US Charges Three Individuals in AI Tech Diversion Scheme to China

Washington, D.C. – March 20, 2026 – Federal authorities have unsealed an indictment charging three individuals with conspiring to illegally divert high-performance computer servers and sophisticated U.S. Artificial intelligence technology to China, in violation of U.S. Export control laws. The charges represent a significant escalation in efforts to protect American technological advantages from unauthorized transfer to geopolitical rivals.

The Indictment and Allegations

Yih-Shyan “Wally” Liaw, a U.S. Citizen; Ruei-Tsang “Steven” Chang, a citizen of Taiwan; and Ting-Wei “Willy” Sun, a citizen of Taiwan, are accused of orchestrating a complex scheme to circumvent U.S. Export regulations. Liaw and Sun were arrested on Thursday and are expected to appear in the Northern District of California. Chang remains at large.

According to the Department of Justice, the alleged conspiracy involved the use of false documents, staged dummy servers and convoluted shipping routes to obscure the true destination of restricted AI technology – China. The scheme reportedly spanned from 2024 to 2025, with approximately $2.5 billion worth of servers being diverted. Between late April 2025 and mid-May 2025 alone, approximately $510 million worth of servers assembled in the United States were allegedly sent to China in violation of export controls.

Key Players and Their Roles

• Yih-Shyan “Wally” Liaw: A co-founder, board member, and Senior Vice President of Business Development of a U.S.-based manufacturer of high-performance computer servers for AI and cloud computing applications.
• Ruei-Tsang “Steven” Chang: A general manager in the Taiwan office of the same U.S. Manufacturer.
• Ting-Wei “Willy” Sun: A third-party broker who allegedly acted as a “fixer” to facilitate the illegal transfers.

The Scheme Unveiled

The indictment details how Liaw and Chang directed executives of a company based in Southeast Asia (“Company-1”) to place orders for servers with specific GPUs, ostensibly for Company-1’s use. These servers, often assembled in the U.S., were shipped to Taiwan and then to Company-1 in Southeast Asia. Company-1 then repackaged the servers in unmarked boxes and shipped them to China.

To mislead internal compliance teams, the defendants allegedly staged thousands of “dummy” servers – non-working replicas – for inspection, while the actual servers were already en route to China. They also used encrypted messaging applications to coordinate shipments and conceal their activities.

Government Response and National Security Implications

“The indictment unsealed today details alleged efforts to evade U.S. Export laws through false documents, staged photographs to mislead inspectors, and convoluted transshipment schemes, in order to obfuscate the true destination of restricted AI technology—China,” said John A. Eisenberg, Assistant Attorney General for National Security.

The FBI emphasized the importance of controlling the export of sensitive U.S. AI technology to safeguard national security. “Controlling the export of sensitive U.S. Artificial intelligence technology is essential to safeguarding our national security and defending the homeland,” stated Assistant Director Roman Rozhavsky of the FBI’s Counterintelligence and Espionage Division.

U.S. Attorney Jay Clayton for the Southern District of New York added that such diversion schemes generate billions of dollars in illicit profits and pose a direct threat to U.S. National security.

Company Response

Super Micro Computer Inc. Has stated that it was informed of the indictment and that the company itself is not a defendant. The company has placed Liaw and Chang on leave and terminated its relationship with Sun, who was a contractor. Shares of Super Micro Computer experienced a decline in after-hours trading following the announcement.

Potential Penalties

Each defendant faces a maximum sentence of 20 years imprisonment for conspiring to violate the Export Controls Reform Act, 5 years for conspiring to smuggle goods from the United States, and 5 years for conspiring to defraud the United States.

Disclaimer: The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.