Washington, Dec 9 (NationPress) US officials have successfully dismantled a significant smuggling network linked to China that illegally transported advanced Nvidia artificial intelligence chips out of the nation. More than $50 million in GPUs and cash were seized, alongside multiple arrests of individuals accused of breaching export-control regulations.

In a statement regarding 'Operation Gatekeeper', the Justice Department revealed that this network was responsible for redirecting high-end AI chips to China, Hong Kong, and various restricted locations by falsifying documentation, mislabeling shipping records, and processing payments through wire transfers originating from the People's Republic of China.

“The United States has consistently highlighted the significance of innovation and has contributed an astonishing amount of cutting-edge technology, including the advanced computer chips that enable modern AI,” stated John A. Eisenberg, Assistant Attorney General for National Security. “This advantage is not simply given but is the result of our engineers’ and scientists’ dedication and effort.”

U.S. Attorney Nicholas J. Ganjei for the Southern District of Texas remarked that the investigation unveiled “a sophisticated smuggling network that poses a threat to our Nation’s security by transferring state-of-the-art AI technology to those who may employ it against American interests.” He further noted, “These chips are fundamental to achieving AI dominance and are crucial for contemporary military applications.”

The FBI indicated that the operation utilized intricate procurement methods and intentional deception to transport restricted items.

“Gong and his accomplices are accused of orchestrating a complicated scheme to smuggle high-performance graphics processing units to China, contravening US export laws,” explained Roman Rozhavsky, Assistant Director of the FBI’s Counterintelligence Division.

Court documents reveal that Alan Hao Hsu, 43, from Missouri City, Texas, and his firm, Hao Global LLC, admitted guilt on October 10 concerning smuggling and unlawful export activities. Prosecutors alleged that between October 2024 and May 2025, Hsu and associates exported or sought to export at least $160 million worth of Nvidia H100 and H200 Tensor Core GPUs, recognized as some of the most advanced AI processors globally.

Hsu and his partners are believed to have falsified shipping documents and concealed the actual destination of the chips. Hao Global received over $50 million in wire transfers from China to finance the operation. Hsu faces a potential sentence of up to 10 years in prison during his sentencing on February 18.

Two additional individuals are currently in custody. Benlin Yuan, 58, the CEO of a Sterling, Virginia IT subsidiary of a Beijing-based company, was arrested on November 28 and charged with conspiracy to violate the Export Control Reform Act of 2018. On December 3, Fanyue 'Tom' Gong, 43, a Chinese national residing in Brooklyn, was arrested and charged with conspiring to smuggle goods out of the United States.

Charges against Gong allege that he employed straw purchasers and relabeled Nvidia GPUs under the fictitious brand 'SANDKYAN', while Yuan reportedly coordinated inspections and discussed providing false information to authorities.

This enforcement action comes at a time of heightened US export restrictions on advanced AI chips due to concerns that they could enhance China’s military modernization and cyber capabilities.