Four men have been indicted on federal criminal charges related to the export scheme. Nvidia Court documents show millions of dollars worth of tips are being sent to China and Hong Kong in violation of strict U.S. regulations.
One of the defendants, Brian Curtis Raymond, 46, of Huntsville, Alabama, was identified last week as the chief technology officer of a Virginia artificial intelligence cloud company that announced plans to merge to allow its stock to be traded publicly.
The company told CNBC it was not involved in the incident and that his job offer had been rescinded.
Mr. Raymond and three other defendants, all born in China or Hong Kong, are charged with conspiracy to violate the Export Administration Reform Act of 2018 in connection with the export and attempted export of NVIDIA chips to end users in China and Hong Kong, after initially shipping the chips to Malaysia and Thailand.
According to the indictment, the defendants did not have a license or authorization from the Department of Commerce for such exports.
The chips sent to China as part of the alleged scheme that began in September 2023 included Nvidia’s A100 and H200 graphics processing units; hewlett packard enterprise According to the indictment filed Nov. 13 in U.S. District Court in Tampa, Florida.
Because the chips are used for artificial intelligence and supercomputing applications, exports are severely restricted, the indictment states.
The indictment was first reported by Courtwatch, a court document aggregation news site founded by counterterrorism researcher Seamus Hughes.
The indictment states that China is “rapidly developing exascale supercomputing capabilities and has announced its intention to become the world leader in AI by 2030.”
“These capabilities are used by the People’s Republic of China (PRC) in its military modernization efforts and in connection with China’s weapons design and testing, including weapons and mass destruction,” the indictment states.
According to the indictment, Raymond operated a technology products sales company in Huntsville that was “licensed to sell Nvidia GPUs (graphics processing units), among other products.”
Raymond’s LinkedIn page states that his company, Bitworks, is or has been an “Nvidia cloud partner offering H100, H200, and upcoming Blackwell/NVL72 clusters to customers.”
Raymond and Matthew Ho, another co-defendant in the case, “caused cargo shipments to transport NVIDIA GPU chips to third countries knowing that the GPUs were ultimately destined for and would be transshipped to the People’s Republic of China,” the indictment alleges.
Mr. Ho is a 34-year-old Hong Kong-born American citizen living in Florida. He is also known as Hong Ning Ho.
Ho was a registered agent for a Tampa company called Janford Realtor, which, despite its name, was not involved in any real estate transactions and instead “acted as an intermediary for several illegal and unauthorized exports” of highly controlled and sophisticated chips to China, the indictment says.
According to the indictment, as part of the alleged conspiracy, Ho and Raymond planned to submit shipping documents that contained false information about the final guarantor of the chips, the value of the chips, and the licenses required for export.
Raymond did not respond to requests for comment. His wife declined to comment.
Raymond’s lawyer, Tay Lee, declined to comment on the charges. Lee also declined to say where Raymond is now or whether he has been arrested.
On Nov. 10, three days before he was indicted in Tampa, Raymond was named chief technology officer in a press release issued by Corvex, an Arlington, Virginia-based AI cloud company.
The press release states that Corvex and Movano Healtha publicly traded company that sells medical wearables, had agreed to a merger that would allow Corvex to go public.
“Corvex is not involved in the activities cited in the Justice Department’s indictment,” a Corvex spokesperson said in a statement to CNBC when asked about Raymond.
“The individual is not an employee of Corvex. He was previously a consultant to the company and was transitioning to an employee role, but his offer has been rescinded,” the spokesperson said.
In addition to the top conspiracy charge, Raymond is charged with two counts of violating the Export Control Reform Act in connection with an attempt to export 50 Nvidia H200 GPUs to China via Thailand earlier this year, and an attempt to export approximately 10 HP supercomputers equipped with Nvidia H100 GPUs to China via Thailand earlier this year.
He is also charged with smuggling goods from the United States in connection with the attempted export of 50 Nvidia H200 chips.
Raymond is also charged with seven counts of money laundering related to wire transfers totaling more than $3.4 million from a Chinese company’s bank account to Raymond’s company’s bank account in Huntsville and Janford Realtor.
Ho and two other defendants in the case, Jing Cheng and Chum Li, were all arrested in recent days, according to court documents.
As part of the alleged conspiracy, the three men planned to identify Chinese customers who wanted to buy Nvidia chips, according to the indictment.
Chen, 45, also known as Ho and Harry Chen, was arrested in Tampa. They are being held without bail.
In addition to the conspiracy charge, Mr. Ho is also charged with nine counts of money laundering in connection with wire transfers of $4 million from a Chinese company’s bank account to Janford Realtor and Mr. Raymond’s companies.
He is also charged with four counts of violating the Export Control Reform Act and three counts of smuggling.
Ho’s lawyer, Samuel Williams, declined to comment on the matter.
Chen is a Chinese national who entered the United States on a student visa and lives in Tampa.
He is charged with conspiracy, one count of violating ECRA, and one count of smuggling.
Information about Mr. Chen’s lawyer has not been made public.
Mr. Lee, also known as Tony Lee, was arrested in California and was scheduled to appear in Oakland federal court on Thursday. Information about Lee’s lawyer was not available.
Li, a Chinese national living in California, is identified as the owner of Janford Realtor, according to the indictment.
He is charged with one count each of conspiracy, violation of ECRA, and smuggling.
— CNBC’s Samantha Subin contributed to this article.
