Two Chinese nationals—one of whom was unlawfully present in the U.S.—have been apprehended on federal charges for allegedly exporting sensitive microchips valued at tens of millions of dollars, which are utilized in artificial intelligence (AI) applications, as announced by the U.S. Department of Justice in a press release on Tuesday.
Chuan Geng, 28, from Pasadena, and Shiwei Yang, 28, from El Monte, face accusations of breaching the Export Control Reform Act, a felony that could result in a maximum prison sentence of 20 years. Geng voluntarily surrendered to federal authorities on Saturday, while Yang was arrested on the same day.
An affidavit submitted with the complaint alleges that the defendants utilized their company, ALX Solutions Inc., to knowingly export sensitive U.S. technology to China, including graphic processing units (GPUs)—essential components in contemporary computing—without securing the required license or authorization from the U.S. Department of Commerce.
The complaint highlights that ALX Solutions was founded shortly after the Commerce Department instituted licensing requirements for the advanced microchips that Yang and Geng are accused of exporting illegally.
An examination of export data, corporate records, and online company information indicated that a shipment scheduled for December 2024—and at least 20 previous shipments—were directed from the U.S. to freight-forwarding companies located in Singapore and Malaysia, as stated by the DOJ in its press release.
Both nations are recognized as transshipment hubs frequently employed to conceal unauthorized exports to China.
Despite ALX Solutions asserting that it shipped goods to designated recipients, the company did not receive any payments from those entities. Instead, it obtained multiple payments from companies based in China and Hong Kong, including a $1 million payment from a China-based firm in January 2024.
In a specific case brought to light by prosecutors, ALX Solutions submitted export documentation in December 2024 that falsely asserted a shipment of GPUs, which are categorized as requiring an export license to China. The Department of Justice (DOJ) stated that neither the defendants nor their company sought or obtained the requisite authorization from the Commerce Department, as further noted in the release.
As per the complaint and publicly accessible information, the chip in question is described as the “most powerful GPU chip on the market” and is “specifically designed for AI applications,” including uses such as “developing self-driving vehicles, medical diagnostic systems, and other AI-driven applications.”
The manufacturer was not identified, with the department referring to them merely as “a manufacturer of high-performance AI chips.”
Last week, federal agents executed a search warrant at ALX Solutions’ office in El Monte, seizing phones belonging to Geng and Yang, which contained incriminating communications between the defendants.
The two Chinese nationals reportedly discussed methods to circumvent U.S. export regulations concerning China by initially rerouting the packages through Malaysia to avoid detection, as noted by the DOJ.
In a separate development earlier this week, Attorney General Pam Bondi instructed a grand jury to investigate claims of a criminal conspiracy related to the ‘Russiagate’ inquiry into the campaign and administration of then-2016 GOP nominee and former President Donald Trump.
This directive follows criminal referrals made to the Justice Department by Director of National Intelligence Tulsi Gabbard and CIA Director John Ratcliffe after the declassification of documents that seemingly implicate officials from the intelligence community during then-President Barack Obama’s administration in conspiring to promote a fabricated ‘Trump-Russia collusion’ narrative devised by the campaign of 2016 Democratic presidential nominee Hillary Clinton.
Fox News was the initial outlet to disclose Bondi’s action.
“Fox News can verify that Attorney General Pam Bondi has today executed an order instructing an unnamed U.S. federal prosecutor to present evidence to a grand jury concerning an alleged conspiracy linking then 2016 candidate Donald Trump to the nation of Russia,” network correspondent David Spunt informed host Will Cain on Monday.
“At this moment, Fox News has examined the one-page order, which was signed by the Attorney General just hours ago. A source acquainted with the investigation has also confirmed this information. Although a spokesperson from the Department of Justice refrained from commenting on this investigation report, Fox has been informed that Attorney General Bondi is treating the referrals from Director of National Intelligence Tulsi Gabbard ‘with utmost seriousness,'” Spunt stated.