U.S. Charges Two Men in Alleged Scheme to Smuggle Nvidia H100/H200 Chips to China

Two men have been arrested in the United States accused of orchestrating a scheme to smuggle Nvidia H100 and H200 graphics processing units (GPUs) to China, the U.S. Justice Department said. The announcement came as the White House approved exports of Nvidia’s H200 chips to Beijing.

Allegations and Details

Federal prosecutors identified the defendants as Fanyue Gong, 43, a Chinese national living in New York, and Benlin Yuan, 58, a Canadian citizen originally from China. According to court filings, both men separately conspired with employees of a Hong Kong-based logistics company and a China-based AI technology firm to evade U.S. export controls.

Prosecutors allege the defendants acquired the Nvidia chips via straw purchasers and intermediaries, falsely claiming the shipments were destined for U.S. customers or third countries such as Taiwan and Thailand. Shipments were routed to multiple U.S. warehouses where, prosecutors say, operatives removed Nvidia labels and affixed tags bearing what investigators believe was a fake company name before preparing the goods for export.

Role Of Co-Conspirators And Scope

In a separate complaint, prosecutors allege Yuan recruited and organized individuals to inspect the mislabeled GPUs on behalf of the Hong Kong logistics firm and instructed inspectors not to disclose that the goods were bound for China. He also allegedly helped craft a false explanation to recover seized equipment after federal authorities detained it.

Prosecutors say the operation — dubbed "Operation Gatekeeper" — has been active since at least November 2023. Another defendant, Alan Hao Hsu, 43, and his company pleaded guilty in October to smuggling and unlawful export activities connected to the same network. Authorities contend Hsu’s firm received over $50 million in wire transfers from China to fund the operation, which exported or attempted to export at least $160 million worth of export-controlled Nvidia chips.

"Operation Gatekeeper has exposed a sophisticated smuggling network that threatens our Nation’s security by funneling cutting-edge AI technology to those who would use it against American interests," said Nicholas J. Ganjei, U.S. attorney for the Southern District of Texas.

A Nvidia spokesperson emphasized the company’s controls over secondary-market sales, saying that while many controlled GPUs remain in use at businesses, homes and schools, Nvidia and government partners work to prevent illicit resale and that older-generation product sales on the secondary market are "subject to strict security and review."

Regulatory Context

The case comes against the backdrop of U.S. export restrictions introduced in 2022 that bar certain advanced semiconductors from China when those chips are produced with equipment incorporating U.S. technology. In September, the administration expanded the restricted list to automatically include subsidiaries that are 50% or more owned by a listed company.

The Chinese Embassy in Washington and a lawyer for Yuan did not respond to requests for comment, according to the Justice Department.