Asger Risom
Federal authorities have charged four men in what prosecutors describe as a sophisticated black-market pipeline.
Federal authorities have charged four men in what prosecutors describe as a sophisticated black-market pipeline funneling advanced Nvidia chips out of the United States and into China, despite export controls meant to keep high-end AI hardware out of foreign military programs.
The indictment, unsealed Thursday, accuses the group of quietly moving hundreds of restricted GPUs through a network of shell companies, overseas shipping routes and third-party distributors. Investigators say the operation stretched from Alabama to Malaysia and Thailand before the hardware ultimately reached buyers in China.
Chips allegedly sought for weapons work and surveillance
According to the Justice Department, the GPUs were destined for entities connected to China’s military research efforts. Prosecutors say the hardware could have supported weapons design and testing, including work related to weapons of mass destruction, as well as AI-based surveillance systems. Those are the exact uses that prompted the Commerce Department to impose strict export controls on Nvidia’s A100, H100, H200 and other advanced accelerators in 2022.
U.S. Attorney Gregory W. Kehoe said the case reflects the government’s determination to prevent sensitive American technologies from being diverted into foreign defense programs.
Who was charged
The four defendants arrested this week are Hon Ning “Matthew” Ho, a U.S. citizen living in Tampa; Brian Curtis Raymond of Huntsville, Alabama; Cham “Tony” Li, originally from China and now living in California; and Jing Chen, a Chinese national living in Tampa on a student visa. They were taken into custody in separate operations across Florida, Alabama and California and made their initial court appearances on Wednesday and Thursday.
How the alleged smuggling network operated
Prosecutors say the center of the scheme was Janford Realtor LLC, a Tampa-based shell company controlled by Ho and Li. Despite its branding, Janford never conducted real-estate business. Instead, investigators say it served as a purchasing and logistics front that allowed the group to place orders and route shipments without drawing attention.
According to the indictment, the defendants found buyers in China who wanted restricted Nvidia GPUs, then used Janford and another unnamed U.S. business to buy the chips from American vendors. Raymond, who was the chief executive of an Alabama electronics distributor licensed to sell Nvidia hardware, allegedly supplied some of the GPUs. Authorities say the shipments were sent to Malaysia and Thailand before being forwarded to China to avoid U.S. export-control checks.
Investigators believe the group successfully moved two large GPU exports, including roughly 400 Nvidia A100 accelerators shipped between October 2024 and January 2025. They halted later attempts, which included ten Hewlett Packard Enterprise supercomputers loaded with Nvidia’s H100 chips and an additional 50 H200 GPUs hidden among hardware crates.
Business fallout
Raymond identified himself online as the founder of Bitworks, a business claiming to deliver AI infrastructure built on Nvidia systems. He also recently listed himself on LinkedIn as the chief technology officer of Corvex, an AI cloud firm that is preparing to go public through a merger. Corvex said in a statement that he was only a consultant, that he was not an employee and that a planned transition into a full-time role had been canceled after the charges surfaced.
Potential penalties and industry context
Each defendant could face up to 20 years in prison for violating export rules, another 10 years for smuggling, and up to 20 years for every count of money laundering.
The case lands as Nvidia’s business in China has deteriorated sharply under U.S. restrictions. The company’s chief financial officer, Colette Kress, told analysts this week that geopolitical pressure has caused Chinese purchase orders to dry up, although Nvidia continues to lobby for access to the market.
Sources: Department of Justice, Fortune
