Federal agents in LA have apparently busted this smuggling network—pretty wild stuff. Picture this: two young guys running the whole show out of a bland office in some strip mall in El Monte. Honestly, it’s like something out of a crime drama, right? But it’s real life.
So, they say this company, ALX Solutions Inc., popped up just after some big chip export rules changed in late 2022. And what happened next is something—21 shipments headed out, often through Singapore or Malaysia. They called the cargo “video cards” to dodge paperwork. But, oh no, routine check-ups blew that cover when customs found boxes full of high-end graphics accelerators… just marked as “computer parts.” Smooth move, guys.
Get this: a million-dollar bank transfer from a lone Hong Kong buyer, with extra funds dripping in from mainland groups linked to defense. I’m scratching my head here—how bold were these guys? Also, investigators nabbed Signal chats where Chuan Geng, one of the founders, told his partner, Shiwei Yang, to keep things sneaky—switch up labels, don’t repeat forwarders. Sneaky, but not sneaky enough.
Anyway—wait, no, back to those regulations! Ok, yeah, there’s this rule from the Bureau of Industry and Security. China can’t get chips capable of supercomputing tasks unless they get a special license. There’s some techy stuff about how these chips work, and they’re kinda crucial for military AI. It’s all about bandwidth, if that makes sense.
So, ALX got busted in December. Customs snagged a pallet and a serial number pinged Nvidia’s partner database. And then there was this late-night tailing session with a van going from the port to ALX’s warehouse. Classic stakeout thing, right? Agents found empty trays for GPUs worth, like, $25 million. Mind-blowing. And, there were packing slips for some baby AI company in Shenzhen. Go figure.
Geng, who’s legally here, handed himself in calmly. Yang, though, got nabbed with a one-way ticket to Taipei. Talk about a dramatic exit. Geng’s out on a $250,000 bond, but Yang’s stuck till his hearing on August 12. They’re facing up to 20 years if convicted under the Export Control Reform Act—serious business.
The FBI called it “classic transshipment with modern flair,” which… yeah, sums it up. Plus, BIS wants to hit them with civil penalties and maybe ban them from exporting forever. Ouch.
It’s funny—public records show Geng was some finance guy for a failed e-commerce gig, and Yang once ran a sneaker forwarding service. Sounds like neither had a tech background, which maybe backs up the claim that ALX was just about getting those chips to China.
But it’s not over yet. The prosecutors need an indictment, and the defense is saying the chips just snuck under the performance radar. A whole courtroom showdown about tech specs and firmware—oh joy. We might see this trial by spring 2026, and I bet it’ll be a spectacle about how to crack down on silicon smuggling in our AI-obsessed world. Can’t wait to see how that unfolds.
