Federal prosecutors in Houston on Monday announced initial results of Operation Gatekeeper.
The operation targets illegal efforts to export advanced U.S. technology, particularly high-end computer chips, to foreign nations.
U.S. Attorney Nicholas J. Ganjei provided insight on the coordinated federal initiative led by the Southern District of Texas, the Department of Commerce’s Bureau of Industry and Security, the Department of Justice’s Counterintelligence and Export Control Section, Homeland Security Investigations and the FBI.
"The Southern District of Texas will find each and every person our business working to legally export is critical technology to our strategic competitors. We will be relentless in finding them. That is what Operation Gatekeeper is for. The stakes are high. The country that controls these chips will dominate AI. The country that dominates AI will lead the future," Ganjei said.
Ganjei announced guilty pleas from a Houston-area technology firm and its owner, accused of trying to illegally export more than $160 million in advanced computer chips to China — the first prosecution under a new initiative targeting the underground smuggling of U.S. technology. He said the case marks the first-ever conviction for what officials are calling “AI diversion” — the illegal export of powerful chips used to train artificial intelligence systems capable of military applications.
Officials said the Sugar Land-based company and its owner were conspiring to send $160 million worth of Nvidia H100 and H200 high-performance GPUs to China and Hong Kong. They said the chips are critical for artificial intelligence and military applications. The processors have the capability of being used for direct military applications, such as designing weapons, operating drones and analyzing intelligence data.
Alan Hao Hsu, aka Haochun Hsu, reached a plea agreement and pleaded guilty to smuggling and unlawful export activities using his company, Hao Global, which is no longer operational.
"AI, I think, has the potential to affect literally every scientific field, every field of study. It’ll touch upon economic concerns, military concerns, so I would prefer that the United States be the leader in AI technology. I would strongly prefer that, and if somebody is illegally undermining that by sending these overseas, my office and I, myself, are very, very concerned about that," Ganjei said.
Ganjei said Hsu allegedly used false shipping documents, disguising GPUs as “adapter modules” and “computer servers.” He said the company was basically a shell company, and it funded more than $50 million in transfers from China and Hong Kong. Authorities seized millions of dollars’ worth of GPUs and prevented roughly $100 million more from leaving the country.
Two other men, Fanyue Gong, aka Tom, of Brooklyn, and Benlin Yuan, a Canadian citizen and executive at a Virginia-based subsidiary of a Beijing technology firm, were arrested for related offenses. Gong allegedly led relabeling operations to disguise shipments and directed workers—mostly Chinese nationals—to misclassify exports. An undercover agent witnessed these acts, leading to the seizure of over $30 million in GPUs. Wan allegedly helped organize inspection and export logistics for mislabeled GPUs tied to the same Hong Kong-based logistics company.
Hsu was permitted to remain on bond pending sentencing. Yuan and Gong are currently in custody pending further criminal proceedings.
Hsu faces up to 10 years in federal prison at sentencing Feb. 18, while Hao Global LLC could be fined up to twice the gross gain from the offense and given a term of probation.
If convicted, Yuan faces up to 20 years for conspiracy to violate the Export Control Reform Act. Gong is charged with conspiracy to smuggle goods from the United States and faces a maximum of 10 years.
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