Federal agents in LA think they’ve cracked this smuggling case wide open, involving a wild scheme of sneaking millions in high-tech graphics processors to China. All masterminded by two folks in their twenties, working out of a bland strip-mall spot in El Monte. I mean, who would’ve thought, right?
So, here’s the scoop. Apparently, this outfit, creatively named ALX Solutions Inc., popped up just after the government decided to clamp down hard on chip exports back in late 2022. Over the next twenty months, these guys sent out 21 shipments. They called them “commodity video cards” (fancy name, huh?) and shipped them through places like Singapore or Malaysia. But customs wasn’t buying it—literally found crates crammed with top-notch accelerators. Labeled simply as “computer parts.” Nice try, but nope.
Money trails? Oh yeah, there’s a bunch of those too. From a big shot in Hong Kong tossing a million bucks upfront, to smaller amounts from Chinese entities tied to defense contractors. And get this, detectives found Signal chats where Chuan Geng, one of the partners, gave tips to the other guy, Shiwei Yang: stuff like “break up orders, never use the same forwarder twice, change labels if anyone pokes around.”
This whole mess draws on a Bureau of Industry and Security rule from October 2022, which blocked China from getting chips that handle huge neural-network tasks—unless they get a special license. The threshold for the ban aligns closely with hardware used in military AI. Makes sense, I guess.
Reading the affidavit feels like some spy novel: mislabeled pallets nabbed by Long Beach customs, serial numbers leading back to Nvidia’s database, and even a stakeout following a delivery van all the way to ALX’s rented warehouse. When they busted in, they found anti-static trays for about a thousand high-end GPUs, values hitting $25 million, along with packing slips for a newbie AI company in Shenzhen.
Geng, who’s legit in the U.S., turned himself in without fuss. Yang, whose student visa ran out in 2020, was nabbed at LAX with a one-way to Taipei. Geng’s out on a $250k bond, but Yang’s cooling his heels in custody until some hearing on August 12. They’re both looking at serious time if found guilty—up to 20 years from the Export Control Reform Act charges.
The Justice Department, working with Los Angeles prosecutors, is all over this. FBI’s calling it “classic transshipment with modern flair,” and the BIS is considering civil penalties or even lifetime export bans.
And there’re some fun plot twists, too. Geng was previously the finance chief of a short-lived e-commerce biz that fizzled out over tax issues, while Yang co-ran a parcel-forwarding gig aimed at sneaker resellers. Neither of them have tech backgrounds, adding to the argument that ALX’s sole deal was sneaking silicon into China’s eager market.
Prosecutors still need the grand jury to step in with an indictment, and the defense already has a card to play: they plan to argue those chips didn’t quite hit the performance bar when they were bought. Expect lots of expert jabber about bandwidth limits and firmware updates. Could have a trial by spring 2026, where we might really see how the U.S. plans to tackle this silicon smuggling scene.
