Citing export controls that take effect in 2022, the indictment said the US is trying to disrupt China’s plans to build exascale supercomputers for military and surveillance uses. “These capabilities are being used by the PRC in connection with its military modernization efforts and the PRC’s design and testing of weapons, including weapons of mass destruction, as well as in connection with the PRC’s development and deployment of advanced AI surveillance tools,” the indictment said.
The Justice Department said the conspirators used the Florida-based company Jenford Realtor, LLC, which despite its name was not involved in real estate, “to purchase and then illegally export controlled GPUs to the PRC.” Ho and Li owned and controlled Genford Realtors, the Justice Department said, while Raymond operated an Alabama-based electronics company that “supplied Nvidia GPUs to Ho and others for illegal export to the PRC.”
Kickback, Money Laundering
The indictment says the conspirators paid each other “bribes” or commissions on the sales and exports of Nvidia chips. The indictment says the money laundering charges involve a series of transfers from two Chinese companies to Jenford Realtors and an Alabama Electronics company. The indictment lists nine wire transfers ranging from $237,248 to $1,150,000.
Raymond was reportedly released on bond, while the other three alleged conspirators are being detained. “This is an extremely serious crime. At the time these were being exported, these were Nvidia’s most advanced chips,” US prosecutor Noah Stern told a magistrate judge in Oakland, California yesterday, according to Wired.
Stein also told the court that “text messages obtained by authorities showed Li boasting about how his father ‘engaged in similar business on behalf of the Chinese Communist Party,'” Wired reports. Stern said that in the messages, Lee “explained that his father had ways to import Nvidia chips despite US export controls”.