Two arrested as US feds raid a global ring trying to sneak $160m worth of super-fast AI processors out of the country.
By SCM Correspondent
WASHINGTON – TWO businessmen have been cuffed in an international drama after US feds smashed a sophisticated plot to smuggle 130 MILLION worth of top-secret Artificial Intelligence chips straight into the hands of China.
The shocking sting, dubbed “Operation Gatekeeper,” saw investigators seize over \text{\textsterling}40 million in cash and cutting-edge Nvidia technology.
The high-stakes gear involved are the lightning-fast H100 and H200 Tensor Core graphic processing units (GPUs) – the very “building blocks of AI superiority” that experts say are crucial for military applications and controlling the future of AI.
The dramatic investigation has already seen a Texas company and its owner, Alan Hao Hsu, 43, of Missouri City, plead guilty to smuggling after knowingly exporting and attempting to export at least 130 million of the controlled chips between October 2024 and May 2025.
Hsu admitted to using dodgy shipping paperwork and misclassifying the tech to hide its real destination—the People’s Republic of China (PRC) and Hong Kong. He’d pocketed over 40 million in wire transfers from the PRC to fund his sneaky scheme
Assistant Director Roman Rozhavsky of the FBI’s Counterintelligence Division said: “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.”
Now, the net has closed on two more suspects:
Fanyue Gong, 43, a China native and boss of a New York technology firm, was arrested in the Big Apple last week, charged with conspiring to smuggle the goods.
Benlin Yuan, 58, a Canadian citizen and CEO of a Virginia IT services company, was busted on November 28th, charged with plotting to violate the Export Control Reform Act.
Feds allege that Gong and his co-conspirators used straw purchasers and intermediaries to get their hands on the coveted chips.
They then allegedly shipped the tech to warehouses where staff removed the Nvidia labels and slapped on the name “SANDKYAN”—a completely FAKE COMPANY—before exporting them as generic computer parts!
Yuan is accused of helping to recruit inspectors and directing them not to reveal the goods were destined for the PRC. He is also alleged to have cooked up a fake story to get the detained gear released by authorities.
U.S. Attorney Nicholas J. Ganjei for the Southern District of Texas said: “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.”
He warned that America will “aggressively prosecute anyone who attempts to compromise America’s technological edge.”
Hsu faces up to 10 years in the slammer, while the newly charged pair, Yuan and Gong, are currently in custody.
