Federal prosecutors in the United States have filed charges against three individuals accused of participating in a sophisticated scheme to move restricted, high-performance servers to China without authorization. The case, led by the U.S. Attorney’s Office for the Southern District of New York, focuses on alleged violations of export control laws designed to prevent sensitive technologies from reaching foreign adversaries.
The individuals named in the indictment—Yih-Shyan “Wally” Liaw, Ruei-Tsan “Steven” Chang, and Ting-Wei “Willy” Sun—are accused of working together to bypass U.S. restrictions and facilitate the transfer of advanced servers equipped with chips from Nvidia. These chips are widely used in artificial intelligence systems and are subject to strict export regulations.
Authorities allege that the trio knowingly circumvented these controls, allowing sensitive computing equipment to be routed to China without the required licenses under the Export Control Reform Act.
Growing Pressure Over AI Technology Flows
The case comes amid increasing scrutiny over how advanced semiconductor technology continues to reach China despite regulatory barriers. U.S. policymakers have been attempting to close gaps in enforcement as competition in artificial intelligence intensifies globally.
American AI companies such as OpenAI and Anthropic are facing mounting competition from Chinese firms like DeepSeek. This rivalry has amplified concerns about maintaining a technological edge, particularly in areas tied to national security.
At the center of this competition are high-powered graphics processing units (GPUs), especially those produced by Nvidia. These components are essential for training large-scale AI models, making them a strategic asset that governments are eager to control.
Connection to Super Micro Computer
Although the company itself has not been charged, the indictment draws connections to Super Micro Computer, a major U.S.-based server manufacturer. Liaw, one of the accused, is identified as a co-founder and a member of the company’s board, as well as its senior vice president of business development.
Following the public release of the charges, shares of the company fell sharply in after-hours trading, reflecting investor unease about potential reputational damage.
In response, the company clarified that it is not a defendant in the case. It also confirmed that it has taken internal action, placing Liaw and Chang on leave and ending its relationship with Sun. The company emphasized that the alleged conduct runs counter to its internal compliance policies and reiterated its commitment to following U.S. export regulations.
Alleged Use of Intermediaries to Mask Shipments
Prosecutors claim the accused relied on a Southeast Asian intermediary firm to disguise the true destination of the servers. According to the indictment, this company generated false documentation suggesting that the hardware would remain within its own facilities, when in reality the equipment was being redirected to China.
To further obscure the operation, another logistics provider allegedly repackaged the servers, removing identifying details that could reveal their origin or intended destination.
One of the more striking elements of the case involves the use of “dummy” servers. These were reportedly placed in warehouses to create the illusion that shipments were compliant with export rules. Meanwhile, the actual servers had already been sent onward to China.
Investigators say these decoy systems were even presented during inspections, including visits by U.S. officials, in an effort to avoid raising suspicion.
Billions of Dollars in Question
The alleged operation is believed to have generated substantial revenue. Prosecutors estimate that approximately $2.5 billion worth of servers were sold through the scheme since 2024.
A particularly large volume—around $510 million—was reportedly routed through the intermediary company over a short period between April and May 2025. Authorities stress that these transactions were carried out without the necessary approvals from the U.S. Department of Commerce, making them unlawful under existing export control rules.
Efforts to Influence Oversight and Audits
The indictment also outlines attempts to interfere with compliance checks. Chang is accused of limiting access for auditors to certain parts of data centers where the servers were supposedly stored.
In addition, he allegedly sought to influence the audit process by arranging for a reviewer he considered favorable. These claims come in the wake of changes in the company’s auditing arrangements, with Ernst & Young stepping down in 2024 and BDO taking over as auditor.
Policy Shifts Add Complexity
The case unfolds during a period of shifting U.S. policy on semiconductor exports to China. Under Donald Trump, the U.S. initially imposed strict limits on the sale of advanced AI chips to Chinese buyers. However, there have been instances where certain products were allowed under controlled conditions.
Nvidia has continued to navigate these rules, securing licenses for specific chip exports while maintaining compliance with government requirements. Even so, restrictions remain tight, particularly for newer and more powerful technologies.
Prosecutors allege that Liaw encouraged the intermediary company to adopt more advanced chips, including models based on Nvidia’s latest architecture, in an effort to expand the scale of shipments.
Communication Suggests Urgency
Court filings include messages that investigators say highlight the urgency behind the operation. In these communications, Liaw allegedly sought projections for future shipments, indicating a push to secure supply and accelerate deliveries.
Other messages suggest awareness of tightening regulations, with references to upcoming policy changes and the need to move products quickly before new restrictions took effect.
Authorities have confirmed that Liaw and Sun have been taken into custody. Chang, however, has not yet been apprehended and is considered a fugitive.
The case is being closely watched as an example of how difficult it can be to enforce export controls in a globalized technology supply chain. The use of intermediaries, falsified records, and complex logistics networks can make it challenging for regulators to track the movement of sensitive equipment.
