Two Chinese Nationals Arrested on Federal Complaint Alleging They Illegally Shipped to China Sensitive Microchips Used in AI Applications

LOS ANGELES – Two Chinese nationals – one of them an illegal alien – have been arrested on a federal criminal complaint alleging they knowingly exported to China tens of millions of dollars’ worth of sensitive microchips used in artificial intelligence (AI) applications, the Justice Department announced today.

Chuan Geng, 28, of Pasadena, and Shiwei Yang, 28, of El Monte, are charged with violating the Export Control Reform Act, a felony that carries a statutory maximum sentence of 20 years in federal prison. Geng surrendered to federal authorities on Saturday. Yang was arrested earlier that day.

At their initial appearance late Monday in United States District Court in Los Angeles, a federal magistrate judge ordered Geng released on $250,000 bond and scheduled an August 12 detention hearing for Yang. Arraignment is scheduled for September 11. No pleas were taken Monday.

Geng is a lawful permanent resident. Yang is an illegal alien who overstayed her visa.

According to an affidavit filed with the complaint, from October 2022 to July 2025, the defendants – through their El Monte-based company, ALX Solutions Inc. – knowingly and willfully exported from the United States to China sensitive technology, including graphic processing units (GPUs) – specialized computer parts used for modern computing – without first obtaining the required license or authorization from the U.S. Department of Commerce. According to the complaint, ALX Solutions Inc. was founded shortly after the Commerce Department began requiring licenses for the advanced microchips that Yang and Geng are alleged to have illegally exported. 

A review of export records, business records, and company websites indicates that a December 2024 shipment and at least 20 previous shipments by ALX Solutions involved exports from the U.S. to shipping and freight-forwarding companies in Singapore and Malaysia, which commonly are used as transshipment points to conceal illegal shipments to China.

ALX Solutions has not received payments from the entities to which they purportedly exported goods. Instead, ALX Solutions received numerous payments from companies based in Hong Kong and China, including a $1 million payment from a China-based company in January 2024. 

For example, in December 2024, ALX Solutions sent a shipment that falsely labeled that it was sending GPUs subject to federal laws and regulations. In fact, the shipment contained GPUs that required a license for export to China. Neither the defendants nor their company applied for, nor did they obtain a license from the Commerce Department.

According to the complaint and public information, the chip – made by a manufacturer of high-performance AI chips – is the “most powerful GPU chip on the market,” and is “designed specifically for AI applications,” such as “to develop self-driving cars, medical diagnosis systems, and other AI-powered applications.”

Last week, law enforcement searched ALX Solutions’ office and seized the phones belonging to Geng and Yang that revealed incriminating communications between the defendants, including communications about shipping export-controlled chips to China through Malaysia to evade U.S. export laws.

A complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.

The United States Department of Commerce’s Bureau of Industry and Security and the FBI are investigating this matter. 

Assistant United States Attorney Colin S. Scott, Joseph Guzman, and Jenna Long of the Terrorism and Export Crimes Section are prosecuting this case with assistance from Trial Attorney Chantelle Dial from the Counterintelligence and Export Control Section of the National Security Division.