Plot to send GPUs to China leads to indictment

Four men indicted on federal criminal charges related to export scheme Nvidia Chips worth millions of dollars shipped to China and Hong Kong, in violation of strict US restrictions Court documents show.

One of the defendants, Brian Curtis Raymond The 46-year-old Huntsville, Alabama, resident was identified last week as the chief technology officer of an AI cloud company in Virginia that announced plans for a merger that would allow its shares to be publicly traded.

That company is not involved in the case and told CNBC that the job offer was rescinded.

Raymond and three other defendants, all of whom were born in China or Hong Kong, are charged with conspiracy to violate the law. Export Control Reform Act of 2018 In connection with the export of Nvidia chips, and after the chips were first shipped to Malaysia and Thailand, an attempt was made to export them to end users in China and Hong Kong.

According to the indictment, the defendants did not receive a license or authorization from the Ministry of Commerce for such exports.

Chips shipped to China as part of the alleged scheme, which began in September 2023, included Nvidia’s A100 and H200 graphics processing units and Hewlett Packard Enterprise products, according to the indictment filed Nov. 13 in U.S. District Court in Tampa, Florida.

The indictment states that the export of the chips is highly restricted due to their use in artificial intelligence and supercomputing applications.

The indictment appeared for the first time Court MonitoringCourt document aggregation news site founded by counterterrorism investigator Seamus Hughes.

The indictment states that China is “rapidly developing high-end supercomputing capabilities and announcing its intention to become a world leader in artificial intelligence by 2030.”

“These capabilities are used by the PRC [People’s Republic of China] The indictment states that it is due to military modernization efforts and in connection with the PRC’s weapons design and testing, including guns and weapons of mass destruction.

Raymond owned a technology products distribution company in Huntsville that was “licensed to sell Nvidia GPUs.” [graphics processing units]”As well as other products,” the indictment says.

Raymond’s LinkedIn page states that his company, Bitworks, is or is an “Nvidia Cloud Partner offering customers the H100, H200, and upcoming Blackwell/NVL72 clusters.”

The indictment alleges that Raymond and another defendant in the case, Mathew Ho, “caused Nvidia GPU chips to be shipped to third countries, knowing that the GPUs would ultimately be shipped to and shipped to the People’s Republic of China.”

Ho, 34, born in Hong Kong, is a US citizen living in Florida. Also known as Hon Ning Ho.

The indictment states that Ho was the registered representative of a company called Janford Realtor in Tampa, and despite his name, he was not involved in any real estate transactions, but instead “intermediated many illegal and unlicensed exports” of advanced and highly controlled chips to China.

The indictment states that as part of the alleged conspiracy, Ho and Raymond would submit documents related to shipments containing false information about the ultimate co-signatories of the chips, the value of the chips, and the licenses required to export them.

Raymond did not respond to requests for comment. His wife declined to comment.

Raymond’s attorney, Tae Lee, declined to comment on the accusations. Lee also refused to say where Raymond is now and whether he has been arrested.

Raymond was identified on November 10, three days before the indictment was filed in Tampa. Press release issued by CorvexHe serves as chief technology officer of an artificial intelligence cloud company based in Arlington, Virginia.

In the press release Corvex and Movano HealthCorvex, a publicly traded company that sells medical wearable products, had agreed to a merger that would make Corvex publicly traded.

“Corvex had no role in the activities outlined in the Department of Justice indictment,” a Corvex spokesperson told CNBC when asked about Raymond.

“The person in question is not an employee of Corvex. He was previously working as a consultant in the company and was transitioning to an employee position, but this offer was cancelled,” the spokesman said.

In addition to the top count of conspiracy, Raymond is charged with two counts of violating the Export Control Reform Act in connection with an attempt to export 50 Nvidia H200 GPUs to China via Thailand earlier this year and an attempt to export approximately 10 HP supercomputers containing Nvidia H100 GPUs to China via Thailand earlier this year.

He is also accused of smuggling goods from the United States in connection with the attempted export of 50 Nvidia H200 chips.

Raymond is also indicted on seven counts of money laundering related to wire transfers totaling more than $3.4 million from a bank account owned by a company in China to a bank account owned by Raymond’s company in Huntsville and Janford Realtor.

According to court documents, Ho and two other defendants in the case, Jing Chen and Cham Li, were arrested recently.

The indictment states that the three men, as part of the alleged conspiracy, would identify customers in China who wanted to purchase Nvidia chips.

Ho and Chen, 45, also known as Harry Chen, were arrested in Tampa. They are being held without bail.

In addition to the conspiracy charge, Ho is also charged with nine counts of money laundering in connection with $4 million in wire transfers from the Chinese company’s bank account to Janford Realtor and Raymond’s company.

He is also charged with four counts of violating the Export Control Reform Act and three counts of smuggling.

Ho’s attorney, Samuel Williams, declined to comment on the case.

Chen is a Chinese citizen who entered the United States on a student visa and resides in Tampa.

He is charged with conspiracy, one count of violating ECRA and one count of smuggling.

Information regarding Chen’s lawyer was not made public.

Lialso known as Tony Li, was arrested in California and was scheduled to appear in Oakland federal court on Thursday. Information about Li’s lawyer was not available.

According to the indictment, it was stated that Li, a Chinese national living in California, was the manager of Janford Real Estate Agency.

He is charged with single counts of conspiracy, violating ECRA and trafficking.

— CNBC’s Samantha Subin contributed to this story.