Washington, Dec. 9 (LatestNewsX) – U.S. officials announced they have dismantled a large China‑linked smuggling ring that covertly shipped cutting‑edge Nvidia AI processors out of the country. The crackdown seized over $50 million in GPUs and cash and led to the arrest of several people charged with breaching export‑control laws.
The Justice Department called the operation “Operation Gatekeeper,” revealing that the network funneled high‑end AI chips to China, Hong Kong, and other restricted areas by forging documents, mislabeling shipments, and routing payments through wire transfers that originated in the People’s Republic of China.
Assistant Attorney General for National Security John A. Eisenberg said, “The United States has long emphasised the importance of innovation and is responsible for an incredible amount of cutting‑edge technology, such as the advanced computer chips that make modern AI possible. This advantage isn’t free but rather the result of our engineers’ and scientists’ hard work and sacrifice.”
US Attorney Nicholas J. Ganjei of the Southern District of Texas described the investigation as exposing “a sophisticated smuggling network that threatens our Nation’s security by funnelling cutting‑edge AI technology to those who would use it against American interests.” He added, “These chips are the building blocks of AI superiority and are integral to modern military applications.”
According to the FBI, the scheme used intricate procurement channels and deliberate deception to move restricted goods. Assistant Director of the FBI’s Counterintelligence Division Roman Rozhavsky stated, “Gong and his accomplices allegedly led a complex scheme to smuggle high‑performance graphic processing units to China in violation of U.S. export laws.”
Unsealed court documents show that Alan Hao Hsu, 43, of Missouri City, Texas, and his firm Hao Global LLC pleaded guilty on Oct. 10 to smuggling and unlawful export offenses. Prosecutors say that between Oct. 2024 and May 2025, Hsu and associates exported—or tried to export—at least $160 million worth of Nvidia H100 and H200 Tensor Core GPUs, among the world’s most advanced AI processors.
Hsu’s operation involved falsifying shipping paperwork and hiding the true destination of the chips, while the company received more than $50 million in China‑originated wire transfers to bankroll the scheme. He faces up to ten years in prison at his February 18 sentencing.
Two other suspects are now in custody. Benlin Yuan, 58, CEO of a Sterling, Virginia IT subsidiary of a Beijing‑based firm, was arrested Nov. 28 and charged with conspiring to violate the Export Control Reform Act of 2018. On Dec. 3, Fanyue “Tom” Gong, 43, a Chinese citizen residing in Brooklyn, was arrested and charged with conspiring to smuggle goods out of the United States.
Charges allege that Gong used straw purchasers and rebranded Nvidia GPUs under the fictitious name “SANDKYAN,” while Yuan allegedly coordinated inspectors and supplied false information to authorities. The crackdown comes amid tighter U.S. export restrictions on advanced AI chips, driven by concerns that they could accelerate China’s military modernization and cyber capabilities.
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