Two Chinese nationals have been arrested in Los Angeles on charges of illegally exporting sensitive microchips used in artificial intelligence applications to China, according to the Justice Department.
Chuan Geng, 28, a lawful permanent resident living in Pasadena, and Shiwei Yang, 28, an illegal alien residing in El Monte, face accusations of violating the Export Control Reform Act. The charge carries a potential maximum sentence of 20 years in federal prison. Geng surrendered to authorities on Saturday, while Yang was arrested earlier that day.
During their initial appearance before a United States District Court magistrate judge on Monday, Geng was released on $250,000 bond. A detention hearing for Yang is scheduled for August 12. Arraignment for both defendants is set for September 11. No pleas were entered at Monday’s hearing.
The affidavit filed with the complaint alleges that from October 2022 to July 2025, Geng and Yang operated through ALX Solutions Inc., an El Monte-based company. They are accused of knowingly exporting graphic processing units (GPUs) and other sensitive technology from the United States to China without obtaining the required license or authorization from the U.S. Department of Commerce. The company was established shortly after new licensing requirements were introduced by the Commerce Department for advanced microchips.
Investigators reviewed export records and found that ALX Solutions made at least 21 shipments between December 2024 and prior dates to freight-forwarding companies in Singapore and Malaysia—countries often used as transshipment points to hide illegal exports destined for China. Payments received by ALX Solutions came not from these intermediaries but from companies based in Hong Kong and China, including a $1 million payment from a Chinese company in January 2024.
One shipment in December 2024 was falsely labeled as compliant with federal laws but contained GPUs requiring an export license for China. Neither defendant nor their company applied for or obtained such licenses.
According to information cited in the complaint, the chips involved are described as “the most powerful GPU chip on the market,” “designed specifically for AI applications,” including uses such as self-driving cars and medical diagnosis systems.
Law enforcement searched ALX Solutions’ office last week and seized phones belonging to both defendants. Authorities say they discovered communications about shipping export-controlled chips through Malaysia to avoid 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 investigation is being conducted by the Bureau of Industry and Security within the United States Department of Commerce and by the FBI.
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.
