Three men face federal charges over an alleged plot to buy U.S. export-controlled AI chips inside computer servers and divert them to China through Thailand, involving large orders, partial payments, and communications that investigators say show intent to conceal the true destination.
Federal prosecutors charged Stanley Yi Zheng, Matthew Kelly, and Tommy Shad English with conspiring to commit smuggling and export control violations tied to a roughly $170 million effort to acquire advanced computing servers. Authorities say the defendants targeted U.S.-made, export-controlled chips and planned shipments routed through Thailand with an ultimate destination of China.
Stanley Yi Zheng, 56, of Hong Kong, was arrested on March 22, 2026, and made an initial appearance on March 23, 2026, before U.S. Magistrate Judge Lisa J. Cisneros in the Northern District of California. The government has asked that Zheng be held without bail pending trial, while Matthew Kelly, 49, of Hopewell Junction, New York, and Tommy Shad English, 53, of Atlanta, surrendered to federal authorities on March 25, 2026 for initial proceedings in other districts.
According to criminal complaints and court documents, the scheme began in about May 2023, when the trio allegedly conspired to obtain computer servers from a California hardware company and export them through Thailand to China in violation of U.S. law. The co-conspirators reportedly used Thailand-based company names as the apparent buyers while intending to divert the U.S.-origin AI chips to Chinese end users.
In October 2023, English, posing for a Thailand-based firm, placed an order for 750 computer servers worth roughly $170 million from one vendor, and 600 of those servers were said to contain a chip that appears on the U.S. Commerce Control List and required an export license to China. English signed an “Advanced Computing Certification” asserting the servers were not destined for China or any country subject to heightened export controls.
In January 2024 English moved more than $20 million to the vendor as a partial payment for that October order. When company staff raised compliance questions about the transaction and the email chain, they noted Zheng’s China-based company and said it was “odd” that no one from the Thailand-based buyer was copied, adding: “China is an embargoed country restricted by the US government. US companies are restricted from selling to businesses or end users headquartered in China.”
Officials emphasized the national-security stakes tied to advanced chips. “The cutting-edge AI chips the defendants allegedly schemed to export to China represent the best of American ingenuity and years of strategic investment in maintaining our technological leadership,” said Assistant Attorney General for National Security John A. Eisenberg. “NSD is committed to protecting U.S. innovation and ensuring that those who violate U.S. export controls face serious consequences.”
Assistant Director Roman Rozhavsky of the FBI’s Counterintelligence and Espionage Division warned that foreign adversaries are escalating efforts to obtain U.S. technology. “Zheng, Kelly, and English allegedly conspired to sell millions of dollars’ worth of American-made AI computer chips to buyers in China, in clear violation of U.S. export controls,” he said, noting the agencies’ ongoing work to enforce controls and hold violators accountable.
Review by the California chip manufacturer in early February 2024 failed to verify an end user in Thailand, and the October 2023 purchase ultimately did not complete. But investigators say the defendants persisted, with an April 2024 attempt to order another 500 servers from the same vendor, again including export-controlled chips and accompanied by an End User Certification claiming a Thailand-based company as the buyer; that effort also failed.
Investigators recovered text messages and group chats that they say show awareness of the true destination and steps to mask it. In a June 2023 group chat titled “GPU Partnership,” Kelly wrote, “They just need more details about your company, customers, revenue, etc.” English replied, “I’m not breaking my back. I fake these weeks ago.” Later, Kelly drafted a solicitation that referenced customers in China as a lucrative opportunity and Zheng warned: “DO NOT MENTION ANYTHING ABOUT CHINA.” Zheng added that mentioning China would “draw attention[] from US government for embargo[] violation” and later cautioned, “We just talk about it, no one can hold it as evidence[] against us.”
The criminal complaints were filed in the Northern District of Georgia on March 20, 2026. The charges in those complaints are accusations; the defendants are presumed innocent unless proven guilty. The case is being investigated by the Department of Commerce’s Bureau of Industry & Security, the Defense Criminal Investigative Service, Homeland Security Investigations, and the Federal Bureau of Investigation, and is being prosecuted by the U.S. Attorney’s Office for the Northern District of Georgia and the National Security Division’s Counterintelligence and Export Control Section.
