Earthmade CEO charged in alleged $300 million AI server smuggling scheme

Federal agents arrested Earthmade Computers founder and CEO Greg Lui over an alleged scheme to export more than $300 million in restricted AI servers to China, the California Post reported.

Lui, 38, also known as Yiu Kong Lui, was arrested at the company’s City of Industry headquarters. He faces charges of conspiracy to violate the Export Control Reform Act, smuggling and conspiracy to commit money laundering. The report said he could face up to 50 years in prison if convicted.

Federal prosecutors allege that Lui and co-conspirators bought and shipped export-controlled technology to China during 2023 and 2024 without the required Department of Commerce licenses.

The servers contained Nvidia processors. Prosecutors say the defendants used false paperwork to identify destinations that did not require licenses, then routed shipments through Malaysia and Singapore before sending them to China.

Earthmade received more than $176 million from two Malaysia-based shipping companies between January and October 2024 in connection with the alleged scheme, according to court papers cited by the Post.

Prosecutors cited a January 2024 email in which Lui allegedly discussed a Malaysian company’s request for 70 servers and acknowledged restrictions on selling the technology. Later that month, he bought 27 servers for about $7.6 million and shipped them from Los Angeles to Kuala Lumpur, the report said.

Two months later, a co-conspirator told a Malaysian official by email that the servers had been sent onward to China, according to prosecutors.

First Assistant US Attorney Bill Essayli said the alleged exports posed national-security risks by potentially strengthening an adversary’s military capabilities. The Department of Commerce, Defense Criminal Investigative Service and FBI are investigating the case.