Politics
NEW: Chinese Nationals Arrested For Allegedly Stealing Sensitive Tech
Two Chinese nationals, one of whom was in the United States illegally, have been arrested on a federal criminal complaint alleging they knowingly exported tens of millions of dollars’ worth of sensitive microchips used in artificial intelligence (AI) applications, the U.S. Department of Justice announced in a press release Tuesday.
Chuan Geng, 28, of Pasadena, and Shiwei Yang, 28, of El Monte, are charged with violating the Export Control Reform Act, a felony that carries a statutory maximum penalty of 20 years in prison. Geng surrendered to federal authorities on Saturday, while Yang was apprehended earlier that day.
According to an affidavit filed with the complaint, the defendants used their company, ALX Solutions Inc, to knowingly export sensitive technology from the United States to China. This included graphic processing units (GPUs) — key components of modern computers — which the pair exported to China without first obtaining the required license or authorization from the U.S. Department of Commerce.
The complaint notes that ALX Solutions was formed shortly after the Commerce Department began requiring licenses for the advanced microchips that Yang and Geng are alleged to have illegally exported.
A review of export records, business records, and company websites indicates that a December 2024 shipment and at least 20 previous shipments by ALX Solutions involved exports from the U.S. to shipping and freight-forwarding companies in Singapore and Malaysia, the DOJ announced in a press release. Both nations are commonly used as transshipment points to conceal illegal exports to China.
ALX Solutions has not received any payments from the entities they claimed to have shipped the goods to. The company has, however, received numerous payments from companies based in Hong Kong and China, including a $1 million payment from a China-based firm in January of last year.
In one example cited by prosecutors, ALX Solutions sent a shipment that falsely claimed it was sending GPUs that required a license for export to China in December of 2024. Neither the defendants nor their company applied for, nor did they obtain a license from the Commerce Department, the release alleges.
According to the complaint and publicly available information, the chip in question is the “most powerful GPU chip on the market,” and is “designed specifically for AI applications,” such as “to develop self-driving cars, medical diagnosis systems, and other AI-powered applications.” The manufacturer was not named, with the department describing them only as “a manufacturer of high-performance AI chips.”
Last week, federal agents conducted a search of ALX Solutions’ office in El Monte and seized phones belonging to Geng and Yang that revealed incriminating communications between the defendants. The two Chinese nationals allegedly discussed ways to skirt U.S. export controls on China by first rerouting the packages through Malaysia in an effort to evade detection.
The case is being prosecuted in the Central District of California by acting U.S. Attorney Bill Essayli.
