A federal grand jury has charged a California businessman over Nvidia chip smuggling, alleging more than $300 million in export-controlled servers reached China. Greg Lui, 38, of San Gabriel, was indicted on 29 September 2026 and arrested on 1 October. The indictment says his company took in over $176 million from Malaysian firms in ten months.
What the Indictment Alleges
Prosecutors allege a three-year routing operation, not a one-off shipment. According to the Justice Department, Lui — also known as Yiu Kong Lui — owned Earthmade Computer Inc., a company based in City of Industry, California, and used it between 2023 and 2024 to buy high-end servers containing graphics processing units that United States export rules bar from China without a licence.
The alleged method was documentary. The indictment says Lui and unnamed co-conspirators gave American manufacturers false information about who the end user would be and where the equipment was going, obtaining servers that would not have been sold for a Chinese destination.
Courthouse News reported that the hardware at issue included the Nvidia H100, the data-centre accelerator widely used for training large artificial intelligence models. The Justice Department’s own announcement refers to servers containing GPUs without naming a model.
How the Alleged Route Worked
The licence requirement attaches to the destination, which is what the alleged route was designed to exploit.
- Buy in the United States: order export-controlled servers from US manufacturers, naming a permitted country and end user on the paperwork.
- Ship to a third country: send the hardware to Malaysia or Singapore, where that same sale did not require the licence a direct shipment to China would have needed.
- Re-export onward: arrange for associates in those countries to forward the servers into China, without the US Commerce Department licence that step required.
This is the pattern export-control investigators call transshipment, and it is why the Commerce Department’s rules follow the equipment rather than just the first sale. A shipment that is lawful on departure becomes a violation when it is re-exported to a restricted destination without authorisation.
The 27-Server Shipment at the Centre of the Case
One consignment is set out in detail in the charging documents. In January 2024, according to the indictment, Lui submitted a purchase order for 27 servers worth approximately $7.614 million.
The equipment travelled from Los Angeles to Kuala Lumpur. The packing list that went with it stated that the GPU servers could not be sent to China without a licence. By March 2024, prosecutors say, an alleged partner emailed a Malaysian government official confirming that the 27 servers had been forwarded to a buyer in China.
The Money: $176 Million in Ten Months
The financial allegation is what supports the money laundering count. Between January and October 2024, the indictment states, Earthmade Computer received more than $176 million from companies based in Malaysia.
That figure is a fraction of the roughly $300 million in total hardware value prosecutors attribute to the scheme, and it covers only ten months of a period the indictment places across 2023 and 2024.
What Each Count Carries
Lui faces three counts, each with a separate statutory maximum.
| Count | Maximum sentence |
|---|---|
| Conspiracy to violate the Export Control Reform Act and the Export Administration Regulations | 20 years |
| Conspiracy to commit money laundering | 20 years |
| Outbound smuggling | 10 years |
These are statutory ceilings rather than expected outcomes. Federal sentences are set by a judge, can run concurrently, and in practice are usually well below the maximum.
Who Investigated, and Where the Case Stands
Three agencies worked the investigation: the FBI’s Counterintelligence and Espionage Division, the Defense Criminal Investigative Service, and the Office of Export Enforcement at the Commerce Department’s Bureau of Industry and Security. The case is being prosecuted in the Central District of California, with a trial attorney from the Justice Department’s National Security Division assigned alongside Assistant US Attorneys.
First Assistant US Attorney Bill Essayli said in the announcement that “this defendant allegedly used false paperwork and shipments through third countries to smuggle more than $300 million in export-controlled computer servers to China”.
As of 3 October 2026, Lui has been charged but not tried. The Justice Department’s statement notes that an indictment is only an allegation and that defendants are presumed innocent until proven guilty beyond a reasonable doubt. No trial date has been made public, and no defence response had been entered on the docket when the case was first reported.
The case sits in a widening enforcement pattern. Earlier charges in Southern California involved two Chinese nationals accused of exporting Nvidia hardware, and the restrictions themselves remain unsettled territory in US and Chinese talks over chip controls. For background on the hardware, see our explainer on the Nvidia H100 accelerator.
Nvidia Chip Smuggling: Questions Readers Are Asking
Who Has Been Charged?
Greg Lui, also known as Yiu Kong Lui, 38, of San Gabriel, California, who prosecutors say owned Earthmade Computer Inc. He was indicted on 29 September 2026 and arrested on 1 October 2026.
Why Is Sending Nvidia Servers to China Illegal?
United States export rules require a Commerce Department licence to send advanced GPU servers to China. Shipping them without that licence, directly or by re-export through another country, is a violation.
Which Countries Were Used in the Alleged Route?
Malaysia and Singapore, according to the indictment. Servers were allegedly shipped there first, then forwarded into China.
What Is the $176 Million Figure?
It is the amount prosecutors say Earthmade Computer received from Malaysia-based companies between January and October 2024. It supports the money laundering conspiracy count.
Has He Been Convicted?
No. The charges are allegations only. The Justice Department states that all defendants are presumed innocent until proven guilty beyond a reasonable doubt, and no trial date has been announced.
