Operation Gatekeeper: U.S. Authorities Shut Down Major China-Linked AI Tech Smuggling Network

The U.S. Justice Department released the below information:

Two businessmen are now in custody for allegedly violating U.S. export control and smuggling laws. As part of the overall investigation, a Houston company and its owner also pleaded guilty to smuggling cutting-edge Artificial Intelligence (AI) technology out of the United States, and the United States has seized over $50 million in Nvidia technologies and cash.

“Operation Gatekeeper has exposed a sophisticated smuggling network that threatens our Nation’s security by funneling cutting-edge AI technology to those who would use it against American interests,” said U.S. Attorney Nicholas J. Ganjei for the Southern District of Texas. “These chips are the building blocks of AI superiority and are integral to modern military applications. The country that controls these chips will control AI technology; the country that controls AI technology will control the future. The Southern District of Texas will aggressively prosecute anyone who attempts to compromise America’s technological edge.”

“Gong and his accomplices allegedly led a complex scheme to smuggle high-performance graphic processing units to China in violation of U.S. export laws,” said Assistant Director Roman Rozhavsky of the FBI’s Counterintelligence Division. “This case highlights the importance of interagency cooperation to protect U.S. technology; the FBI, alongside our partners, will continue to aggressively investigate these violations and bring those responsible to justice. We ask our private sector partners to remain vigilant to this increasing threat as our adversaries try to match U.S. artificial intelligence breakthroughs.”

According to court documents, Alan Hao Hsu, also known as Haochun Hsu, 43, of Missouri City, Texas, and his company, Hao Global LLC, both pleaded guilty to smuggling and unlawful export activities on Oct. 10, 2025. According to now unsealed court documents, between October 2024 and May 2025, Hsu and others knowingly exported and attempted to export at least $160 million worth of export-controlled Nvidia H100 and H200 Tensor Core graphic processing units (GPUs). 

The H100 and H200 are high-speed GPUs used for AI applications and high-performance computing. They are designed to process massive amounts of data, advancing generative AI and large language models and accelerating scientific computing. These GPUs are used for both civilian and military applications.

Hsu and others falsified shipping paperwork, misclassifying the true nature of the goods and their recipients to conceal the ultimate destination of the GPUs. Hsu and Hao Global received more than $50 million in wire transfers that originated from the People’s Republic of China (PRC) to help fund the scheme. The GPUs were ultimately shipped to the PRC, Hong Kong and other destinations in violation of U.S. export laws.

At sentencing, Hsu faces up to 10 years in prison on Feb. 18, and Hao Global LLC faces a maximum penalty of twice the gross gain from the offense and a term of probation.

Also charged in relation to the scheme are two PRC natives. Benlin Yuan, 58, the chief executive officer of a Sterling, Virginia, IT services company, which is the U.S. subsidiary of a large PRC IT company based in Beijing, was arrested in Sterling, Virginia, on Nov. 28 and charged with conspiring to violation the Export Control Reform Act (ECRA) of 2018. Yuan is a Canadian citizen who resides in Mississauga, Ontario.

Fanyue Gong, also known as Tom Gong, 43, a PRC citizen who resides in Brooklyn, New York, is the owner of a New York technology company and was arrested in New York on Dec. 3. Gong was charged with conspiring to smuggle goods out of the United States.

According to charging documents, Gong and Yuan also independently conspired with employees of a Hong Kong-based logistics company and a China-based AI technology company to circumvent U.S. export controls.

The criminal complaint against Gong alleges that co-conspirators obtained Nvidia GPUs through straw purchasers and intermediaries, falsely indicating that the goods were for U.S. customers or customers in third countries that do not require a license to export. The GPUs were shipped to multiple U.S. warehouses where individuals who worked for Gong removed Nvidia labels and re-labeled the GPUs with the name “SANDKYAN” – a fake company – and then prepared the goods for export at his direction. The shipping and export paperwork for the GPUs allegedly misclassified the goods as generic computer parts. The charges allege co-conspirators then shipped the goods or attempted to do so to the PRC and Hong Kong in violation of U.S. laws.

According to the complaint, Yuan helped recruit and organize individuals to inspect the mislabeled GPUs on behalf of the Hong Kong logistics company. Yuan allegedly agreed to direct inspectors not to say the goods were destined for the PRC. The government also alleges Yuan directed discussions regarding crafting a story his company could use to get GPUs and other equipment released after federal law authorities detained it. Yuan allegedly engaged in several conversations about providing false information to U.S. authorities regarding the ultimate customer of the goods.

As alleged, Yuan also participated in and agreed to direct actions involving the handling and storage of another export of Nvidia GPUs on behalf of the Hong Kong logistics company.

If convicted, Yuan faces up to 20 years in prison for conspiring to violate ECRA and up to a $1 million fine. If convicted, Gong faces up to 10 years in prison for conspiring to smuggle goods out of the United States.

Hsu was permitted to remain on bond pending sentencing. Yuan and Gong are currently in custody pending further criminal proceedings.

The Commerce Department’s BIS Office of Export Enforcement Dallas Field Office, Immigration and Customs Enforcement Homeland Security Investigations (ICE HSI) Dallas, and FBI New York and Washington Field Offices are investigating the case.

Assistant U.S. Attorneys John Marck and Mark McIntyre for the Southern District of Texas and Trial Attorney Fatema Merchant of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case, with substantial assistance provided by Trial Attorney Yifei Zheng, also from the Counterintelligence and Export Control Section.

A criminal complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law. 

Wanamaker Light Show & Dickens Village Returns For Holiday Season

Philly Daily, where my Crime Beat column appears weekly, reports that the Wanamaker Light Show and Dickens Village, based on Charles Dicken’s A Christmas Carol. has returned for the 2025 holiday season. 

You can read about the Wanamaker Light Show and the Dickens Village via the link below:

Wanamaker Light Show & Dickens Village Returns for Holiday Season - Philly Daily

FBI: Don’t Let Scammers Ruin Your Holiday Season

 The FBI released the information below:

As scammers increasingly use pressure tactics and artificial intelligence to defraud Americans out of their hard-earned money, the FBI is reminding everyone to protect themselves and their families from fraud this holiday season.

"If you feel pressured to act fast, pay money, or turn over personal information—take a beat. Stop and assess if what you're being told is real. Talk to your families. Protect each other from scams," said FBI Director Kash Patel. "Scammers are banking on the fact that you'll feel too embarrassed to come forward and report the crime to the FBI. Don't let them win."

The FBI specifically encourages Americans to talk to their loved ones about not sharing sensitive information with people they have met only online or over the phone. They also should not send money, gift cards, cryptocurrency, or other assets.

Cyber-enabled fraud dominates the scam landscape, accelerated by artificial intelligence (AI). In the first seven months of 2025, AI accounted for more than 9,000 complaints to the FBI’s Internet Crime Complaint Center (IC3), and those AI complaints spanned all types of scams. Fraudsters use technology to create fake social media profiles, voice clones, identification documents, and videos with believable depictions of public figures or even loved ones. Fraudulent or suspicious activity can be reported to the FBI at ic3.gov. Tipsters should include information such as:

•  identifying information about the person or company which contacted them
• methods of communication used, to include websites, emails, and phone numbers
• financial transaction information, such as the date, type of payment, amount, account numbers involved, the name and address of the receiving financial institution, and receiving cryptocurrency addresses
• description of the interaction with the fraudster

The IC3 received 535,314 complaints reporting $13.7 billion in losses last year, an average loss of $25,700 per victim. Between 2020 and 2024, a total of $50.5 billion in losses were reported to IC3. People over 60 suffered the most losses and submitted the most complaints. Victims over 60 who need assistance filing an IC3 complaint can contact the DOJ Elder Justice Hotline, 1-833-FRAUD-11 (833-372-8311). Learn more about scam prevention at fbi.gov/takeabeat. 

My Crime Fiction: A Christmas Crime Story

As the Christmas season is once again upon us, I’d like to once again share my short story, A Christmas Crime Story.

The short story originally appeared in The Orchard Press Online Mystery Magazine in 2003. 

A Christmas Crime Story 

 By Paul Davis

To get in the true spirit of the Christmas holiday, some people go to church, some people go to the homes of family and friends, and some people go out and shop.

Me? I go to cop bars.

Cops are great storytellers. Perhaps it’s because they observe a segment of life that’s dramatic, tragic and funny. Perhaps it’s also because they spend so much time cruising on patrol that they’ve had the time to develop and hone their story-telling skills.

As a writer, I’ve talked to cops in station houses, in patrol cars, on the street and in bars. I’ve listened to their concerns, prideful boasts and sorrowful confessions. I’ve accompanied cops on patrol and witnessed them handle insane, intoxicated and incongruous citizens. I’ve observed how they console crime victims and their families. I’ve seen how they cope with the aftermath of criminal violence and man’s inhumanity to man. And I’ve come to appreciate their black humor, which like military humor, is a necessary safety valve to get them through the bad times.

I especially like to frequent cop bars during the holiday season and listen to cops at their very best. Some cops gather at bars after work to relax, drink and tell their stories. At this time of year, they are in very good spirits, a bit happier, a bit giddier and a bit more talkative.

Cops are generally in good spirits despite the fact that the holiday season is a busy one for them. It’s a sad commentary, but the holiday season is a peak time for crime.

Criminals certainly love the holiday season, but not for spiritual or sentimental reasons. It’s simply a time of grand opportunity. And criminals certainly don’t take a Christmas vacation. As joyous and hopeful people go out to worship, shop, dine and visit family and friends, criminal predators go out and pickpocket, shoplift, mug, steal and burglarize.

My recent columns in the local newspaper covered the annual Christmas crime spree and over the years I’ve reported on and chronicled a good number of crime stories during the holidays. I recall covering the story of a do-gooder delivering toys to needy families who was viciously assaulted and robbed. Another story concerned two kids playing with their Christmas gift, a paint ball gun, when an irate neighbor came out and shot them with a real gun.

One year while out on patrol with the cops, I came upon a young couple who had started out drinking and getting high for the holidays and ended up with one murdering the other. I once covered a story about a man with a car full of gifts who ran into a store for a pack of cigarettes. He came out to no car, no gifts and no Merry Christmas for him that year.

I’ve covered an assortment of other stories about armed robberies, thefts, purse snatchings and other crimes during the holidays as well.

Despite the crime and tragedies I’ve seen, I still love the Christmas season. I love the lights and decorations, the hustle and bustle and all of the trimmings. I love Christmas music and often sing along, although admittedly off-key.

This particular year, even more than others in the past, I was in very good spirits, having recently recovered from severe spine and nerve damage that crippled me and caused God-awful pain. I spent several months in the hospital and convalescing at home. I’ve suffered with a bad back for many years, dating back to my years as an amateur boxer and playing other sports, and as a young sailor working on a U.S. Navy tugboat and an aircraft carrier. The build-up of damage to my poor back finally took its toll and crippled me.

The doctors at the hospital ruled that I was not a surgical candidate, determining that any operation would be too risky. As I was deathly afraid of surgery, this diagnosis suited me fine. So they loaded me up with wonder drugs and placed me in physical therapy. The physical therapists, trained by Saddam Hussein’s secret police, I suspect, got me to my feet and ran me through a series of painful but ultimately beneficial exercises.

When I initially collapsed during the summer in my bedroom, I thought the searing pain in my groin and back was akin to being shot with a high-powered rifle. My wife called 911 and the Philadelphia Fire Department’s Rescue Paramedics rushed me to the hospital. Despite being in great pain, I managed to joke with the attending doctors and nurses that first night in the hospital.

This is the most painful day of my life, I told them - and I’ve been to Vietnam.

And I’m married.

And I have a teenage daughter.

I got a few laughs, which helped to lighten my pain, as I am a ham to the end. In addition to the fine medical professionals who cared for me, it was my wonderful wife and family - who were often the brunt of my jokes and asides – who helped me get through the worst time of my adult life.

Within the period of five months, I went from being bed-ridden in great pain, to twirling around the hospital halls in a wheelchair, to walking a few painful steps with a walker, to finally walking into a cop’s bar aided by a cane this fine Christmas season.

I’d recovered sufficiently enough to go out and stop by Johnny Drum’s Bar & Grill, a great little cop’s bar in South Philly. I had a lot to be thankful for this year and I visited Johnny’s place expecting to run into some lively characters that felt likewise.

I was somewhat disappointed to first encounter Sgt. John Snyder at the bar. Snyder was known as one mean cop. He was of average height, a bit stocky and had a large, pan-shaped head topped with thinning dark hair. He was an unhappy, gruff and miserable man. A cop once made the comment that Snyder "barked" rather than spoke.

I recall previous Christmas seasons when Snyder would be at the end of the bar by himself, miserly nursing his drink. In addition to being foul-tempered, Snyder was a notorious cheapskate.

"Merry Christmas, Ebenezer," I’d greet him in jest during those holiday visits. "Bah, humbug," he’d respond, playing along begrudgingly with my take on Charles Dickens’ classic holiday story, A Christmas Carol. I joked around, but in truth he was truly as mean-spirited as Dickens’s Ebenezer Scrooge.

Sgt. Snyder was widely known as "The Cop Who Busted Santa Claus." As the often-told story goes, Snyder pulled over a man dressed as Santa on Christmas Eve a few years back. Observing that the red-suited, false-bearded man was slightly inebriated, Snyder promptly placed him under arrest.

He slapped the handcuffs on the man and then had had his car towed. The tow truck took the car, despite the jolly old soul’s somewhat slurred pleas that his car – a modern-day sleigh - was full of toys destined for children at an orphanage. A crowd had gathered on the street and booed the police officer’s actions. He cursed them and threatened to lock them all up.

"And a Merry, Merry Christmas to you as well," one bystander sarcastically remarked.

More holiday-spirited police officials quickly released the man dressed as Santa. The man, outraged by his treatment, promptly called a TV station and told his story. The mayor, the police commissioner and other police brass were not happy with the lead news story run on Christmas Day. The national press picked up the story and this did not help Philadelphia’s image. "The Cop Who Busted Santa Claus" complemented an earlier story of Philadelphia sport fans pelting Santa with snowballs at a ball field.

A cop once told me that Snyder had him out walking on South Street on a very cold and windy Christmas Eve night. Snyder sternly ordered the beat cop not to hang out in a store, sucking up heat, coffee and merriment. Of course, the cop quickly escaped the bitter wind and cold and stepped into a shoe store for hot chocolate and conversation with the store owner and customers.

When the cop looked out through the store window and saw Snyder’s car roll down South Street, he stepped out and stood in front of the store, shivering. "Have you been hiding in a store?" Sgt. Snyder barked. "No, of course not" the cop told him. "Although it is really cold out here, Sarge."

Snyder placed his bare hand on the cop’s badge and found the metal to be nearly as warm as the hot chocolate in the beat cop’s stomach.

The chastened police officer told every cop, everybody, the story. "Do you believe it? The SOB chewed me out on Christmas Eve!"

There were also tales of Snyder locking up kids whose only crime was being merry. Sgt. Snyder was a one-man crime-fighting machine during the holiday season, targeting not thieves and crooks, but rather the people whose only crime was to be too joyous.

To his credit, he still talked to me despite the two negative stories I wrote about him in the past. One of my columns covered "The Cop Who Busted Santa Claus" and I wrote another that dealt with Snyder’s arrest of a honeymooning couple who were visiting the Italian Market. Their crime? The happy couple, who were married on Christmas Eve, asked the good sergeant to pose with them for a photo. He didn’t like their attitude and placed them under arrest for disorderly conduct.


But this year, as I approached him at the bar, I saw that Snyder was clearly a changed man. Over a few drinks, he told me why.

A day earlier the gruff sergeant responded to the call of a residential burglary. The victim told the responding officers that among the stolen valuables were his military awards and other mementos of the Iraq War. He told Snyder that he had just returned from Iraq as a medically discharged soldier due to combat wounds.

"Who’d steal this stuff?" he asked Snyder. "Who would steal children’s toys at Christmas?"

The burglars stole the gift-wrapped presents from under the Christmas tree. The young former soldier was saddened by the loss of his gifts to his wife and children. He said he was not insured, and he could not afford to buy new gifts. Snyder, the well-known mean, jaded and cynical cop, was truly touched by this young veteran who had just returned from war.

Snyder felt empathy for someone for the first time in many years. He thought back to his own return from Vietnam so many years before. He recalled how he then yearned to become a cop. He also yearned to marry his high school sweetheart and to have kids with her. He accomplished all that he set out to do, and now, in the midst of a crime scene, he wondered why it had all soured for him.

He marriage suffered from his penny-pinching, his chronic petty complaints, and his foul temper. His wife finally drew up the courage to throw him out of the house one night after he came home drunk, mean and violent. He would never hit her or the kids, he assured me, but he often gave the inanimate objects in the house a real good beating.

The kids, grown now and on their own, rarely spoke to him. He thought of them as he watched the veteran’s children. The sight of these kids, sitting close together on the couch, perhaps wondering if the crooks would come back, if Santa were coming now, or whether Jesus still loved them, broke Snyder’s heart.

Snyder made the rounds of the local veteran’s organizations the next day and told the story of the veteran who had been victimized. He collected a good bit of money from the veterans, from his fellow police officers and he personally donated a large sum himself. Having secured the list of stolen items from South Detectives, he ventured to the stores and purchased nearly all of the stolen items.

He also called his wife, sweet-talked her, told her he was a changed man and asked her to accompany him when, like Santa Claus, he would deliver the replacement gifts to the veteran and his family.

He was truly beaming as he told me this Christmas crime story. I had never seen him smile before.

He told me how the veteran’s kids were so happy they cried. The veteran was embarrassed, but thankful. Snyder explained that his fellow veterans and the local cops wanted to help him and his family.

By helping the veteran, Snyder recalled the true meaning of Christmas. He felt the joy of giving and of goodness and loving - even in a cruel and sometimes evil world.

"I have to run," he said, finishing up his story and beer, "I’m celebrating Christmas with my wife, my kids and all of my grandkids."

Before he left, Snyder, to everyone’s astonishment but mine, bought a round for the house.

"Merry Christmas to one and all," he barked.

© 2003 By Paul Davis 

Manning The Rails: Never Forget The December 7th Sneak Attack On Pearl Harbor

In November of 1970 I was one of many young sailors who “manned the rails” on the aircraft carrier USS Kitty Hawk as we passed the USS Arizona Memorial at Pearl Harbor in Hawaii. (See the above photo). 

We manned the rails in dress white uniforms on the edge of the ship as a salute to honor the sunken battleship USS Arizona and the sailors and Marines who died during the Imperial Japanese sneak attack on Pearl Harbor on December 7, 1941, “A date,” noted then-President Franklin Roosevelt, “which will live in infamy.” 

The Kitty Hawk made a port of call at Pearl Harbor just prior to our heading to Subic Bay in the Philippines and then onto “Yankee Station” in the Gulf of Tonkin off the coast of North Vietnam during the final years of the Vietnam War. 

Like many old surviving sailors today, I again salute the servicemen who died on December 7, 1941, and I’d like to remind younger readers to never forget the Pearl Harbor attack which drew America into World War II. 

A Date Which Will Live In Infamy: Remember And Honor Pearl Harbor

 

DEA Launches Fentanyl Free America Initiative To Combat The Synthetic Drug Crisis

The DEA released the information below:

WASHINGTON – The U.S. Drug Enforcement Administration is intensifying its fight against the deadly threat of synthetic opioids with the launch of Fentanyl Free America, a comprehensive enforcement initiative and public awareness campaign aimed at reducing both the supply and demand for fentanyl. This effort underscores DEA's unwavering commitment to protecting American lives and communities from the devastating impacts of fentanyl, which claimed nearly 50,000 lives last year according to the Centers for Disease Control and Prevention (CDC).

Through intensified enforcement operations and heightened intelligence, DEA is applying unprecedented pressure on the global fentanyl supply chain, forcing narco-terrorists, like the Sinaloa Cartel and CJNG Cartel, to change their business practices. This has led to encouraging signs of progress. DEA laboratory testing indicates 29% of fentanyl pills analyzed during fiscal year (FY) 2025 contained a potentially lethal dose, a significant drop from 76% of pills tested just two years prior in FY 2023. Additionally, fentanyl powder purity decreased to 10.3%, down from 19.5% during the same time period. These reductions in potency and purity correlate with a decline in synthetic opioid deaths to levels not seen since April 2020.

Aside from producing less potent fentanyl, the cartels have increasingly diversified their operations in an attempt to minimize their risks and maximize profits, an evolution driven by opportunity and greed.

As of December 1, 2025, DEA has seized more than 45 million fentanyl pills, and more than 9,000 pounds of fentanyl powder, removing an estimated 347 million potentially deadly doses of fentanyl from our communities. DEA intelligence indicates a shift in cartel operations, with increased trafficking of fentanyl powder and domestic production of fentanyl pills. The seizure of more than two dozen pill press machines in October further highlights this trend.

"Fentanyl Free America represents DEA’s unwavering commitment to save American lives and end the fentanyl crisis, we are making significant progress in this fight, and we must continue to intensify efforts to disrupt the fentanyl supply and reduce demand,” said DEA Administrator Terrance Cole. “DEA is striking harder and evolving faster to dismantle the foreign terrorists fueling this crisis, while empowering all our partners to join the fight to prevent fentanyl-related tragedies. Together, we can achieve a fentanyl free America and create a safer future for generations to come.”

DEA remains at the forefront of the fight to disrupt trafficking networks and strengthen the government’s response to this epidemic. Fentanyl Free America represents DEA’s heightened focus on enforcement, education, public awareness, and strategic partnerships. The goal of the campaign is clear: eliminate the fentanyl supply fueling the nation’s deadliest drug crisis. Since 2021, synthetic opioids have claimed nearly 325,000 American lives.

The Fentanyl Free America campaign also emphasizes the importance of public engagement. DEA encourages everyone from community leaders, clergy, educators, parents, physicians, pharmacists, and law enforcement to take an active role in raising awareness by protecting others through education; preventing fentanyl poisonings by understanding the dangers; and supporting those impacted. Free resources including posters, radio advertising, billboards, and social media resources are available at dea.gov/fentanylfree.

DEA’s efforts are part of a larger whole-of-government strategy to dismantle transnational criminal organizations and protect U.S. communities from fentanyl.