--- title: "The 2026 Liaw export-diversion case" language: en canonical: https://dossiertwist.com/dossiers/super-micro-computer-inc/liaw-indictment/ as_of: 2026-10-17 keywords: ["Super Micro Computer","Supermicro","SMCI","Charles Liang","Sara Liu","Wally Liaw","Ablecom Technology","Compuware Technology","Steve Liang","Bill Liang","related-party transactions","Ernst & Young resignation","Special Committee","SEC cease-and-desist order","restatement","Nasdaq delisting","export controls","United States v. Liaw","securities class action","Leadtek Research"] --- # The 2026 Liaw export-diversion case **Question.** What does the 2026 S.D.N.Y. case against Wally Liaw and two others allege, and where does it stand? **Answer.** On March 19, 2026 the U.S. Attorney's Office for the Southern District of New York unsealed an indictment charging Yih-Shyan “Wally” Liaw, a Supermicro co-founder and director, Ruei-Tsang “Steven” Chang and Ting-Wei “Willy” Sun with conspiring to divert U.S.-assembled servers with AI technology to China, allegedly through a Southeast Asian pass-through customer the indictment calls “Company-1”. Liaw pleaded not guilty and the trial is set for March 29, 2027; Sun pleaded guilty to four counts on October 8, 2026; Chang has not appeared. Supermicro is not charged and says an investigation it commissioned found no evidence that any current member of senior management knew of the alleged scheme. ## The charges and the defendants - Analysis: On March 19, 2026 the U.S. Attorney's Office for the Southern District of New York announced the unsealing of an indictment charging Yih-Shyan “Wally” Liaw, Ruei-Tsang “Steven” Chang and Ting-Wei “Willy” Sun with conspiring to divert to China high-performance servers assembled in the United States that integrate U.S. artificial-intelligence technology, in violation of export control laws. Each was charged with conspiring to violate the Export Control Reform Act (maximum 20 years in prison), conspiring to smuggle goods from the United States (five years) and conspiring to defraud the United States (five years). An indictment is an accusation by prosecutors, not a finding, and the charging papers call the company only the “U.S. Manufacturer” and do not name the customer they call “Company-1”. Liaw and Sun were arrested that day in the Northern District of California, while the release said Chang remained a fugitive; Liaw and Sun pleaded not guilty at their arraignment on April 1, 2026. Sun later pleaded guilty, on October 8, 2026, to a four-count superseding information; Liaw's trial is set for March 29, 2027, and the docket shows no arrest or appearance by Chang. [src-007] [src-068] - Analysis: The indictment describes Liaw as a co-founder, board member and Senior Vice President of Business Development of a publicly traded information technology company headquartered in San Jose, California, who oversaw members of its global sales teams, including Chang, a general manager in its Taiwan office, and it describes Sun as a third-party broker and “fixer” who worked with Liaw, Chang and others to divert U.S. export-controlled technology to China. Neither the indictment nor the Justice Department release names the manufacturer. Supermicro's annual report for fiscal 2026 states that the three individuals were “either employed or associated with the Company at the time”, calls them “three former associates”, and reports a grand jury subpoena from the same office for documents on them, the facts in the indictment and its compliance program and internal controls. Supermicro itself is not charged. [src-007] [src-070] [src-068] [src-002] - Attributed: The indictment describes Liaw as a co-founder, board member and Senior Vice President of Business Development of a publicly traded information technology company headquartered in San Jose, California (the "U.S. Manufacturer"), who oversaw members of its global sales teams, including Chang, a general manager in the manufacturer's Taiwan office. It describes Sun as a third-party broker and "fixer" who worked with Liaw, Chang and others to divert U.S. export-controlled technology to China. [src-007] [src-070] [src-068] - Qualification: These are allegations in charging documents filed by federal prosecutors; an indictment is an accusation, not a finding. The charging papers call the company only the "U.S. Manufacturer" and do not name Company-1. - Response: Liaw pleaded not guilty on April 1, 2026. - Outcome: Sun pleaded guilty on October 8, 2026; the charges against Liaw and Chang remain pending. ## What the indictment alleges - Analysis: Everything the indictment says about the scheme remains an allegation: these are charges filed by federal prosecutors, an indictment is an accusation, not a finding, the amounts are the prosecutors' figures, and the charging papers call the company only the “U.S. Manufacturer” and do not name the customer they call “Company-1”. Liaw pleaded not guilty on April 1, 2026. Sun pleaded guilty on October 8, 2026 to a superseding information covering conduct from October 2023 to March 19, 2026; there is no verdict on the indictment's allegations against Liaw or Chang. [src-007] [src-070] [src-068] [src-069] - Attributed: The indictment alleges that between July and August 2025 Sun and Chang staged non-functioning "dummy" servers in warehouses rented by Company-1 to pass an audit by the manufacturer's compliance team of servers that had already been diverted to China, while the manufacturer's auditor was off-site enjoying entertainment paid for by Company-1. The audit was completed on or about August 14, 2025; that day Sun allegedly texted Liaw that it had covered "2,107 units in three warehouses" and sent photographs of the staged servers, and Liaw replied "That's spectacular!". [src-070] [src-068] - Qualification: These are allegations in charging documents filed by federal prosecutors; an indictment is an accusation, not a finding. The charging papers call the company only the "U.S. Manufacturer" and do not name Company-1. - Response: Liaw pleaded not guilty on April 1, 2026. - Outcome: Sun pleaded guilty on October 8, 2026 to a superseding information alleging the July–August 2025 staging of dummy servers for this audit. - Attributed: According to the indictment, on or about August 20, 2025 BIS told the manufacturer it had reason to believe Company-1 was diverting its servers to China and that BIS had requested a compliance hold on all shipments to Company-1. Before a BIS post-shipment verification on December 19, 2025, Sun and a broker allegedly staged dummy servers, using a hair dryer to move labels and serial-number stickers, and Sun posed to the Commerce Department officer as "Michael", an assistant from Company-1's law firm, answering questions falsely. The indictment states that as of its date BIS had not lifted the hold. [src-007] [src-070] [src-068] - Qualification: These are allegations in charging documents filed by federal prosecutors; an indictment is an accusation, not a finding. The charging papers call the company only the "U.S. Manufacturer" and do not name Company-1. - Response: Sun pleaded not guilty on April 1, 2026, before his later plea. - Outcome: Sun pleaded guilty on October 8, 2026 to a superseding information that includes misrepresentations to a Commerce Department officer during a December 2025 post-shipment verification. - Analysis: According to the indictment, from about 2024 the defendants caused the sale of at least about $2.5 billion of the manufacturer's servers to a Southeast Asian company it calls “Company-1”, used as a pass-through, with payments transiting financial institutions in the Southern District of New York; a substantial portion were servers assembled in the United States and then diverted to China. In the prosecutors' figures, more than about $510 million of U.S.-assembled servers with Nvidia GPUs, subject to U.S. export controls, were sold to Company-1 and diverted to China between late April and mid-May 2025 alone. [src-007] [src-070] [src-068] [src-069] - Attributed: According to the indictment, since about 2024 the defendants caused the sale of at least about $2.5 billion of the manufacturer's servers to a Southeast Asian company it calls "Company-1", used as a pass-through, with payments transiting financial institutions in the Southern District of New York; a substantial portion were servers assembled in the United States and then diverted to China. Between late April and mid-May 2025 alone, over about $510 million of U.S.-assembled servers with Nvidia GPUs, subject to U.S. export controls, were allegedly sold to Company-1 and diverted to China. [src-007] [src-070] [src-068] [src-069] - Qualification: These are allegations in charging documents filed by federal prosecutors; an indictment is an accusation, not a finding. The charging papers call the company only the "U.S. Manufacturer" and do not name Company-1. The amounts are the prosecutors' figures. - Response: Liaw pleaded not guilty on April 1, 2026. - Outcome: Sun pleaded guilty on October 8, 2026 to a superseding information covering conduct from October 2023 to March 19, 2026; there is no verdict on the indictment's allegations against Liaw or Chang. - Analysis: The indictment alleges that in an internal spreadsheet of the manufacturer's top customers for the fourth quarter of its fiscal 2024, Company-1 ranked as the eleventh most profitable customer worldwide, with about $99.7 million of revenue in the quarter, although it lacked the capacity to store or use the servers it bought. It alleges that in June 2024 Liaw thanked an executive of Company-1 for the “help for June” and directed that tens of millions of dollars be transferred from Company-1 to the manufacturer so that it could place Nvidia GPU allocation orders and reserve inventory for diversion. [src-070] [src-068] - Attributed: The indictment alleges that in an internal spreadsheet of the manufacturer's top customers for the fourth quarter of its fiscal 2024, Company-1 ranked as the eleventh most profitable customer worldwide, with about $99.7 million of revenue in the quarter, although it lacked the capacity to store or use the servers it bought. It alleges that in June 2024 Liaw thanked an executive of Company-1 for the "help for June" and directed that tens of millions of dollars be transferred from Company-1 to the manufacturer so that it could place Nvidia GPU allocation orders and reserve inventory for diversion. [src-070] [src-068] - Qualification: These are allegations in charging documents filed by federal prosecutors; an indictment is an accusation, not a finding. The charging papers call the company only the "U.S. Manufacturer" and do not name Company-1. - Response: Liaw pleaded not guilty on April 1, 2026. - Analysis: The indictment describes compliance checks and how the defendants allegedly got around them. By late 2024, it says, the growth in Company-1's orders led the manufacturer's compliance team to place a temporary hold on shipments and start an audit; Chang allegedly conspired with a Company-1 executive to keep auditors out of the data-centre areas where the servers were supposedly held and arranged for an auditor Chang called “friendly”, while Liaw urged compliance staff to “speed this process up”. After Company-1 cleared the audit, Liaw allegedly directed that it put in place data-centre lease agreements, which the indictment says were often falsified by Chang. [src-070] [src-068] - Attributed: The indictment alleges that by late 2024 the growth in Company-1's orders led the manufacturer's compliance team to place a temporary hold on shipments and start an audit, and that Liaw and Chang worked to lift the hold and undermine it: Chang allegedly conspired with a Company-1 executive to keep auditors out of the data-centre areas where the servers were supposedly held and arranged for an auditor he called "friendly", while Liaw urged compliance staff to "speed this process up". After Company-1 cleared the audit, Liaw allegedly directed that it put in place data-centre lease agreements, which the indictment says were often falsified by Chang. [src-070] [src-068] - Qualification: These are allegations in charging documents filed by federal prosecutors; an indictment is an accusation, not a finding. The charging papers call the company only the "U.S. Manufacturer" and do not name Company-1. - Response: Liaw pleaded not guilty on April 1, 2026. - Analysis: In about April 2025, according to the indictment, the compliance team again paused shipments to Company-1; at Liaw's request Chang and Sun drafted responses for the compliance review, and on or about April 18, 2025 the compliance team released the account. Between late April and mid-May 2025 Company-1 then allegedly bought at least about $510 million of U.S.-assembled servers with Nvidia B200 and H200 GPUs, including about 58 servers for about $17.4 million on May 8 and about 60 servers for about $18 million each on May 12 and May 15, 2025, consigned to entities in China through brokers. [src-070] [src-068] - Attributed: According to the indictment, in about April 2025 the manufacturer's compliance team again paused shipments to Company-1; at Liaw's request Chang and Sun drafted responses for the compliance review, and on or about April 18, 2025 the compliance team released the account. Between late April and mid-May 2025 Company-1 then allegedly bought at least about $510 million of U.S.-assembled servers with Nvidia B200 and H200 GPUs, including about 58 servers for about $17.4 million on May 8 and about 60 servers for about $18 million each on May 12 and May 15, 2025, consigned to entities in China through brokers. [src-070] [src-068] - Qualification: These are allegations in charging documents filed by federal prosecutors; an indictment is an accusation, not a finding. The charging papers call the company only the "U.S. Manufacturer" and do not name Company-1. - Response: Liaw pleaded not guilty on April 1, 2026. - Outcome: Sun pleaded guilty on October 8, 2026. - Analysis: The indictment alleges that between July and August 2025 Sun and Chang staged non-functioning “dummy” servers in warehouses rented by Company-1 to pass an audit by the manufacturer's compliance team of servers that had already been diverted to China, while the manufacturer's auditor was off-site enjoying entertainment paid for by Company-1. The audit was completed on or about August 14, 2025; that day, according to the indictment, Sun texted Liaw that it had covered “2,107 units in three warehouses” and sent photographs of the staged servers, and Liaw replied “That's spectacular!”. Sun's guilty plea of October 8, 2026 covers a superseding information alleging this staging of dummy servers for the audit. [src-070] [src-068] - Analysis: According to the indictment, on or about August 20, 2025 the Commerce Department's Bureau of Industry and Security (BIS) told the manufacturer that it had reason to believe Company-1 was diverting its servers to China and that BIS had requested a compliance hold on all shipments to Company-1. Before a BIS post-shipment verification on December 19, 2025, Sun and a broker allegedly staged dummy servers, using a hair dryer to move labels and serial-number stickers, and Sun allegedly posed to the Commerce Department officer as “Michael”, an assistant from Company-1's law firm, and answered questions falsely. The indictment states that as of its date BIS had not lifted the hold. Sun, who pleaded not guilty on April 1, 2026, later pleaded guilty to a superseding information that includes misrepresentations to a Commerce Department officer during the December 2025 post-shipment verification. [src-007] [src-070] [src-068] ## The customer called “Company-1” - Analysis: The charging papers do not identify Company-1. A technology news site reported on May 8, 2026, citing a news agency's report based on unnamed sources, that Company-1 is OBON Corp., a Bangkok-based AI infrastructure firm that has been a public partner of Thailand's National AI Strategy. The report said OBON had not commented, that it had not been charged and that prosecutors were continuing to examine the role of the ends of the diversion chain. The indictment, the superseding information and the Justice Department release do not name Company-1, and no court record reviewed establishes its identity. [src-073] ## Where the case stands - Analysis: The case, United States v. Liaw, No. 1:26-cr-00100, is before Judge Edgardo Ramos in the Southern District of New York. The docket shows the indictment filed under seal on March 17, 2026 and unsealed on March 19; on April 1, 2026 Liaw and Sun were arraigned on all three counts and entered pleas of not guilty. A two-week jury trial first set for November 2, 2026 was reset at a June 10, 2026 status conference to March 29, 2027, and under an October 1, 2026 scheduling order the government's opposition to Liaw's pretrial motions under Rule 12 was due on October 20, 2026 and Liaw's reply on November 3, 2026. Liaw remained on bail, and no verdict had been reached on the charges against Liaw at the October 2026 cutoff. [src-068] - Analysis: The docket records the arrests of Liaw and Sun in the Northern District of California on March 19, 2026 but, through its last entry on October 15, 2026, no arrest, appearance or counsel for Ruei-Tsang “Steven” Chang, whom the Justice Department release described as remaining a fugitive. Chang has not appeared to answer the charges, which remain unproven allegations. [src-068] [src-007] - Analysis: Sun's case took a different course. On October 6, 2026 the court unsealed a superseding information — a charging document filed by prosecutors in place of the grand jury's indictment — that had been filed under seal on September 8, 2026 and charged Sun with four counts: conspiracy to violate the Export Control Reform Act, conspiracy to smuggle goods from the United States, conspiracy to defraud the United States by impeding the Commerce Department, and obstruction of justice for deleting an encrypted messaging application and its contents from Sun's phone on March 19, 2026. On October 8, 2026 Sun waived indictment and pleaded guilty to all four counts; sentencing is set for September 8, 2027, so no sentence has yet been imposed. [src-068] [src-069] - Analysis: The superseding information to which Sun pleaded guilty alleges that from about October 2023 Sun worked with others to divert to China servers of a U.S.-based manufacturer of AI and cloud servers, many of them assembled in the United States; that from about 2024 they used Company-1 in Southeast Asia as a pass-through to give the transactions the appearance of legitimate business and obscure the China-based end customers; that in July and August 2025 Sun helped stage dummy servers at warehouses rented by Company-1 to pass the manufacturer's August 2025 audit; and that in December 2025 Sun made misrepresentations to a Commerce Department officer during a post-shipment verification. Sun's plea admits the counts against Sun; it is not a court finding about Liaw or Chang, who have not been convicted. [src-069] [src-068] - Attributed: The superseding information to which Sun pleaded guilty alleges that from about October 2023 he worked with others to divert to China servers of a U.S.-based manufacturer of AI and cloud servers, many assembled in the United States; that from about 2024 they used Company-1 in Southeast Asia as a pass-through to give the transactions the appearance of legitimate business and obscure China-based end customers; that in July–August 2025 he helped stage dummy servers at warehouses rented by Company-1 to pass the manufacturer's August 2025 audit; and that in December 2025 he made misrepresentations to a Commerce Department officer during a post-shipment verification. [src-069] [src-068] - Qualification: Sun's plea admits the counts against him; it is not a court finding about the other defendants, who have not been convicted. - Outcome: Sun pleaded guilty on October 8, 2026; sentencing is set for September 8, 2027. ## Supermicro's response - Analysis: In a press release dated March 20, 2026, the day after the indictment was unsealed, Supermicro announced that Liaw had resigned from its Board of Directors effective immediately, leaving the board with eight directors and no change to its committee structure; the release did not state a reason and did not mention the indictment. Supermicro's press release of the same date announced the appointment of DeAnna Luna as acting Chief Compliance Officer; Luna had joined Supermicro in 2024 as Vice President of Global Trade & Sanctions Compliance after roles that included Director Global Export Licensing & Classification at Intel Corporation and Senior Director of Global Trade Compliance at Teledyne Technologies. [src-005] [src-041] [src-002] - Analysis: Supermicro's annual report for fiscal 2026 states that after the indictment it completed an independent investigation, jointly led by its lead independent director and the chair of its audit committee and conducted by Munger, Tolles & Olson LLP with AlixPartners LLP as forensic accounting consultant, covering the customer transactions in the indictment and a selection of other customers that bought restricted products. According to the company, the investigation found no evidence that any current member of senior management knew of the alleged diversion scheme, no direct sale of export-controlled products to known restricted parties or locations, and no basis to consider earlier financial statements unreliable; the company took personnel actions, including terminations, in its sales, technical support and business development functions, and the board adopted recommendations to strengthen export compliance. These are the company's own descriptions: the investigation report is not public, and the criminal case and government inquiries were continuing. [src-002] ## Sources - [src-007] U.S. Attorney’s Office, S.D.N.Y. press release: three charged with conspiring to unlawfully divert U.S. artificial intelligence technology to China, U.S. Department of Justice, 2026-03-19 - [src-068] Court record source · src-068 - [src-070] Court record source · src-070 - [src-002] Super Micro Computer, Inc. Form 10-K for the fiscal year ended June 30, 2026, U.S. Securities and Exchange Commission (EDGAR), 2026-08-31 - [src-069] Court record source · src-069 - [src-073] Media source · src-073 - [src-005] Super Micro Computer press release on the resignation of Yih-Shyan “Wally” Liaw and the appointment of an acting Chief Compliance Officer (Exhibit 99.2 to Form 8-K), U.S. Securities and Exchange Commission (EDGAR), 2026-03-20 - [src-041] SEC EDGAR filing index of Super Micro Computer, Inc.: Forms 8-K, October 2021 to October 2026, U.S. Securities and Exchange Commission (EDGAR)