United States Attorney for the Southern District of New York, Jay Clayton, announced on Mar. 19 the unsealing of an indictment charging Yih-Shyan “Wally” Liaw, Ruei-Tsang “Steven” Chang, and Ting-Wei “Willy” Sun with conspiring to unlawfully divert high-performance computer servers containing advanced U.S. artificial intelligence technology to China in violation of export control laws. Liaw, a U.S. citizen, and Sun, a citizen of Taiwan, were arrested and presented in the Northern District of California; Chang remains a fugitive.
The case highlights concerns about national security risks posed by unauthorized transfers of sensitive technology abroad. The indictment alleges that the defendants used deceptive practices to bypass regulations designed to prevent advanced AI hardware from reaching destinations considered a threat to U.S. interests.
“As alleged in the Indictment, the defendants participated in a systematic scheme to divert massive quantities of U.S. artificial intelligence technology to customers in China,” said U.S. Attorney Jay Clayton. “They did so through a tangled web of lies, obfuscation, and concealment—all to drive sales and generate revenues in violation of U.S. law. Diversion schemes like those disrupted today generate billions of dollars in ill-gotten gains and pose a direct threat to U.S. national security. Crimes involving sensitive technology must be met with swift action otherwise the law is meaningless. I commend the women and men of our Office, the FBI, and the Department of Commerce for their swift action in identifying, charging, and stopping this brazen evasion of our laws that protect national security and U.S. competitiveness. We will continue to doggedly investigate and prosecute these illegal diversion schemes.”
Assistant Director Roman Rozhavsky said: “The FBI’s investigation revealed that Liaw, Chang, and Sun allegedly conspired to sell billions of dollars’ worth of servers integrating sensitive, controlled graphic processing units to buyers in China, in violation of U.S. export control laws… That’s why combating export violations is among the FBI’s highest priorities…”
FBI Assistant Director James C. Barnacle Jr., added: “Yih-Shyan Liaw, Ruei-Tsang Chang, and Ting-Wei Sun allegedly defrauded the United States by conspiring to divert significant quantities of servers with advanced artificial intelligence capabilities to Chinese customers… The FBI will hold accountable individuals who use American companies to provide export-controlled technology to our adversaries.”
According to allegations detailed in court documents, between 2024 and 2025 Company-1 purchased approximately $2.5 billion worth of servers from a publicly traded U.S.-based manufacturer co-founded by Liaw; many were diverted illegally into China using false documentation and dummy equipment staged for audits.
The charges include conspiracy under the Export Controls Reform Act (maximum sentence: 20 years), conspiracy to smuggle goods (maximum: five years), and conspiracy to defraud the United States (maximum: five years). Sentencing will be determined by a judge if convictions are secured.
Clayton praised federal agencies involved in investigating this case but reminded that “the charges contained in the Indictment are merely accusations,” noting all defendants are presumed innocent unless proven guilty.
