The owner of a Houston firm has pleaded guilty after officials say a smuggling network moved high-end Nvidia AI chips out of the United States, and authorities seized more than $50 million in technology and cash tied to the scheme.
Federal prosecutors say two businessmen are now in custody and that a Houston company and its owner admitted to smuggling advanced AI hardware overseas. Authorities contend the operation moved export-controlled Nvidia H100 and H200 GPUs and generated at least $160 million in attempted exports between October 2024 and May 2025.
“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.”
Court filings identify Alan Hao Hsu, also known as Haochun Hsu, 43, of Missouri City, Texas, and his company Hao Global LLC as having pleaded guilty to smuggling and unlawful export activities on Oct. 10, 2025. Prosecutors say Hsu and others knowingly exported and attempted to export at least $160 million worth of export-controlled Nvidia H100 and H200 Tensor Core GPUs during the period in question.
“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.”
Federal officials note that the H100 and H200 GPUs are high-speed processors used across generative AI, large language models, and high-performance computing. Those units can accelerate scientific work and are also applied in modern military contexts, which is why export controls tightly regulate their sale and shipment.
“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.”
Prosecutors allege Hsu and co-conspirators falsified shipping paperwork and misclassified the GPUs to hide their true nature and destinations. Investigators say Hsu and Hao Global received more than $50 million in wire transfers that originated from the People’s Republic of China to help fund the scheme, and that shipments ultimately went to the PRC, Hong Kong and other locations in violation of export laws.
Sentencing for Hsu is scheduled for Feb. 18, when he could face up to 10 years in prison; Hao Global LLC faces penalties up to twice the gross gain from the offense and potential probationary terms. Those outcomes reflect the seriousness with which prosecutors view the unlawful export of dual-use technologies tied to national defense and advanced computing.
Two additional defendants charged in connection with the alleged scheme are identified as Benlin Yuan, 58, the CEO of a Sterling, Virginia IT services company and a Canadian citizen living in Mississauga, Ontario, and Fanyue Gong, also known as Tom Gong, 43, a PRC citizen residing in Brooklyn who owns a New York technology firm. Yuan was arrested in Sterling, Virginia, on Nov. 28 and charged with conspiring to violate the Export Control Reform Act of 2018, while Gong was arrested in New York on Dec. 3 on charges of conspiring to smuggle goods out of the United States.
Charging documents describe a network that used straw purchasers and intermediaries to acquire Nvidia GPUs, then moved the parts through U.S. warehouses where labels were removed and new labels reading “SANDKYAN” were applied. The complaint alleges the conspirators misclassified the items on export paperwork as generic computer parts and prepared shipments to the PRC and Hong Kong in violation of U.S. law.
Investigators say Yuan coordinated inspections of mislabeled GPUs and allegedly counseled inspectors to avoid stating the goods’ destination was the PRC. Prosecutors also allege discussions about crafting cover stories to get detained shipments released and that Yuan took steps to handle and store additional Nvidia GPU exports on behalf of a Hong Kong logistics firm.
If convicted, Yuan faces up to 20 years in prison for conspiring to violate ECRA and a fine up to $1 million, while Gong faces up to 10 years for conspiring to smuggle goods. Officials report Hsu was allowed to remain on bond pending sentencing, whereas Yuan and Gong remain in custody as proceedings continue.
The investigations involve multiple agencies including the Commerce Department’s BIS Office of Export Enforcement Dallas Field Office, ICE Homeland Security Investigations in Dallas, and FBI field offices in New York and Washington. 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.
