Two men with ties to China have been taken into U.S. custody over an alleged scheme to illegally ship advanced Nvidia chips to China, according to the Justice Department, in a case unfolding as Washington eases restrictions on certain chip exports to Beijing.
Federal prosecutors said Monday that Fanyue Gong, a 43 year old Chinese national living in New York, and Benlin Yuan, a 58 year old Canadian citizen originally from China, are accused of helping move Nvidia H100 and H200 chips to China in violation of U.S. export controls. The case comes as President Donald Trump approved the export of Nvidia’s H200 chips to China under specific conditions, highlighting the complex balance between enforcement and trade policy.
Court filings allege that Gong and Yuan worked separately but along similar lines, coordinating with employees at a Hong Kong based logistics firm and a China based technology company. Prosecutors say the goal was to quietly bypass U.S. restrictions on high performance semiconductors that can be used in advanced computing.
According to the criminal complaints, the defendants and their associates obtained Nvidia chips through straw buyers and middlemen. The purchases were allegedly disguised by claiming the chips were intended for customers in the United States or third countries such as Taiwan and Thailand.
Once acquired, the chips were shipped to warehouses across the United States. Prosecutors allege that individuals there removed original Nvidia labels and replaced them with labels bearing the name of what authorities believe was a fictitious company. The relabeled chips were then prepared for overseas shipment.
In a separate filing, prosecutors said Yuan played a key role in organizing inspectors who examined the mislabeled chips on behalf of the Hong Kong logistics company. He allegedly instructed inspectors not to state that the goods were bound for China and helped coordinate a cover story to recover shipments that were seized by federal authorities.
The Justice Department estimates the operation had been running since at least November 2023, based on transaction records and communications outlined in court documents.
Yuan’s attorney declined to comment on the allegations, and a representative for Gong could not immediately be reached.
The case builds on earlier prosecutions tied to the same alleged network. Another individual, Alan Hao Hsu, 43, and his company pleaded guilty in October to smuggling and unlawful export charges, the Justice Department said.
Prosecutors allege Hsu and his firm received more than 50 million dollars in wire transfers from China, which helped finance operations that exported or attempted to export at least 160 million dollars worth of restricted Nvidia chips.
A spokesperson for the Chinese Embassy in Washington said China expects its citizens abroad to obey local laws while also stressing that Beijing will protect the lawful rights of Chinese nationals overseas.
U.S. officials have framed the case as part of a broader push to enforce export rules designed to keep sensitive technology out of the hands of foreign governments and companies of concern.
Â
Africa Digital News, New YorkÂ
