A Chinese-born Canadian citizen who lives in Mississauga, Ont., was arrested in Virginia by the FBI and charged with trying to smuggle restricted high-tech Nvidia computer chips used in AI processing to China

U.S. authorities seized export-controlled technology worth about $30 million that was addressed to an air freight facility in Mississauga, close to Toronto Pearson International Airport, according to allegations filed in court.

Nvidia labels on the components had been removed and replaced with labels for a fake company, authorities said.

The arrest of Benlin Yuan, of Mississauga, immediately west of Toronto, and the large shipment destined for Toronto are part of Operation Gatekeeper, described by U.S. authorities as targeting “a sophisticated illicit procurement conspiracy and smuggling network that orchestrates buying and exporting controlled high-tech computer chips to China.”

Yuan is described in U.S. prosecution documents as president of an information technology company based in Virginia that provides data centre services and IT support and consulting in Canada and the United States. The documents say it is a subsidiary of a Chinese company based in Beijing.

He was arrested in Sterling, Virginia, on Nov. 28 and charged with conspiring to violate export control acts.

The network is accused of purchasing at least US$50 million worth of GPUs from a large U.S. technology company.

The computer products Yuan is alleged to be involved in exporting are Nvidia A100, H100, and H200 Tensor Core graphic processing units, known as GPUs, and HGX baseboards. The equipment is used in artificial intelligence (AI) applications and in high-performance computing. The chips can handle huge amounts of data that is needed in AI applications, an exploding field that is revolutionizing technology.

The GPUs can perform calculations at higher speeds than most previous computers.

Since about November 2023, a Chinese company has worked to import these chips from the United States, prosecutors allege. The entire plot is alleged to have involved US$160 million in tech goods.

Yuan is accused of joining the conspiracy this spring.

In a criminal complaint sworn by a special agent in the U.S. Department of Commerce, Yuan helped buy the technology using straw purchasers and intermediaries, meaning in the name of a person or company that is not the real end buyer.

The buyers allegedly declared the goods were for use by customers within the United States or in countries that do not require an export licence, including Taiwan and Thailand.

At various U.S. warehouses, Nvidia labels were allegedly removed from the computer circuits and relabeled with a fake manufacturing brand of SANDKYAN, according to the criminal complaint against Yuan.

When preparing the items for export, the shipping paperwork misclassified the products as harmless and unrestricted pieces of tech: “adapters,” “adapter modules,” and “computer controllers,” authorities claim.

They were then shipped, directly or indirectly, to China.

Investigators received a tip about pallets of suspicious GPUs at a New Jersey warehouse that were addressed to companies in China.

An undercover agent was sent inside, where he spent an hour.

The agent allegedly saw two engineers who appeared to be of Chinese origin unboxing Nvidia components. One of the engineers spoke to the undercover agent in Mandarin, documents say. The engineers said they had to cover up all of the Nvidia branding on the equipment for “export purposes,” court filings allege.

The agent watched Nvidia labels being pulled off and new ones for the fake firm put in their place. The next day the agent returned and found the boxes had been resealed. The products were now labeled as having been “Made in Taiwan.”

Not only were those packages addressed for shipping to Toronto, but warehouse employees told agents they recently had several similar tech exports to Canada.

The packages were removed and secured in a government warehouse. That sparked a flow of complaint calls and demand letters about the missing GPUs. The people expecting the goods believed the undercover officer had stolen the products and started negotiating to have them returned, authorities allege.

They offered $1 million to get their packages back, but insisted the equipment be inspected before payment was made.

Yuan is accused of organizing the “inspection.”

He is accused of recruiting and arranging the group of inspectors and of being one of the six who arrived to examine the packages, about two weeks after the seizure, court filings allege.

The inspection arrangements were allegedly planned in a group chat using an encrypted communication app and confirmed later over a video conferencing app.

Yuan was told by a high-level representative of the buyer in China to make sure no one said the items were destined for China, according to the criminal complaint. He is accused of helping them develop an elaborate “compliance backstory” to justify the products based on false information.

They also allegedly discussed how to make the million-dollar payment and Yuan was told to send copies of the driver’s licences of everyone on the inspection team. Three trucks were arranged for the pick up.

He is also accused of handling the storage of a different shipment of Nvidia products destined for China. A cooperating witness for U.S. prosecutors alleged that Yuan told him not to put fake labels on this one as he thought they looked suspicious; he would rather the Nvidia labels just be removed.

Alexander Blanchard, a Virginia-based lawyer for Yuan, declined to comment about Yuan or the case when asked by National Post.

“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 Nicholas Ganjei, U.S. Attorney 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.”

U.S. regulation restricts the export of items that could make a significant contribution to the military potential of other nations or could be detrimental to the foreign policy or national security of the United States.

Advanced computing integrated circuits, including certain Nvidia-manufactured GPUs were added to the export restriction list in 2022. Some of the latest Nvidia chips have been classed by the U.S. as “critical technologies” that China could use to “modernize its military capabilities in ways that threaten the national security interests of the United States and its allies,” according to export regulations.

The chips require a special licence to export to China.

On Monday, the same day Operation Gatekeeper was announced, U.S. President Donald Trump said the United States will allow Nvidia’s H200 processors to be exported to China with a 25 per cent fee.

Alan Hao Hsu, also known as Haochun Hsu, 43, of Missouri City, Texas, and his company both pleaded guilty to smuggling and unlawful export activities in October as part of Operation Gatekeeper.

Newly unsealed court documents say Hsu received more than US$50 million in wire transfers from China to help fund the scheme. He is scheduled for sentencing in February.

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

Five unnamed co-conspirators are linked to IT companies based in Hong Kong or Shenzhen, a city on the Pearl River that acts as a bridge between Hong Kong and mainland China.

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The latest annual report from real estate company Royal LePage is forecasting a modest hike in home prices of one per cent by the fourth quarter of 2026. But that overall figure is hiding a significant drop in two of Canada’s most expensive cities, Toronto and Vancouver.

Calling 2026 “a crucial reset year for Canada’s housing market,” the Royal LePage

Market Survey Forecast

predicts that the average price of a home in Canada is expected to rise to $823,016 in the fourth quarter of 2026. That figure includes single-family detached properties, which are expected to rise two per cent to $876,934, and condominiums, which are anticipated to decrease 2.5 per cent to $563,918.

Also hiding in the overall average are gains and losses in individual markets. For instance, the average home price in the greater Toronto area is expected to fall 4.5 per cent next year, while greater Vancouver is expected to see a drop of 3.5 per cent.

Montreal, on the other hand, is forecast to rise five per cent. And Quebec City is forecast to see the highest gains among all major regions in 2026, with the average home price expected to rise 12 per cent.

“Solid market fundamentals — including lower interest rates, increased supply, and reduced competition — have created a more favourable environment for consumers,” said Phil Soper, president and CEO of Royal LePage, in announcing the figures.

“First-time buyers and those searching in the country’s most expensive regions have a rare window to act on their home ownership plans at reduced prices.”

This year saw a lowering of interest rates, as the Bank of Canada reduced its target for the overnight lending rate four times.

The prime rate

that banks use to set mortgage rates is now at 4.45 per cent.

The Royal LePage report notes that, after an 18-month rate-cutting cycle following two-decade-high interest rates, “the Bank has now shifted its focus to supporting a cooling economy while keeping inflation on a sustainable path.” It adds that economists widely expect the Bank of Canada will only make further cuts if the economy shows major signs of weakness as Canada continues to navigate trade tensions with the United States.

“Mortgage rates are no longer the villain in this story,” said Soper. “Borrowing costs have stabilized at a level that supports healthy market activity. Buyers can move forward without worrying they are missing out on cheaper money tomorrow. That clarity alone will unlock demand.”

In a survey

conducted this summer

, Royal LePage found that, of renters who were holding off on buying a property, 40 per cent said they were waiting for housing prices to fall, while 29 per cent said they were delaying until interest rates declined.

Outside of Toronto and Vancouver,

every major market

is expected to see an increase in home prices, although in each case it will be driven more by single-family detached dwellings, where the price hike will outstrip that for condos.

In Quebec City, for instance, the overall expected rise of 12 per cent was driven by a five per cent increase in condo prices but a 14 per cent rise in detached homes. In Montreal, the overall rise of five per cent included a six per cent jump in detached homes and a more modest 2.5 per cent climb in condo prices. And in Halifax, an overall increase of two per cent comprised a four per cent rise in detached homes but a two per cent drop in condominium prices.

In other markets, Calgary and Winnipeg are forecast to see the smallest jump in prices, at 1.5 per cent, followed by Edmonton and Ottawa (two per cent) and Regina at four per cent.

Soper applauded the government’s commitment to housing and infrastructure projects in the latest federal budget, but said it remained to be seen how those decisions would play out.

“If Ottawa follows through, 2026 could be the year we start to see long-promised initiatives turn into real progress for the Canadian real estate industry.” he said.

He added: “2026 will be a transition year for Canada’s housing market, as improved affordability and less competitive conditions continue to favour buyers. We expect activity to build slowly over the next several months, and if the spring market coincides with steadier economic and trade conditions, buyer confidence could strengthen in tandem.”

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OTTAWA — After a week of delays and uncertainty, the Liberals say a deal is back on the rails with the Bloc Québécois to remove religious exemptions from Canada’s hate-speech laws in exchange for support to help pass the government’s bill targeting hate and terror symbols.

A senior government source confirmed to National Post that the Liberals on the House of Commons justice committee, which is currently doing a clause-by-clause study of Bill C-9, are expected to support a Bloc amendment to the legislation that will remove the controversial exemption during a Tuesday afternoon meeting.

“Anything can happen at committee, but… we’ll be voting for it,” said the source about the Bloc amendment. They were granted anonymity to discuss inter-party negotiations freely.

Last week, National Post reported that the Bloc and Liberals had struck a deal that would see the government approve an amendment to Bill C-9 that removes the religious exemption for willful promotion of hate from the Criminal Code. In exchange, the Bloc committed to supporting the bill through the House of Commons.

A deal with the Bloc is likely the only way the Liberals can get the bill through committee, as the Conservatives have vowed to oppose it.

But after the report, the deal appeared suddenly to be on shaky ground as both meetings of the Justice committee last week where the amendment was expected to be debated were either cancelled or suspended by the Liberals.

Liberal committee chair

James Maloney said at the time

he cancelled the meeting to allow MPs to “regroup and find a path forward” as “emotions were running high.” At the same time, the government faced a groundswell of opposition to the amendment by various Muslim, Christian and civil rights groups.

After the second planned committee meeting last week was cancelled at the last minute, the Bloc Québécois accused the Liberals of reneging on a deal they said originally came from Justice Minister Sean Fraser himself.

More to come…

National Post

cnardi@postmedia.com

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OTTAWA

— Federal Justice Minister Sean Fraser tabled a new crime bill on Tuesday, seeking to stiffen punishments for offences committed against children and women, while also proposing to restore mandatory minimum sentences for a slew of offences. 

The 167-page bill includes proposals to criminalize a pattern of behaviour seen in abusive relationships known as “coercive control,” and also declare that when a woman is murdered in the context of a controlling intimate partner relationship, which could include sexual violence and hate, that homicide be regarded as first-degree murder.

The change also includes referring to these murders as “femicide,” which was a promise that Prime Minister Mark Carney made during the spring election campaign.

The bill also fulfills his campaign commitment to include as part of the offence against the non-consensual distribution of intimate images, those which are “a visual representation” of someone that could be mistaken as real, which refers to the practice of using generative AI to make what are commonly known as sexualized “deepfakes.”

The legislation also seeks to respond to a recent Supreme Court ruling that struck down the one-year mandatory minimum sentences for the access and possession of child-sex abuse images, known as child pornography.

The Opposition Conservatives and other critics decried the top court’s decision at the time, calling on Fraser to use the notwithstanding clause in the Charter to allow the Liberal government to uphold the minimum sentencing requirement.

Tuesday’s bill responds by trying to safeguard remaining mandatory minimum sentences and include a change that states courts may allow an offender to serve less time, “but only if the mandatory minimum term of imprisonment would amount to cruel and unusual punishment,” for that specific offence.

The legislation also proposes to try addressing the issue of court cases being tossed due to an accused’s right to a trial not being met within a reasonable timeframe by directing that courts consider other options rather than granting a stay of proceedings.

The Canadian Civil Liberties Association released a statement on Tuesday, saying the bill attempts to overturn “

nearly 40 years of Supreme Court precedent” and removes the “strongest constraint requiring the justice system to run on time.”

“The federal government’s proposal to gut the (Charter right)
to be tried in a reasonable time is unconstitutional and punts the hard work of resolving delay,” Shakir Rahim, who directs the association’s criminal justice program, said in a statement. 

National Post

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A Nunavut judge knocked nearly two years off the sentence for an Inuit man convicted of trying to choke a woman to death because she stood up for his abused sister-in-law, citing his Indigenous status, mental illness and the fact that a shorter sentence would not require him to leave Canada’s northernmost territory to serve the remainder of his time behind bars.

Laimiki Toonoo was sentenced in the Nunavut Court of Justice to eight years and two months in prison for the attempted murder of Ovilu Saila.

“Given that this case involved a conviction after trial, the Crown submission of 10-12 years was reasonable and appropriate. Indeed, I would have imposed a sentence of 10 years if it was not for the mitigating factors of Laimiki’s major mental illness, his significant Gladue factors, and the fact that a territorial term going forward was within the range of sentence given his lengthy pre-trial custody, and that that form of sentence made a lengthy probation order available,” Justice Christian Lyons wrote in a recent decision out of Iqaluit.

Gladue principles were set out in a Supreme Court of Canada decision over a quarter century back and indicate sentencing judges must consider the unique circumstances of Indigenous offenders, as well as systemic issues like the impact of residential schools, to address the over-representation of Indigenous people in Canada’s prisons.

“Laimiki’s assault on Ovilu was unprovoked, and senseless. In a cowardly display, Laimiki and his brother, Archie, two grown men under the influence of alcohol, attacked a sober Ovilu because she stood up for Archie’s spouse after Archie became abusive towards her,” Lyons said.

“The attack was lengthy and persistent and took place in the presence of Archie’s spouse and their four young children.”

The court heard that Laimiki “choked Ovilu for many minutes and managed to do so despite a spirited effort from Ovilu to defend herself,” said the decision, dated Dec. 3.

“Ovilu eventually became unconscious due to the choking and Laimiki continued choking her with the intent to kill her. While he did this, Archie told Laimiki to stop, but Laimiki said he would not, because Ovilu was not dead yet, and was still breathing.”

Laimiki then told his brother they “could hang Ovilu, and Archie again told him to stop. There was further discussion between Archie and Laimiki about hanging Ovilu, and Laimiki said they could hang Ovilu and pretend that she hung herself,” said the decision.

“Laimiki then tied a phone charger cord tightly around Ovilu’s neck and then tied a scarf to the cord. The purpose of this was to attach something long enough to her neck so she could be hung from a heavy bolt embedded in a wooden beam above her head. He then applied sufficient force to the cord to snap it. Whether or not she was actually hung is unknown.”

Ovilu “regained consciousness sometime after the cord snapped and Laimiki continued to attempt to assault her as Archie was on the phone with the police reporting that a woman was hanging,” said the decision.

“Laimiki then fled, and Ovilu was able to escape the home, and went immediately to the RCMP detachment with the cord still tied tightly to her neck.”

The 2021 attack in Kinngait, a Dorset Island hamlet, left Ovilu with “significant swelling and bruising to her face, a cord indentation around her neck, and redness and scratches to her neck area,” said the decision. “It also had a deep emotional impact on her.”

Laimiki Toonoo has a criminal record with 14 convictions spanning from 2017-2021, said the decision, which notes three are for violent offences.

“This is a significant criminal record for a man who was only 23 years old when he went into custody for the attack on Ovilu, and it spans his entire adult life up until that point,” Lyons said. “I further note that in 2023, a year and a half after being incarcerated, he was released on bail, only to be arrested 12 days later on new, unrelated charges, and remanded back into custody.”

Laimiki Toonoo “has experienced significant trauma and loss, and has had a difficult life,” said the judge.

“He has a long-standing diagnosis of post-traumatic stress disorder, which is the result of what was described in the records, as a ‘chaotic childhood,’” said the judge.

“His father died when he was eight years old, and it is clear that this has had a significant impact on Laimiki.”

After his father died, Laimiki told the court he was on his own. He “called himself an ‘abandoned kid,’ staying variously with his mother and at friend’s homes,” said the decision.

One of his brothers died by suicide and another drowned, said the decision.

“Laimiki is an Indigenous man, and these life experiences are significant Gladue factors that are mitigating on sentence,” said the judge.

Laimiki Toonoo sometimes experiences “auditory hallucinations” that “urge him to harm others,” said the decision. “A month after his attempted murder of Ovilu, Laimiki broke his hand punching another inmate, and it was said that he did so in response to an auditory command hallucination.”

Since attacking another inmate in 2021, “Laimiki has been stabilized in custody, as he has been medicated and kept free from alcohol and illicit drug use,” said the decision.

Laimiki has been in custody since the attempted murder, “save for the 12 days he was released on bail in 2023, and therefore has credit for more than four years in jail,” Lyons said.

His defence lawyer asked for a six-year sentence, which would have worked out to time served when the enhanced credit for pre-sentence custody was taken into account.

The Crown argued that “given the aggravating factors, and Laimiki’s high risk of reoffending, that a penitentiary term going forward is necessary. They argue that such a sentence would more effectively protect the public from Laimiki as he would be separated from society for a longer period, and more likely to be rehabilitated.”

But the remainder of his sentence is two years less a day, which allows him to serve it in Nunavut.

“The imposition of a territorial sentence allows me to put Mr. Toonoo on a lengthy probation order following his release, that requires him to meet with mental health workers, and psychiatrists, and to not drink alcohol or consume illicit drugs,” Lyons said. “This would not be an available option to me if I were to impose a further federal sentence of two years or more.”

He’s getting “effective treatment for his mental illness and has a level of comfort there,” the judge said of the Iqaluit jail.

“He reported feeling more alive in custody, and that he has learned to respect others. He is surrounded by other Inuit, and is much closer to home, and has access to programs.”

Toonoo’s brother, Archie, was sentenced to two years of probation last month for his role in the attack.

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