Attempt to Smuggle GPUs to China Results in Indictment

Federal prosecutors have unveiled an indictment against four individuals accused of conspiring to illegally export millions of dollars worth of Nvidia chips to China and Hong Kong, circumventing stringent U.S. export controls. The court documents, unsealed in U.S. District Court in Tampa, Florida, outline a scheme to route the chips through Malaysia and Thailand to obfuscate their final destination.

The core issue revolves around the strategic importance of these advanced chips. The U.S. government has implemented export restrictions on high-performance computing components, particularly those designed for Artificial Intelligence (AI) and supercomputing, due to their potential use in military applications and weapons development by foreign adversaries.

Brian Curtis Raymond, 46, residing in Huntsville, Alabama, was recently identified as the chief technology officer of an AI cloud company based in Virginia that had announced plans to go public via a merger. The company, which is not implicated in the alleged illegal activities, confirmed to CNBC that Raymond was transitioning into an employee role but the offer has since been rescinded. Raymond, along with the other three individuals – all born in China or Hong Kong – face charges of conspiring to violate the Export Control Reform Act of 2018.

According to the indictment, the defendants allegedly failed to secure the necessary licenses from the U.S. Department of Commerce for these exports. The U.S. Attorney’s Office for the Middle District of Florida alleges that the scheme involved the successful export of 400 Nvidia A100 chips to China between October 2024 and January. Law enforcement intervened to disrupt subsequent attempts to export ten Hewlett Packard Enterprise supercomputers equipped with Nvidia H100 GPUs and 50 standalone Nvidia H200 GPUs.

The indictment also highlights the broader geopolitical context, noting China’s ambition to become a global leader in AI by 2030 and its rapid development of exascale supercomputing capabilities. It alleges that these capabilities are being leveraged to bolster China’s military modernization, including weapons design and testing, potentially including weapons of mass destruction.

Raymond’s LinkedIn profile indicates that his company, Bitworks, was an “Nvidia Cloud Partner” specializing in H100, H200, and future Blackwell / NVL72 clusters. Prosecutors contend that Raymond and Mathew Ho, 34, born in Hong Kong and a U.S. citizen residing in Florida, conspired to route the Nvidia GPUs through third countries, knowing their ultimate destination was the People’s Republic of China.

Ho, also known as Hon Ning Ho, is linked to a Tampa-based company called Janford Realtor. Despite the name, the indictment alleges that Janford Realtor never engaged in real estate transactions but functioned as an intermediary for the illicit export of controlled chips to China.

The legal filings accuse Ho and Raymond of submitting falsified documentation related to the shipments, including misleading information about the chips’ value, the required export licenses, and the identity of the end recipients.

Raymond faces additional charges, including two counts of violating the Export Control Reform Act related to the attempted exports of the Nvidia H200 GPUs and HP supercomputers, as well as one count of smuggling goods from the U.S. He is also charged with seven counts of money laundering, involving wire transfers totaling over $3.4 million from a Chinese company’s bank account to accounts affiliated with Raymond’s company and Janford Realtor.

The other defendants, Jing Chen, 45 (also known as Harry Chen), and Cham Li, 38 (also known as Tony Li), are alleged to have identified Chinese customers interested in purchasing the restricted Nvidia chips.

Ho also faces nine counts of money laundering related to $4 million in wire transfers from the Chinese company to Janford Realtor and Raymond’s company. He is further charged with four counts of violating the Export Control Reform Act and three counts of smuggling.

Each of the four defendants faces a potential maximum sentence of 20 years in prison if convicted.