Federal prosecutors have charged four people with illegally smuggling Nvidia GPUs and HP supercomputers with Nvidia GPUs from the US to China, according to a court filing that has been seen. court watchThe US government has imposed sanctions that prevent Nvidia from selling its most powerful chips for AI training to China, but Chinese companies like DeepSeek have still created competitive AI models, After DeepSeek released its R1 model earlier this year, Scalex CEO Alexander Wang said he thinks that despite export controls, China has more of Nvidia’s H100 AI chips than people think, and operations like this may help explain how,
Nvidia, which on Wednesday reported quarterly earnings of record $57 billion in revenue.
According to the documents, only one person has been arrested so far, while four face charges including smuggling, conspiracy and money laundering. The four men charged – Matthew Ho, Brian Curtis Raymond, Tony Lee and Harry Chen – allegedly conspired to export GPUs starting in late 2023, which included shipping 50 of Nvidia’s coveted H200 GPUs and several batches of earlier H100 GPUs without a license.
The filing explains that part of the scheme was an alleged front company called Genford Realtors, LLC:
Despite its name, Jenford Realtor, LLC was never involved in any real estate transactions. Instead, the Company acted as an intermediary for numerous illegal and unlicensed exports to the People’s Republic of China (“PRC”) of advanced and highly-controlled U.S.-origin graphics processing units (“GPUs”) with artificial intelligence (“AI”) and supercomputing applications.
Ho, a US citizen, was the company’s registered agent, and Li, a Chinese citizen, was identified as the company’s manager.
Brian Curtis Raymond of Huntsville, Alabama, is listed in the filing as the CEO and sole owner of “US Company 1,” which was paid about $2 million by Genford Realtors. On his LinkedIn, Raymond says he is the CEO of Bitworks, which he describes as an AI infrastructure company that “provides sales and support for Nvidia and AMD solutions,” and said in another post that he was recently hired as CTO for Corevex, another AI cloud computing company. Ho and other co-conspirators purchased GPUs from vendors including Raymond and his company using funds sent via wire transfer from bank accounts in China, while using fake shipping papers and contracts to avoid export controls.
“The export system is rigorous and comprehensive,” Nvidia spokesman John Rizzo said in a statement. The Verge“Even small sales of older generation products on the secondary market are subject to strict scrutiny and review, Trying to piece together datacenters from smuggled products is a non-starter technically and economically, Datacenters are large and complex systems, making any smuggling extremely difficult and risky, and we do not provide any support or repairs for contraband products,”