Stern said text messages obtained by authorities showed Li boasting about how his father was “engaged in similar business on behalf of the Chinese Communist Party.” Stern alleged that the messages also showed that Lee, who worked at a hardware distribution company, knew through news articles they shared that Nvidia chips were subject to export controls. Stern again cited Lee’s text messages, saying, “He explained that his father had ways to import them.”
Stern told the court that Lee “admitted to various facts” implicating him while being questioned by federal agents on Wednesday.
The defendants face various charges related to violating export control laws and up to 20 years in prison.
Ho and Raymond reportedly did not immediately respond to requests for comment sent to their respective LinkedIn accounts. Public defenders for Chen and Lee declined to comment.
Nvidia spokesman John Rizzo said in a statement that “even small sales of older generation products on the secondary market are subject to strict scrutiny and review” and that “trying to cobble together a datacenter from smuggled products is a nonstarter technically and economically.”
Corevex, an AI cloud computing business for which Raymond consulted, said in a statement that he had rescinded the job offer to join the company full-time and that it was unrelated to the alleged wrongdoing.
Earlier this year, the US Commerce Department was reportedly considering restricting the sale of advanced chips to Malaysia and Thailand in an effort to prevent chip smuggling, but the rules have not yet been finalized. The Commerce Department did not immediately respond to a request for comment.
Magistrate Judge Westmore ordered Lee to hire an attorney because he said he had significant stakes in the San Leandro, California home and other properties, making him ineligible for a public defender. The magistrate has also scheduled a hearing for Tuesday to determine whether Lee is a flight risk and should continue to be detained. He holds a US green card and Hong Kong citizenship.
Lee, wearing glasses, flip-flops and a black windbreaker, nodded but said nothing in response to some of Westmore’s statements. His temporary public defender Kaitlyn Fryzek said Lee was planning to marry a US citizen. “His incentive is to be with his fiancée and marry her,” Fryczek said.