Two Chinese nationals — one of them an illegal immigrant — were arrested for allegedly shipping tens of millions of dollars’ worth of sensitive microchips used in artificial intelligence (AI) applications to China, the Justice Department announced Tuesday.
The federal criminal complaint charges Chuan Geng, 28, of Pasadena, California, and Shiwei Yang, 28, of El Monte, California, with violating the Export Control Reform Act.
Prosecutors said the felony offense carries a statutory maximum penalty of 20 years in prison. Yang — an illegal immigrant who overstayed her visa — was arrested on Saturday. Geng surrendered to federal authorities later that day, the DOJ said.
PATEL SOUNDS ALARM AS CHINESE NATIONALS CHARGED WITH SMUGGLING ‘AGROTERRORISM AGENT’ INTO US: ‘DIRECT THREAT’
They made their initial appearance in U.S. District Court in Los Angeles on Monday but no pleas were taken. At that time, a federal magistrate judge ordered Geng — a lawful permanent resident — released on $250,000 bond.
The judge also scheduled an Aug. 12 detention hearing for Yang. Their arraignment is scheduled for Sept. 11.
Through their El Monte-based company, ALX Solutions Inc., Geng and Yang allegedly “knowingly and willfully” exported from the United States to China sensitive technology, including graphic processing units (GPUs) — specialized computer parts used for modern computing — without first obtaining the required license or authorization from the U.S. Department of Commerce, according to affidavit filed with the complaint. The activity allegedly began in October 2022 and continued until July 2025.
According to the complaint, ALX Solutions Inc. was founded shortly after the Department of Commerce began requiring licenses for the advanced microchips that Yang and Geng are alleged to have illegally exported.
The Justice Department said that 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 — commonly used as transshipment points to conceal illegal shipments to China. According to the complaint, ALX Solutions has not received payments from the entities to which they purportedly exported goods. Instead, prosecutors say, ALX Solutions received numerous payments from companies based in Hong Kong and China, including a $1 million payment from a China-based company in January 2024.
CHINESE CITIZEN ADMITS STEALING US TRADE SECRETS FOR NEXT-GENERATION NATIONAL SECURITY TECH
Prosecutors allege that ALX Solutions sent a shipment in December 2024 that falsely labeled that it was sending GPUs subject to federal laws and regulations. The complaint says the shipment actually contained GPUs that required a license for export to China. Neither Geng nor Yang (nor their company) applied for or obtained a license from the Department of Commerce.
The Justice Department said the chip was “made by a manufacturer of high-performance AI chips” and is considered the “most powerful GPU chip on the market.” According to the complaint, the chip is “designed specifically for AI applications,” such as “to develop self-driving cars, medical diagnosis systems, and other AI-powered applications.”
Law enforcement searched ALX Solutions’ office last week and seized phones belonging to Geng and Yang. The DOJ said the phones “revealed incriminating communications between the defendants, including communications about shipping export-controlled chips to China through Malaysia to evade U.S. export laws.”
CLICK HERE TO GET THE FOX NEWS APP
The Trump administration has sounded the alarm over Chinese nationals infiltrating U.S. institutions — including American tech companies and universities — for potential sabotage or to gain access to proprietary information worth millions.
Last month, President Donald Trump delivered an AI summit speech asserting that the United States must “win the global race with China” regarding the rapidly evolving technology. The president emphasized the need to remove barriers to maintain U.S. leadership in A.I. and signed three executive orders to expedite federal permitting for AI data centers and infrastructure, expand U.S. AI exports to allied nations and prohibit AI tools in government that are considered ideologically biased or “woke.”