Stanley Yi Zheng, Matthew Kelly, and Tommy Shad English are facing charges for conspiracy to commit smuggling and export control violations. The trio allegedly attempted to acquire millions of dollars' worth of export-controlled computer chips from a California-based company to be illicitly shipped to China via Thailand.
According to officials, the defendants conspired to sell American-made AI computer chips to Chinese buyers in violation of U.S. export controls. This case underscores the ongoing efforts to safeguard U.S. technological innovation and prevent unauthorized exports of critical technology.
The U.S. Attorney for the Northern District of Georgia emphasized the importance of preventing sensitive technology from falling into the wrong hands, highlighting the significance of national security and competitiveness in a global context.
A Special Agent-in-Charge from the Department of Defense emphasized that safeguarding defense technology from being diverted to foreign adversaries is a top priority, particularly in the realm of military artificial intelligence and national defense capabilities.
Another official stressed the critical role of partnerships between law enforcement, industry, and international entities in preventing the illegal export of sensitive U.S. technology. The case serves as a reminder of the necessity to protect America's advanced technology for national security.
The criminal complaints state that the defendants began conspiring to obtain export-controlled computer chips in May 2023. By using the names of Thailand-based companies as purchasers, the defendants aimed to divert U.S.-origin AI chips to China, violating U.S. law.
In January 2024, English transferred over $20 million to a company as partial payment for computer servers containing export-controlled computer chips. Despite efforts to conceal the ultimate destination, the purchase was not completed due to scrutiny from the California-based manufacturer.
Subsequent attempts to order more computer servers with export-controlled chips were similarly unsuccessful. Text messages obtained during the investigation revealed the defendants' discussions about fraudulent practices and efforts to conceal their activities.
The investigation led to the arrest of Stanley Yi Zheng from Hong Kong, China, who appeared before a U.S. Magistrate Judge for his initial hearing. Matthew Kelly of New York and Tommy Shad English of Georgia surrendered to authorities and are set to appear for their initial hearings.
The charges, issued in the Northern District of Georgia, are accusations, and the defendants are presumed innocent until proven guilty. The case is being jointly investigated by several federal agencies, including the Department of Commerce, Defense Criminal Investigative Service, Homeland Security Investigations, and the FBI.
Assistant U.S. Attorney Samir Kaushal and Trial Attorney Brett Ruff are prosecuting the case, which underscores the importance of upholding export controls and safeguarding sensitive U.S. technology.