# Chasing the Chip Smugglers

_Friday, June 26, 2026 at 8:25 PM EDT · Policy · Latest · Tier 2 — Notable_

![Chasing the Chip Smugglers — Primary](https://www.thewirechina.com/wp-content/uploads/2026/02/Nvidia-Chip-Cover-Smuggling-Story-scaled.jpg)

Department of Justice officials announced they had broken up a smuggling ring that had illegally exported or attempted to export at least 160 million dollars worth of advanced Nvidia AI chips to China. Many of the chips were the H200 model that the government was now allowing to be shipped legally. The announcement came the same day last December that President Donald Trump said Washington would permit sales of those chips to China.

Prosecutors charged two men, Fanyue Gong and Benlin Yuan, who have pleaded not guilty and face trial in Houston. A third man, Alan Hao Hsu, has entered a guilty plea. Court documents identify the Chinese company that sought to acquire many of the chips as linked to Fortune Global.

The scheme began in October 2024 and unfolded over eight months. Hsu used a Houston-based shell company called Hao Global LLC to buy the chips from Lenovo. Hao Global was paid by two unnamed Chinese companies through intermediaries in Thailand, Singapore, Malaysia, China and Taiwan.

In one transaction, Hao Global acquired 60 H100 baseboards from Lenovo for 10.8 million dollars. The shipment went from North Carolina to New York, then Singapore and Hong Kong. A later order worth 55.6 million dollars was intercepted in Atlanta.

Gong organized the relabeling of chips at New York area warehouses with fake labels reading SANDKYAN. The operation sought to smuggle around 7,000 chips in total.

## Sources

- [The Wire China](https://www.thewirechina.com/2026/03/01/chasing-the-chip-smugglers-nvidia-ai-chips-china/)

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Retrieved: 2026-06-27T04:58:30.048Z
Publisher: Tech & Business (techandbusiness.org)