DOJ charges three over a $2.5bn Nvidia chip-smuggling scheme

The US Attorney’s Office for the Southern District of New York unsealed an indictment charging three men with conspiring to divert roughly $2.5 billion worth of US-made servers containing Nvidia GPUs to China without the export licences the Commerce Department requires. One defendant, Yih-Shyan “Wally” Liaw, is a co-founder, board member and senior vice-president at Super Micro Computer, the publicly traded server manufacturer whose hardware the scheme used; a second, Ruei-Tsang “Steven” Chang, managed the company’s Taiwan office; the third, Ting-Wei “Willy” Sun, was a third-party broker. Liaw and Sun were arrested and presented in the Northern District of California; Chang remained a fugitive. Super Micro itself was not charged.

Prosecutors said the three directed executives at an unnamed Southeast Asian company to place purchase orders with Super Micro, which assembled many of the servers in the US and shipped them to its Taiwan facilities before onward delivery to that company. The Southeast Asian firm then used a logistics company to repackage the servers into unmarked boxes and route them to their actual buyers in China, while the defendants and the firm’s executives produced false documents showing it as the end user. Between 2024 and 2025 the Southeast Asian company purchased about $2.5 billion worth of servers this way; prosecutors said at least $510 million of that moved in a three-week span between late April and mid-May 2025 alone. To pass a compliance check, the group staged thousands of non-working “dummy” servers at a warehouse where the real equipment was supposed to be stored, after it had already shipped to China.

The three were each charged with one count of conspiring to violate the Export Control Reform Act, carrying a maximum 20-year sentence, plus conspiracy to smuggle goods and conspiracy to defraud the United States, each carrying a maximum five years. US Attorney Jay Clayton said diversion schemes “generate billions of dollars in ill-gotten gains and pose a direct threat to U.S. national security.”

The case was one of the earlier entries in a run of chip-diversion prosecutions through 2026. Sun pleaded guilty in October to an expanded set of four counts, including obstruction of justice over the staged inspection; Liaw and Chang had not resolved their charges as of that plea.