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Federal prosecutors have charged three men with ties to Super Micro Computer Inc. in a scheme that involved smuggling billions of dollars in American artificial intelligence technology to China using fake documents, shell companies and stage machines, officials said.
The defendants are accused of diverting AI servers worth $2.5 billion – including $510 million in just a few weeks in 2025 – to China.
Yih-Shyan Liaw, 71, an American citizen, and Ting-Wei Sun, 44, from Taiwan, were arrested on Thursday, while a third, Ruei-Tsang Chang, 53, also from Taiwan, is still at large.
“The indictment filed today details alleged efforts to evade US export regulations by using false documents, dummy servers to mislead inspectors, and coordinated shipping schemes, to narrowly limit the actual location of the banned AI technology to China,” Assistant National Security Attorney John A. Eisenberg said in a statement. “These chips are the product of American intelligence, and NSD will continue to enforce our export control laws to protect that advantage.”
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Federal prosecutors have charged three people connected to Super Micro Computer Inc. in an alleged multibillion-dollar scheme to smuggle US artificial intelligence technology back to China. (David Paul Morris/Bloomberg via Getty Images)
Supermicro said Thursday it was notified by the US Attorney’s Office for the Southern District of New York that three people associated with the company have been indicted in connection with the alleged export control scheme. The company said it has not been named as a defendant.
Supermicro said Liaw was the founder, senior vice president of business development and board member, Chang was the sales manager in Taiwan, and Sun was the contractor.
Supermicro said it placed the two employees on administrative leave and severed its relationship with the contractor.
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Federal prosecutors say people connected to Super Micro Computer Inc. they used tactics including dummy servers and hair dryers to change the labels on a program that allegedly smuggled US AI technology to China. (Department of Justice)
“The conduct alleged in the lawsuit violates the company’s policies and efforts to comply with export control laws,” Supermicro said.
According to the indictment, Liaw and Chang – who worked with buyers and clients in China – allegedly instructed executives at a Southeast Asian-based company to place purchase orders with a US manufacturer of servers equipped with certain GPUs, purporting to be that company.
The servers were often assembled in the US before being delivered to a company in Southeast Asia, which then repackaged them in unmarked boxes to hide their contents before shipping them to China.
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On March 19, 2026, federal prosecutors alleged a multibillion-dollar scheme to divert US artificial intelligence technology to China in violation of export laws. (Department of Justice)
The defendants and the company’s management allegedly prepared false documents and communications to show that the company was the one who could use the servers.
US Attorney Jay Clayton for the Southern District of New York accused the defendants of participating in a “systematic scheme” to divert servers with US artificial intelligence technology to Chinese customers.
“They do this through elaborate lies, obfuscation, and concealment – all to facilitate sales and generate revenue in violation of US law,” he said. “Diversion schemes like the ones disrupted today generate billions of dollars in ill-gotten gains and put America’s national security at risk.”
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The Justice Department has indicted three people for allegedly illegally exporting US AI technology to China, officials said on March 19. (BRENDAN SMIALOWSKI/AFP via Getty Images)
Roman Rozhavsky, assistant director of the FBI’s Counterintelligence and Espionage Division, added that “controlling the export of US artificial intelligence technology is essential to protecting our national security and national security.”
Prosecutors said the defendants took “extensive measures” to cover up the scheme.
According to the lawsuit, the defendants installed thousands of “dummy” servers – non-functional replicas of the US manufacturer’s servers – to fool their compliance team.
Authorities say surveillance video captured the defendants fixing dummy servers in the warehouse. Prior to the US Commerce Department’s inspection, they allegedly used a hair dryer to remove and reuse labels and serial number stickers on server boxes and dummy servers.
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They then repackaged the dummy servers in the US manufacturer’s boxes, according to the lawsuit.
The defendants were charged with conspiracy to violate the Export Control Reform Act, which carries a maximum sentence of 20 years, as well as conspiracy to smuggle goods and conspiracy to defraud the United States, each carrying a sentence of five years.
