LOS ANGELES
Two Chinese nationals, including one in the U.S. illegally, have been arrested on federal charges of illegally exporting sensitive AI-related microchips to China, the Justice Department announced Tuesday.
Chuan Geng, 28, of Pasadena, and Shiwei Yang, 28, of El Monte, are charged under the Export Control Reform Act, which carries a maximum sentence of 20 years in federal prison.
Geng, a lawful permanent resident, surrendered Saturday and was released on a $250,000 bond.
Defendants are presumed innocent unless proven guilty.
Yang, who overstayed her visa, was arrested the same day. Her detention hearing is set for August 12, and both are scheduled for arraignment on September 11.
According to the criminal complaint, the pair ran ALX Solutions Inc., based in El Monte.
From October 2022 to July 2025, they allegedly exported high-performance graphic processing units (GPUs)—used in AI systems such as self-driving cars and medical diagnostics—without a required license from the U.S. Department of Commerce.
ALX was founded shortly after new licensing rules took effect for sensitive microchips.
Records show the company shipped to Singapore and Malaysia, known transshipment hubs for evading U.S. export controls, according to authorities.
Despite claiming to export to these countries, ALX received payments from entities in China and Hong Kong, including a $1 million payment in January 2024 from a Chinese firm.
One December 2024 shipment falsely claimed to comply with federal export laws, but contained chips requiring special export licenses. Neither Geng nor Yang applied for one, officials stated.
Last week, federal agents seized the defendants’ phones during a search of ALX’s office. Investigators found incriminating messages discussing efforts to funnel restricted chips through Malaysia to China, skirting U.S. export regulations.
The FBI and the Commerce Department’s Bureau of Industry and Security are investigating, officials stated.