Supermicro executives charged in $2.5B AI smuggling scheme to China
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Federal prosecutors say Super Micro Computer Inc. used forged documents, front companies and counterfeit equipment to smuggle billions of dollars’ worth of U.S. artificial intelligence technology to China, authorities said. He said that he accused three people related to .
The defendants allegedly diverted $2.5 billion worth of AI servers to China, including $510 million in just a few weeks in 2025.
Yih-Shyan Liaw, a 71-year-old US citizen, and Ting-Wei Sun, 44, from Taiwan, were arrested on Thursday, while a third person, Ruei-Tsang Chang, 53, also from Taiwan, remains at large.
“The indictment unsealed today details alleged efforts to evade U.S. export laws through forged documents, orchestrating fake servers to mislead investigators, and complex transfer schemes to disguise China as the true target of the restricted AI technology,” Assistant Attorney General for Homeland Security John A. Eisenberg said in a statement. he said. “These chips are the product of American ingenuity, and NSD will continue to enforce our export control laws to preserve that advantage.”
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Federal prosecutors say Super Micro Computer Inc. is allegedly linked to a multibillion-dollar scheme to smuggle U.S. artificial intelligence technology to China. He accused three people associated with. (David Paul Morris/Bloomberg via Getty Images)
Supermicro said Thursday that it was notified by the U.S. Attorney’s Office for the Southern District of New York that three people associated with the company had been charged in connection with an alleged export control scheme. The company said it was not named as a defendant.
Liaw is senior vice president of business development and a board member, Chang is a sales manager in Taiwan and Sun is a contractor, Supermicro said.
Supermicro said it placed two employees on administrative leave and terminated its relationship with the contractor.
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Federal prosecutors say Super Micro Computer Inc. He said people associated with . (Ministry of Justice)
“The conduct alleged in the indictment violates the company’s policies and efforts to comply with export control laws,” Supermicro said.
The indictment alleges that Liaw and Chang, working with brokers and clients in China, directed executives of a Southeast Asia-based company to place purchase orders with a U.S. manufacturer for servers equipped with certain GPUs purportedly for that company.
The servers were often assembled in the United States and shipped to Taiwan before being delivered to the company, which repackaged them in unmarked boxes to conceal their contents before shipping them to China.
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On March 19, 2026, federal prosecutors alleged a multibillion-dollar scheme to divert sensitive US artificial intelligence technology to China in violation of export laws. (Ministry of Justice)
It was alleged that the defendants and managers at the company prepared false documents and records and transmitted false communications in order to show that the company was the end user of the servers.
U.S. Attorney for the Southern District of New York Jay Clayton accused the defendants of engaging in a “systematic scheme” to route servers with U.S. AI technology to customers in China.
“They did this through a complex web of lies, concealment and obfuscation to increase sales and generate revenue in violation of U.S. laws,” he said. “Diversion schemes like the ones disrupted today result in billions of dollars in ill-gotten gains and pose a direct threat to U.S. national security.”
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The Justice Department has charged three people in connection with allegedly illegally exporting U.S. artificial intelligence technology to China, officials said March 19. (BRENDAN SMIALOWSKI/AFP via Getty Images)
Roman Rozhavsky, deputy director of the FBI’s Counterintelligence and Espionage Division, added that “Controlling the export of sensitive U.S. AI technology is essential to protecting our national security and defending the homeland.”
Prosecutors said the defendants took “extensive measures” to conceal the plan.
According to the indictment, the defendants staged thousands of “fake” servers — non-working physical copies of the U.S. manufacturer’s servers — to fool the compliance team.
Surveillance video captured the defendants preparing the fake servers in a warehouse, authorities said. They allegedly used a hair dryer to remove and reapply labels and serial number stickers to server boxes and fake servers, ahead of inspection by the U.S. Department of Commerce.
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They then repackaged the fake servers into boxes from the U.S. manufacturer, according to the indictment.
The defendants were charged with conspiracy to violate the Export Control Reform Act, which carries a maximum penalty of 20 years in prison, as well as conspiracy to smuggle goods and conspiracy to defraud the United States, each of which carries a penalty of up to five years in prison.
