Two Chinese nationals have been arrested and charged with acting as unregistered agents of the Chinese government in an alleged plot to spy on US military personnel and naval installations across the country, according to a federal complaint unsealed earlier this month.
The suspects, Yuance Chen, 38, a legal permanent US resident living in Happy Valley, Oregon, and Liren “Ryan” Lai, 39, who entered the US on a tourist visa in April, are accused of carrying out clandestine intelligence operations on behalf of the Ministry of State Security (MSS), China’s primary foreign intelligence agency.
According to federal prosecutors, their activities included facilitating covert payments for sensitive information related to US national security, attempting to recruit US Navy personnel as intelligence assets, and collecting data on military service members and recruitment facilities. “This case underscores the Chinese government’s sustained and aggressive effort to infiltrate our military and undermine our national security from within,” said Attorney General Pam Bondi. “We will expose foreign operatives, hold their agents to account, and protect the American people from covert threats to our national security.”
The FBI-led investigation revealed that in 2022 and 2023, Chen traveled to a US Navy installation in Washington state and a Navy recruitment center in San Gabriel, California. At the recruitment center, Chen allegedly obtained personal information about recruits and passed it along to Chinese intelligence. He also began cultivating a Navy employee through social media, feeding their details to the MSS.
According to court documents, the MSS provided Chen with instructions on how to recruit US sailors and minimize detection. Chen later met MSS officers in Guangzhou in 2024 and again in 2025 to discuss payments and new taskings. “The FBI arrested two Chinese nationals who were allegedly attempting to recruit US military service members on behalf of the PRC,” said FBI Director Kash Patel. “The Chinese Communist Party thought they were getting away with their scheme to operate on US soil, utilizing spy craft, like dead drops, to pay their sources. This case was a complex, coordinated effort and is an example of outstanding counterintelligence work done by FBI San Francisco, Portland, Houston, San Diego, and the Counterintelligence Division. The FBI will continue to vigilantly defend the homeland from China’s pervasive attempts to infiltrate our borders.”
One such “dead drop” occurred in January 2022, when Chen and Lai allegedly coordinated a $10,000 cash delivery at a recreational facility in Livermore, California, using a backpack left in a locker, a hallmark tactic of espionage tradecraft. Lai, who entered the country earlier this year on a tourist visa, claimed to be traveling for an e-commerce business. But prosecutors say his real mission was to oversee intelligence efforts on US soil. He was tracked traveling by car through New Mexico, Arizona, and Southern California, likely coordinating operations or scouting future targets before returning to Texas.
The arrests were made on June 27, 2025, during a multi-agency counterintelligence operation involving FBI field offices in San Francisco, Portland, Houston, and San Diego, along with assistance from the Naval Criminal Investigative Service (NCIS).
“NCIS and the Department of the Navy take the foreign intelligence gathering threat very seriously,” said NCIS Director Omar Lopez. “The PRC has for years attempted to recruit US service members as intelligence assets. We are committed to protecting the Navy’s critical warfighting capabilities.”
Chen and Lai are charged with violating Title 18, US Code, Section 951, operating as unregistered foreign agents, which carries a maximum sentence of 10 years in prison and a $250,000 fine.
“Adverse foreign intelligence services like the PRC’s Ministry of State Security dedicate years to recruiting individuals and cultivating them as intelligence assets to do their bidding within the United States,” Assistant Attorney General for National Security John A. Eisenberg said. “Under my leadership, the National Security Division will continue to defend our nation and neutralize our adversaries’ clandestine spy networks.”
The prosecution is being handled by the US Attorney’s Office for the Northern District of California, in partnership with the Justice Department’s National Security Division.
