The Department of Justice reported Aug. 5 that two Chinese nationals have been arrested on a federal criminal complaint alleging that they knowingly exported to China tens of millions of dollars’ worth of sensitive microchips used in artificial intelligence applications. These individuals have been charged with violating the Export Control Reform Act, a felony that carries a maximum penalty of 20 years in prison.
According to a DOJ press release, from October 2022 to July 2025 the defendants knowingly and willfully exported from the U.S. to China sensitive technology, including graphic processing units (which are specialized computer parts used for modern computing) without first obtaining the required license or authorization from the Department of Commerce. According to the complaint, the defendants established a company to carry out these actions shortly after the DOC began requiring licenses for the advanced microchips that the defendants are alleged to have illegally exported.
The DOJ adds that a review of export records, business records, and company websites indicates that a December 2024 shipment and at least 20 previous shipments by the company at hand involved exports from the U.S. to shipping and freight-forwarding companies in Singapore and Malaysia, “which commonly are used as transshipment points to conceal illegal shipments to China.”
It is alleged that the company did not receive payments from the entities to which it purportedly exported the goods; rather, it received numerous payments from companies based in Hong Kong and mainland China, including a $1 million payment from a China-based company in January 2024.
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