Two businessmen are now in custody for allegedly violating U.S. export control and smuggling laws. As part of the overall investigation, a Houston company and its owner also pleaded guilty to smuggling cutting-edge Artificial Intelligence (AI) technology out of the United States, and the United States has seized over $50 million in Nvidia technologies and cash.
“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. “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.”
“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 J. Ganjei for the Southern District of Texas. “These chips are the building blocks of AI superiority and are integral to modern military applications. The country that controls these chips will control AI technology; the country that controls AI technology will control the future. The Southern District of Texas will aggressively prosecute anyone who attempts to compromise America’s technological edge.”
“Gong and his accomplices allegedly led a complex scheme to smuggle high-performance graphic processing units to China in violation of U.S. export laws,” said Assistant Director Roman Rozhavsky of the FBI’s Counterintelligence Division. “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.”
According to court documents, Alan Hao Hsu, also known as Haochun Hsu, 43, of Missouri City, Texas, and his company, Hao Global LLC, both pleaded guilty to smuggling and unlawful export activities on Oct. 10, 2025. According to now unsealed court documents, between October 2024 and May 2025, Hsu and others knowingly exported and attempted to export at least $160 million worth of export-controlled Nvidia H100 and H200 Tensor Core graphic processing units (GPUs).
The H100 and H200 are high-speed GPUs used for AI applications and high-performance computing. They are designed to process massive amounts of data, advancing generative AI and large language models and accelerating scientific computing. These GPUs are used for both civilian and military applications.
Hsu and others falsified shipping paperwork, misclassifying the true nature of the goods and their recipients to conceal the ultimate destination of the GPUs. Hsu and Hao Global received more than $50 million in wire transfers that originated from the People’s Republic of China (PRC) to help fund the scheme. The GPUs were ultimately shipped to the PRC, Hong Kong and other destinations in violation of U.S. export laws.
At sentencing, Hsu faces up to 10 years in prison on Feb. 18, and Hao Global LLC faces a maximum penalty of twice the gross gain from the offense and a term of probation.
Also charged in relation to the scheme are two PRC natives. Benlin Yuan, 58, the chief executive officer of a Sterling, Virginia, IT services company, which is the U.S. subsidiary of a large PRC IT company based in Beijing, was arrested in Sterling, Virginia, on Nov. 28 and charged with conspiring to violation the Export Control Reform Act (ECRA) of 2018. Yuan is a Canadian citizen who resides in Mississauga, Ontario.
Fanyue Gong, also known as Tom Gong, 43, a PRC citizen who resides in Brooklyn, New York, is the owner of a New York technology company and was arrested in New York on Dec. 3. Gong was charged with conspiring to smuggle goods out of the United States.
According to charging documents, Gong and Yuan also independently conspired with employees of a Hong Kong-based logistics company and a China-based AI technology company to circumvent U.S. export controls.
The criminal complaint against Gong alleges that co-conspirators obtained Nvidia GPUs through straw purchasers and intermediaries, falsely indicating that the goods were for U.S. customers or customers in third countries that do not require a license to export. The GPUs were shipped to multiple U.S. warehouses where individuals who worked for Gong removed Nvidia labels and re-labeled the GPUs with the name “SANDKYAN” – a fake company – and then prepared the goods for export at his direction. The shipping and export paperwork for the GPUs allegedly misclassified the goods as generic computer parts. The charges allege co-conspirators then shipped the goods or attempted to do so to the PRC and Hong Kong in violation of U.S. laws.
According to the complaint, Yuan helped recruit and organize individuals to inspect the mislabeled GPUs on behalf of the Hong Kong logistics company. Yuan allegedly agreed to direct inspectors not to say the goods were destined for the PRC. The government also alleges Yuan directed discussions regarding crafting a story his company could use to get GPUs and other equipment released after federal law authorities detained it. Yuan allegedly engaged in several conversations about providing false information to U.S. authorities regarding the ultimate customer of the goods.
As alleged, Yuan also participated in and agreed to direct actions involving the handling and storage of another export of Nvidia GPUs on behalf of the Hong Kong logistics company.
If convicted, Yuan faces up to 20 years in prison for conspiring to violate ECRA and up to a $1 million fine. If convicted, Gong faces up to 10 years in prison for conspiring to smuggle goods out of the United States.
Hsu was permitted to remain on bond pending sentencing. Yuan and Gong are currently in custody pending further criminal proceedings.
The Commerce Department’s BIS Office of Export Enforcement Dallas Field Office, Immigration and Customs Enforcement Homeland Security Investigations (ICE HSI) Dallas, and FBI New York and Washington Field Offices are investigating the case.
Assistant U.S. Attorneys John Marck and Mark McIntyre for the Southern District of Texas and Trial Attorney Fatema Merchant of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case, with substantial assistance provided by Trial Attorney Yifei Zheng, also from the Counterintelligence and Export Control Section.
A criminal complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
