send the equipment to countries including Malaysia and Singapore.
The equipment was then allegedly re-exported to China.
DOJ says the indictment describes false documents, staged dummy servers, and complicated transshipment arrangements allegedly designed to conceal the ultimate destination of the restricted technology.
$176 million allegedly flowed to Earthmade
The financial trail described by federal authorities indicates the scale of the alleged operation.
Between January and October 2024, Earthmade received more than $176 million from two Malaysia-based shipping companies, according to the Justice Department.
Prosecutors allege the payments were associated with the broader scheme involving export-controlled servers.
The indictment also describes individual transactions that investigators say illustrate how the alleged operation worked.
One began in January 2024.
According to the DOJ, Lui emailed a co-conspirator indicating that a Malaysian transshipment company wanted to purchase 70 servers containing export-restricted GPUs.
The email included an export-compliance form indicating that the Malaysian company understood U.S. restrictions prohibited the sale, export, or transshipment of the servers to restricted destinations.
Later that month, prosecutors allege Lui submitted a purchase order to a U.S.-based manufacturer for 27 of the servers.
The price was approximately $7.614 million.
Lui and a co-conspirator then allegedly shipped the servers from Los Angeles to Kuala Lumpur, Malaysia.
According to the DOJ, the packing list accompanying the shipment identified the equipment as 27 servers containing export-controlled GPUs that could not be exported to China without a license.
Investigators subsequently obtained evidence indicating that Malaysia was not the equipment’s ultimate destination, prosecutors say.
In March 2024, according to the DOJ, a co-conspirator emailed a Malaysian government official acknowledging that the 27 servers had been transshipped to a China-based buyer.
That alleged communication provides one of the clearest examples publicly disclosed by federal authorities of how the government says the operation worked.
Advanced GPUs at center of case
The Justice Department describes the equipment involved as high-end computer servers containing U.S.-manufactured GPUs.
DOJ does not identify the manufacturer or particular GPU models in its public announcement.
GPUs have become critical components of modern artificial-intelligence computing because they can perform many calculations simultaneously.
That ability makes high-performance GPUs particularly valuable for training and operating sophisticated AI systems.
Advanced computing technology can also have military, intelligence, and other national-security applications.
The federal government therefore restricts the export of certain advanced computing products to China and other destinations.
According to DOJ, the GPUs involved in the Lui case were subject to export restrictions because of their advanced computing capabilities.
U.S. restricts some advanced technology to China
The United States imposed major restrictions on China’s access to certain advanced computing chips and semiconductor-manufacturing technology beginning in 2022 and has subsequently revised and expanded those controls.
The restrictions are intended to prevent specified advanced technologies from contributing to military modernization and other capabilities that U.S. officials consider national-security concerns.
The criminal case against Lui concerns alleged violations of those existing export restrictions.
Prosecutors allege Lui and his co-conspirators knew they could not legally export the equipment to China without a license.
The government says they nevertheless obtained the servers from U.S. manufacturers by representing that the equipment would go to other destinations.
According to DOJ, the servers were shipped to countries including Malaysia and Singapore, where no such license was required, before allegedly being illegally re-exported to China.
That alleged use of intermediary countries is central to the government’s case.
Dummy servers allegedly staged for inspectors
Federal prosecutors say the alleged scheme involved more than inaccurate shipping paperwork.
Assistant Attorney General for National Security John A. Eisenberg said the indictment describes the alleged use of false documents, staged dummy servers and complicated transshipment arrangements to evade U.S. export laws.
According to DOJ, the dummy servers were allegedly staged to mislead inspectors.
That allegation matters because it suggests investigators believe participants took deliberate steps to conceal what was happening with the restricted equipment.
It could also become relevant to prosecutors’ effort to establish intent if the case proceeds to trial.
The allegation has not been proven in court.
FBI alleges technology went to Chinese government
The FBI has made a particularly serious allegation concerning the ultimate recipient of some of the technology.
Roman Rozhavsky, assistant director of the FBI’s Counterintelligence and Espionage Division, said the bureau’s investigation found that Lui allegedly sold hundreds of millions of dollars worth of advanced American computing technology to the Chinese government.
That is an allegation made by federal investigators and has not been established at trial.
DOJ’s account of the specific 27-server transaction describes the ultimate recipient more generally as a China-based buyer.
The distinction is important.
The government’s broader allegation concerning the Chinese government should not be treated as an established fact unless supported by evidence ultimately accepted through the judicial process.
Federal authorities nevertheless say the case demonstrates why the government considers the alleged export activity a national-security matter.
Counterintelligence investigators involved
The agencies investigating the case underscore its national-security dimension.
The investigation involves the U.S. Department of Commerce’s Bureau of Industry and Security Office of Export Enforcement, the Defense Criminal Investigative Service and the FBI.
The FBI’s Counterintelligence and Espionage Division is involved.
The U.S. Attorney’s Office for the Central District of California, with DOJ’s National Security Division, including its Counterintelligence and Export Control Section, is handling the prosecution.
Federal prosecutors are also pursuing civil and criminal forfeiture proceedings involving property seized during the investigation.
The combination of Commerce export-enforcement agents, Defense Department investigators and FBI counterintelligence personnel distinguishes the case from an ordinary commercial dispute or traditional financial-fraud prosecution.
Third-country shipments pose enforcement challenge
The allegations against Lui highlight a central challenge facing U.S. export enforcement.
Preventing a restricted product from being shipped directly from the United States to China is only part of the problem.
Technology moves through complicated international supply chains involving distributors, resellers, freight forwarders, and customers operating in numerous countries.
That creates opportunities for diversion.
A transaction may appear to involve a legitimate customer in a permissible destination even though the equipment is ultimately intended for another country.
Federal export rules therefore place significant importance on identifying the actual end user and ultimate destination of controlled technology.
Prosecutors allege the Earthmade operation exploited precisely that vulnerability.
According to the DOJ, the conspirators falsely represented that servers were destined for permissible end users outside China, even though they knew the true end users were in China.
The January 2024 transaction prosecutors describe provides a detailed example.
Earthmade allegedly ordered 27 export-controlled servers worth approximately $7.614 million.
The equipment was shipped from Los Angeles to Kuala Lumpur.
Then, according to prosecutors, a co-conspirator acknowledged two months later that those same servers had been transshipped to a buyer in China.
If proven, that sequence could provide prosecutors with evidence that the Malaysian destination was part of a transshipment arrangement rather than the equipment’s true final destination.
Artificial intelligence raises stakes of chip controls
The prosecution comes as artificial intelligence dramatically increases the economic and strategic importance of advanced computing hardware.
Modern AI systems require enormous amounts of computing power.
Data centers can combine large numbers of high-performance GPUs to train increasingly sophisticated artificial-intelligence models and run them at scale.
That computing capacity has applications ranging from scientific research and commercial software to intelligence analysis and military technology.
As a result, access to advanced computing hardware has become part of the broader technological competition between the United States and China.
U.S. officials argue that restrictions are necessary to prevent certain advanced technologies from supporting Chinese military modernization and other activities that could threaten U.S. national security.
China has opposed U.S. semiconductor and technology restrictions and has characterized them as efforts to impede its technological and economic development.
Those broader policy disagreements are separate from the criminal allegations against Lui.
The government is not prosecuting Lui for conducting ordinary commerce with China.
It alleges that he knowingly violated U.S. export laws by concealing the actual destination of controlled technology and arranging for the equipment to reach China without required licenses.
Prosecutors must prove those allegations in federal court.
Lui faces three federal charges
The indictment contains three counts.
Lui is charged with conspiracy to violate the Export Control Reform Act and Export Administration Regulations, which carries a statutory maximum sentence of 20 years in federal prison.
The outbound-smuggling charge carries a statutory maximum of 10 years.
The conspiracy to commit money laundering charge carries a statutory maximum of 20 years.
Those statutory maximums should not be interpreted as a prediction of Lui’s eventual sentence.
If he is convicted, a federal judge would determine any sentence based on the offenses of conviction, federal sentencing law, and other applicable factors.
DOJ said Lui was expected to make his initial appearance and be arraigned Friday afternoon in U.S. District Court in downtown Los Angeles.
A verified federal announcement establishing the outcome of that proceeding was not available at the time of publication.
$300 million case could test export enforcement
The scale alleged by federal prosecutors makes the Lui case notable.
The government alleges the operation involved more than $300 million in export-controlled computer servers.
Earthmade allegedly received more than $176 million from two Malaysia-based shipping companies between January and October 2024.
And investigators have publicly described a specific $7.614 million shipment involving 27 servers that allegedly traveled from Los Angeles to Malaysia before being transshipped to a China-based buyer.
But the case could have significance beyond the conduct of a single California company owner.
The effectiveness of U.S. restrictions on advanced computing technology depends partly on whether manufacturers and federal authorities can identify third-country intermediaries and determine where controlled equipment ultimately goes.
If restricted technology can be purchased through ostensibly permissible customers and then redirected to China, those controls lose effectiveness.
Federal prosecutors allege Lui and his co-conspirators attempted to exploit exactly that weakness.
The indictment now places those allegations before the federal courts.
Whether the government can prove them remains to be determined.
Until then, Lui is presumed innocent.
The case nevertheless offers a detailed look at the methods federal investigators allege can circumvent U.S. controls on advanced computing technology — and at the government’s increasing effort to prevent some of America’s most powerful computing systems from reaching restricted destinations.
