A federal grand jury in Manhattan has indicted three individuals on charges of conspiring to divert hundreds of high-performance, AI-capable servers to Chinese customers in violation of U.S. export control laws [1]. The defendants are Yih-Shyan "Wally" Liaw, a U.S. citizen; Ruei-Tsang "Steven" Chang, a Taiwanese national currently a fugitive; and Ting-Wei "Willy" Sun, also a Taiwanese national [1]. The Department of Justice unsealed the indictment on March 20, 2026. Two defendants were arrested and made initial appearances in the Northern District of California [1].
The indictment alleges a scheme in which the defendants used a pass-through company to conceal the true destination of the servers, which were subject to U.S. export restrictions on advanced technology [1]. According to the charging document, the defendants fabricated end-user documentation and staged substitute equipment during compliance audits to disguise the diversion from regulators and vendors [1]. The conduct alleged implicates the Export Administration Regulations, the statutory framework administered by the Commerce Department's Bureau of Industry and Security that restricts the transfer of dual-use technology to restricted end-users and countries [1]. China remains subject to heightened controls on advanced computing hardware under that framework.
The case was filed in the Southern District of New York and assigned to federal prosecutors there, while the two arrested defendants appeared before a magistrate judge in the Northern District of California [1]. The FBI led the investigation [1]. Chang's fugitive status indicates he has not been taken into custody, and extradition proceedings, if any, would depend on his location. The indictment itself does not specify the precise server models at issue, though the DOJ's public characterization describes the hardware as cutting-edge AI technology subject to export licensing requirements.
The prosecution is one of several recent federal actions targeting the alleged circumvention of U.S. controls on advanced semiconductor and AI hardware destined for China. The Commerce Department has progressively tightened restrictions on high-bandwidth memory and high-performance computing chips since 2022, and DOJ has publicly signaled that enforcement of those controls is a priority. Liaw and Sun face arraignment proceedings in the Southern District of New York; the timeline for Chang's appearance will depend on his apprehension. If convicted on the conspiracy count, the defendants face substantial federal prison terms under the Export Control Reform Act.