Two Chinese Nationals Charged in Scheme to Illegally Export AI Microchips to China; DOJ Also Launches New ‘Russiagate’ Grand Jury Probe

Two Chinese nationals have been arrested and charged with federal crimes after allegedly orchestrating a sophisticated scheme to unlawfully export highly sensitive U.S. microchips—designed for artificial intelligence (AI) applications—to China. The U.S. Department of Justice announced the charges in a statement on Tuesday, citing serious national security implications tied to the illegal export of cutting-edge technology.

According to the DOJ, 28-year-old Chuan Geng of Pasadena and Shiwei Yang, also 28, of El Monte, are accused of violating the Export Control Reform Act, a serious felony that carries a potential sentence of up to 20 years in federal prison. Yang was arrested on Saturday, while Geng voluntarily surrendered to federal authorities the same day.

Federal investigators allege that the two operated through a California-based company they founded, ALX Solutions Inc., which was used as a front to traffic restricted technology—specifically graphic processing units (GPUs). These chips are crucial for AI development and are subject to strict export controls, particularly concerning exports to China.

High-Powered Chips Illegally Routed Overseas

As detailed in the affidavit supporting the criminal complaint, the pair is accused of deliberately circumventing export regulations by routing shipments of sensitive microchips through third-party countries. At least 21 shipments, including one as recent as December 2024, were allegedly sent from the United States to freight-forwarding companies in Singapore and Malaysia—nations frequently used as intermediary stops to obscure the final destination of goods heading to mainland China.

Despite ALX Solutions listing specific foreign recipients on export documents, prosecutors say the company never received payments from those businesses. Instead, bank records revealed large financial transactions flowing from companies in China and Hong Kong, including a $1 million payment in January 2024 from a Chinese firm. This discrepancy raised red flags for federal investigators, who claim the transaction patterns were consistent with efforts to bypass U.S. export restrictions.

False Documentation and Covert Messaging

One of the more damning claims in the DOJ complaint involves ALX Solutions allegedly submitting false export paperwork. In one case, the company declared it was shipping non-restricted items, when in fact it was exporting powerful AI-enabled GPUs—components that the U.S. Department of Commerce classifies as requiring a license for export to China.

Further evidence emerged last week when federal agents executed a search warrant at ALX Solutions’ office in El Monte, California. Authorities seized mobile phones belonging to both Geng and Yang. The devices reportedly contained incriminating messages between the two, discussing how to avoid U.S. detection by first rerouting shipments through Malaysia before reaching Chinese buyers.

The DOJ emphasized that the chips involved are among the most advanced GPU models currently available and are “designed specifically for AI applications” such as autonomous driving systems, diagnostic medical AI, and next-generation surveillance technologies. The manufacturer of the chips was not named but was described only as a “leading producer of high-performance AI chips.”

Broader National Security Concerns

This case marks another high-profile DOJ effort to curb the unauthorized export of critical U.S. technologies, particularly those with potential military or surveillance uses by foreign adversaries. The U.S. government has increasingly moved to tighten export controls amid rising geopolitical tensions with China over emerging technologies like AI and quantum computing.

The Commerce Department recently implemented stricter export licensing requirements for such chips to prevent unauthorized foreign access—especially by Chinese military-linked organizations. ALX Solutions was reportedly founded shortly after those new rules were introduced, raising further suspicion about the company’s intent.

Grand Jury Convened Over Alleged Russiagate Conspiracy

In a separate but equally explosive development, the Department of Justice is also launching a new grand jury investigation tied to the long-standing controversy surrounding the 2016 Trump-Russia collusion allegations.

Earlier this week, Attorney General Pam Bondi signed an order authorizing a federal prosecutor to present evidence to a grand jury regarding an alleged criminal conspiracy involving intelligence officials under the Obama administration. The case is rooted in declassified documents suggesting that members of the intelligence community may have participated in a politically motivated effort to link then-candidate Donald Trump to the Russian government.

The new probe follows criminal referrals issued by Director of National Intelligence Tulsi Gabbard and CIA Director John Ratcliffe, both of whom cited potential wrongdoing during the origins of the so-called “Russiagate” investigation. The referrals accuse intelligence officials of collaborating with the 2016 Clinton campaign to push a disinformation campaign against Trump.

Fox News was the first to report on the grand jury order, with correspondent David Spunt stating that the investigation is being taken “very seriously” by Attorney General Bondi.

While the DOJ has not publicly confirmed the scope of the inquiry, a source familiar with the matter said that the one-page order signed by Bondi is already in the hands of the assigned federal prosecutor.

What’s Next?

As the Biden administration navigates the fallout from both national security threats and politically charged investigations, these two cases highlight the broad scope of challenges currently facing U.S. law enforcement and intelligence communities.

From illegal tech exports to adversarial nations to potential abuse of government power in politically sensitive investigations, the Justice Department appears to be pursuing a multi-pronged strategy to enforce the rule of law and protect national interests at home and abroad.