A technology-company owner in California has been charged over the alleged shipment of more than $300 million worth of computer servers subject to US export regulations to China, with the hardware routed through Malaysia and Singapore, according to the Justice Department.

The case illustrates a fundamental challenge the US export control regime: ensuring that restricted AI-related hardware does not reach unauthorized parties requires not only preventing such components from being sold out of the country, but also tracking their movements through a global supply chain — including the resellers and logistics intermediaries in between.

The charges against Greg L and Earthmade Computer

Greg Lui, 38, who is also known as "Yiu Kong Lui," is the founder of Earthmade Computer Inc., a technology company located in the City of Industry, California. He was arrested on October 1 on allegations of violating US export laws, smuggling, and engaging in money laundering, among other accusations that remain under investigation.

As US prosecutors claim, between 2023 and 2024 Lui and his alleged accomplices procured expensive servers containing GPUs manufactured in the United States, filled out documentation with fictitious destinations and end-users, and exported the systems to China via Malaysia and Singapore.

A single January 2024 deal covered 27 servers valued at $7.6 million. From January through October 2024, Earthmade received more than $176 million from two Malaysia-based shipping companies believed to be connected to the scheme. An arrest is not a conviction; the allegations will now be tested as the case moves through the US court system.

"This defendant allegedly used false paperwork and shipments through third countries to smuggle more than $300 million in export-controlled computer servers to China."

— First Assistant US Attorney Bill Essayli, US Department of Justice

Why Malaysia and Singapore sit at the center

The alleged pathway is significant because US regulations may apply to advanced-computing equipment after its initial foreign destination. In guidance outlined in May 2026, the Bureau of Industry and Security (BIS) explained that licensing obligations may exist when covered items end up in the hands of entities that are organized in — or that have parent companies whose headquarters are in — China, Macau, or other Country Group D:5 countries (countries subject to a US arms embargo), even when the immediate recipient of the items is located elsewhere.

Malaysia and Singapore are also major regional logistics and data-center hubs, and large volumes of advanced computing hardware pass through them lawfully.

In an earlier release, BIS provided guidance on red flags that a diversion may be taking place. Those indicators include freight forwarders or logistics firms acting as end users, buyers unwilling to disclose the name of their ultimate parent company, and sudden increases in orders from customers with little previous purchasing history — patterns tied to the paperwork and routing stage where prosecutors allege this scheme relied on fictitious end-users and third-country shipments.

From the October 2022 rules to tightened enforcement

The United States began restricting the export of advanced-computing chips in October 2022, and the rules have been tightened multiple times since. A Federal Register regulation provided further details in 2023. In practice, the controls mean that covered chips — and the servers built around them — require US licenses for destinations such as China.

A September report from the Center for Strategic and International Studies (CSIS) says export regulations might limit access to strategically important technologies, but might also encourage circumvention and domestic substitution. The report's general conclusion is that such regulations function best when combined with investment in research, talent, and manufacturing.

The access gap the controls are meant to close

China's demand for AI compute continues to rise. TrendForce points to major infrastructure spending, while access to advanced logic, high-bandwidth memory, and CoWoS packaging remains constrained. BCG similarly argues that US and Chinese AI strategies are pushing the two markets toward increasingly separate technology ecosystems.

The boundary is not absolute, however. Cryptopolitan has reported that Nvidia's RTX Pro 5500 may fall outside existing restrictions, while some Chinese companies have received licenses to buy H200 chips.

That is what makes the Earthmade case significant: enforcement now depends not only on which chips are restricted, but on who ultimately receives them — and how they get there.