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U.S. Prosecutors Allege Smuggling of Nvidia Chips to China in New Court Cases
Court records show three men discussed shipping banned Nvidia GPUs to China via WeChat messages that warned against mentioning the country to avoid detection. The cases are part of broader U.S. efforts to enforce export controls on advanced semiconductors destined for China, Russia and Iran.
May 13, 4:13 AM·3m read1 source
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Court records unsealed in March 2026 detail text messages in which a New York marketing executive and his business partner discussed finding ways to move Nvidia GPUs to buyers in China despite U.S. export bans on the advanced chips. In March 2024, Matthew Kelly, 49, of New York, sent a message on the Chinese app WeChat to Stanley Yi Zheng outlining a pitch to potential partners.
Kelly wrote that the business was "lucrative" with millions in profits possible per order and sought contacts who could identify buyers for chips used in AI, cloud computing or bitcoin mining or set up front companies in China. " He told Kelly to delete references to the country because doing so would "draw attention from US government for embargo violation," according to screenshots included in court filings.
Kelly responded that the details had already been shared with others. " Those exchanges form part of allegations that Zheng, Kelly and Tommy Shad English, 53, of Atlanta, conspired to commit smuggling and export control violations. The U.S. government has until June to decide whether to file formal charges.
The case is one of several recent prosecutions and penalties aimed at curbing the flow of American-made semiconductors to countries subject to U.S. export controls. In the past 12 months, the Commerce Department's Bureau of Industry and Security has announced nearly $420 million in combined penalties and forfeitures tied to illegal shipments of semiconductor technology to China.
Federal prosecutors have also charged individuals in schemes involving hundreds of Nvidia GPUs. In one Florida case, authorities alleged that two men created a fake realty company to route 400 Nvidia A100 GPUs to China through Thailand and Malaysia between October 2024 and January 2025.
