Three men, including one from the Houston area, have been charged with smuggling advanced AI technology to China in violation of U.S. export laws, the Department of Justice announced.
Alan Hao Hsu, 43, of Missouri City, Texas, and his company Hao Global LLC pleaded guilty on October 10 to unlawful export of at least $160 million worth of restricted Nvidia H100 and H200 Tensor Core GPUs — high-performance chips critical for artificial intelligence and large language models.
In exchange, Hsu and his company received more than $50 million in wire transfers from China. Federal authorities seized over $50 million in Nvidia hardware and cash. Hsu faces up to 10 years in prison at sentencing on February 18, 2026; his company faces fines up to twice the gross gain plus probation.
Two alleged co-conspirators from China were also arrested:
- Benlin Yuan, 58, a Canadian citizen and CEO of a Virginia-based subsidiary of a Beijing company, was arrested on November 28 in Sterling, Virginia. He is charged with conspiracy to violate the Export Control Reform Act and faces up to 20 years if convicted.
- Fanyue “Tom” Gong, 43, a Chinese citizen from Brooklyn, New York, was arrested on December 3. He is charged with conspiracy to smuggle goods and faces up to 10 years in prison.
Prosecutors say the trio used straw purchasers, falsified shipping documents, mislabeled shipments as generic computer parts under the fake brand “SANDKYAN,” and routed goods through U.S. warehouses before attempting to send them to China and Hong Kong.
“Operation Gatekeeper has exposed a sophisticated smuggling network that threatens our Nation’s security by funneling cutting-edge AI technology to those who would use it against American interests,” said U.S. Attorney Nicholas Ganjei (Southern District of Texas). “The country that controls these chips will control AI technology; the country that controls AI technology will control the future.”
FBI Counterintelligence Assistant Director Roman Rozhavsky added, “This case highlights the importance of interagency cooperation to protect U.S. technology; the FBI, alongside our partners, will continue to aggressively investigate these violations and bring those responsible to justice. We ask our private sector partners to remain vigilant to this increasing threat as our adversaries try to match U.S. artificial intelligence breakthroughs.”
“The United States has long emphasized the importance of innovation and is responsible for an incredible amount of cutting-edge technology, such as the advanced computer chips that make modern AI possible,” said Assistant Attorney General for National Security John A. Eisenberg in the press release. “This advantage isn’t free but rather the result of our engineers’ and scientists’ hard work and sacrifice. The National Security Division, along with our partners, will vigorously enforce our export-control laws and protect this edge.”
In November, federal prosecutors charged three Chinese nationals at the University of Michigan with conspiring to smuggle “biological materials related to round worms” into America, as The Dallas Express reported at the time.
This summer, law enforcement arrested two Chinese nationals in California – one legal resident, and one illegal – for allegedly smuggling tens of millions of dollars worth of GPU chips to China, as The Dallas Express reported at the time. In June, Texas Agriculture Commissioner Sid Miller raised the alarm about Chinese nationals smuggling dangerous fungus into the United States.