The Department of Justice on Wednesday said two U.S. citizens and one Chinese national were charged with conspiring to commit smuggling after they illegally attempted to export cutting-edge artificial intelligence technology to China.
According to a Justice Department press release, Stanley Yi Zheng, Matthew Kelly, and Tommy Shad English are accused of conspiring to smuggle restricted AI-related technology from the United States to China without obtaining required export licenses.
The three defendants are alleged to have sought millions of dollars’ worth of export-controlled computer chips for shipment to China through Thailand.
Prosecutors allege the AI chips the accused attempted to smuggle are advanced U.S. technology and have military and strategic applications, making their unauthorized transfer a violation of U.S. export control laws.
“The cutting-edge AI chips the defendants allegedly schemed to export to China represent the best of American ingenuity and years of strategic investment in maintaining our technological leadership,” Assistant Attorney General for National Security John A. Eisenberg said.
Federal authorities allege the scheme involved coordinating shipments of controlled technology through a network of front companies and false documentation to disguise the equipment’s true destination. The two U.S. citizens are accused of purchasing the restricted technology domestically and arranging for its transfer, while concealing that the end user was based in China.
To avoid scrutiny, the defendants allegedly misrepresented export information, including the identity of the ultimate recipient, and routed shipments through intermediaries. Authorities said the conspirators took steps to make it appear as though the technology was being sent to legitimate businesses in third countries, when in reality it was intended for China.
In some instances, prosecutors say, the defendants structured transactions specifically to avoid triggering export licensing requirements or raising red flags with suppliers.
The Chinese national allegedly coordinated with the U.S.-based defendants to facilitate the transfers and ensure the technology reached its intended recipients abroad.
The charges include conspiracy, violations of the Export Control Reform Act, and smuggling goods from the U.S. If convicted, the defendants could face significant prison sentences and financial penalties.
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Assistant director of the FBI’s Counterintelligence and Espionage Division, Roman Rozhavsky, said the case underscores the importance of protecting American ingenuity as the AI race with adversaries continues.
“As our foreign adversaries escalate their efforts to dominate the field of artificial intelligence, we are seeing them employ increasingly brazen schemes to illegally acquire valuable U.S. technology,” Rozhavsky said. “Enforcing export controls is critical to our work safeguarding America’s economic and national security, and the FBI will continue working with our partners to protect our nation’s innovation and hold accountable those seeking to profit by supplying hostile nation states.”