Federal authorities have dismantled a sophisticated smuggling ring involving three men accused of trying to funnel millions of dollars’ worth of restricted American artificial intelligence chips to China.
Stanley Yi Zheng, Matthew Kelly, and Tommy Shad English now face charges for conspiring to commit smuggling and export control violations after allegedly using shell companies in Thailand to bypass U.S. national security laws.
The investigation, which spanned several federal agencies, revealed a plot to acquire high-end Graphics Processing Units (GPUs) from a California-based hardware company. These chips are strictly controlled due to their critical role in military AI and advanced computing.
According to court documents, the scheme began in May 2023. The trio reportedly attempted to buy 750 computer servers—600 of which contained export-controlled chips—valued at approximately $170 million.
To mask the final destination, the defendants allegedly used Thailand-based companies as “pass-through” partners. Tommy Shad English is accused of signing certifications stating the tech was not destined for China, despite internal communications suggesting otherwise.
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“The cutting-edge AI chips the defendants allegedly schemed to export to China represent the best of American ingenuity and years of strategic investment,” said Assistant Attorney General for National Security John A. Eisenberg. “NSD is committed to protecting U.S. innovation.”
The deal hit a snag in early 2024 when the California manufacturer grew suspicious. Company officials noted it was “odd” that no representatives from the Thai companies were included in email threads and reminded the defendants that China is an embargoed country.
Investigators later recovered text messages from a group chat titled “GPU Partnership.” In one exchange, Matthew Kelly noted the need for company details to satisfy compliance, to which English allegedly replied, “I fake these weeks ago.”
Other messages showed the group discussing the “lucrative” nature of the business, with potential profits in the millions. In March 2024, Zheng reportedly warned Kelly to scrub any mention of China from solicitation messages to avoid drawing attention from the U.S. government, adding, “We just talk about it, no one can hold it as evidence against us.”
The legal fallout has been swift:
- Stanley Yi Zheng, 56, of Hong Kong, was arrested on March 22, 2026. The government has moved to hold him without bail.
- Matthew Kelly, 49, of Hopewell Junction, New York, surrendered to authorities on March 25.
- Tommy Shad English, 53, of Atlanta, Georgia, also surrendered on March 25.
Federal officials emphasized the risk such exports pose to the military. “When individuals attempt to illegally acquire or export this technology for profit, they are putting national security and our warfighters at risk,” said Jason J. Sargenski of the Defense Criminal Investigative Service.
U.S. Attorney Theodore S. Hertzberg added that his office is focused on ensuring “any bad actor who seeks to profit from endangering our security will face justice in an American courtroom.”
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