Two Southern California residents have been arrested and face federal criminal charges allegedly sending China illegally “a sensitive microchip worth tens of millions of dollars worth of used in artificial intelligence (AI) applications.”
“Chuan Gen, 28, and Siue Yang, 28, of Pasadena, and Siue Yang, 28, of El Monte, are accused of violating the Export Control Reform Act, a felony sentenced to a 20-year maximum statutory prison sentence,” the U.S. Department of Justice said in a news release.
From 2022 until last month, the pair sent out a graphics processing unit. This is Alx Solutions Inc., where DOJ is based in El Monte.
Both countries “generally use illegal shipments as a shipping point to China,” and the payments received by ALX Solutions came from “including $1 million payments from China-based companies in January 2024, including companies based in Hong Kong and China.”
The shipping of these chips, which DOJ describes as “the most powerful GPU chips on the market,” is designed for use in “autonomous driving vehicles, medical diagnostic systems, and other AI-powered applications.”
In fact, prosecutors allege that Geng and Yang intentionally tried to skirt that requirement.
“Last week, law enforcement searched the office of ALX Solutions and seized mobile phones belonging to Geng and Yang, revealing offenceful communications between the defendants, including communications regarding the shipment of export extermination chips to China through Malaysia to avoid US export laws,” the release states.
Geng, a legal permanent resident, was released on a $250,000 bond. Yang, who overestimated his visa, is serving on the detention hearing set on August 12th.
Both are scheduled to be arrested on September 11th.
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