Three people have been indicted with conspiring to commit smuggling and export control violations after it was revealed that they intended to order over $170 million worth of computer servers containing export-controlled chips made by a California-based company. According to the Department of Justice, Stanley Yi Zheng, Matthew Kelly, and Tommy Shad English worked together in an attempt to purchase more than 1,000 servers from an American manufacturer that contained said AI chips. Zheng is a 56-year-old from Hong Kong, China, while Kelly, 49, and English, 53, are both based in the U.S. Zheng was arrested on March 22, 2026, while the two other co-conspirators surrendered to federal authorities three days later. The revelation follows a report last week where Super Micro employees were charged with smuggling $2.5 billion worth of Nvidia hardware to China.
English first tried to purchase 750 servers, worth about $170 million, in October 2023 from the said server manufacturer (dubbed Company-1 in the case), of which 600 contained controlled chips. He was supposedly making the purchase on behalf of a Thailand-based company and even signed an “Advanced Computing Certification” noting that the units were not heading for China or any other country sanctioned by the United States. After transferring $20 million to Company-1 as partial payment for the order, English asked to include Zheng and Kelly in the email thread.
This rang alarm bells within Company-1 as they noted that Zheng’s company is based in China and that no one from the Thailand-based company was included in the recipients. It also noted that “China is an embargoed country restricted by the U.S. Government. U.S. Companies are restricted from selling to businesses or end users headquartered in China.” Since Company-1 was unable to verify the supposed Thai end-user for the October 2023 order, it did not complete English’s purchase order.
Article continues belowYou may think that that would’ve been the end of it, but it seems that English wanted to give it another try. In April 2024, he signed up for another order — this time attempting to purchase 500 servers, again from Company-1. He signed another End User Certification saying that the servers are headed for Thailand, but, for one reason or another, the deal fell through again.
The biggest evidence against the three people are messages in the group chat entitled “GPU Partnership.” These included messages with English telling Kelly, “I’m not breaking my back. I fake (sic) these weeks ago,” as well as a discussion regarding the prices of Nvidia’s A100, A800, H100, and H800 chips in China. Kelly even sent Zheng a draft solicitation message that told potential partners that “We also have a few customers in China but it’s a banned country for distribution,” and “One (sic) you can find customers that need GPUs for their supercomputer solutions or two they act as a pass through (sic) partner for customers in China.” Zheng even responded to this with “DO NOT MENTION ANYTHING ABOUT CHINA,” and “We will draw attentions (sic) from US government for embargo (sic) violation.”
It’s unclear how the three were arrested by the authorities, but their activities were probably reported by Company-1, especially after English’s multiple attempts to acquire the banned chips. Furthermore, this isn’t the first case tied to AI chip smuggling that the U.S. Is trying — just this month, three Supermicro employees have been indicted for smuggling $2.5 billion worth of Nvidia hardware to China.
Follow 3DTested on Google News, or add us as a preferred source, to get our latest news, analysis, & reviews in your feeds.
