Two Chinese nationals were charged with acting as foreign agents and spying on the U.S. Navy in an attempt to gather intelligence and enlist other agents, according to a Department of Justice release.
Yuance Chen, 38, and Liren “Ryan” Lai, 39, appeared in federal court June 31 to face charges issued by the Northern District of California regarding illegal clandestine activities on behalf of the Ministry of State Security, China’s primary intelligence agency.
“These activities included facilitating a ‘dead drop’ payment of cash for information relating to the national security of the United States previously provided to the MSS, gathering intelligence about U.S. Navy service members and bases, and assisting with efforts to recruit other individuals from within the U.S. military as potential MSS assets,” the release read.
Chen is a legal permanent resident in Happy Valley, Oregon, while Lai traveled to Houston, Texas, on a tourist visa in April 2025.
They were both arrested June 27 by the FBI in their respective locations.
FBI San Francisco led the investigation, with collaboration from FBI offices in Portland, Houston and San Diego, as well as the Naval Criminal Investigative Service.
“This case underscores the Chinese government’s sustained and aggressive effort to infiltrate our military and undermine our national security from within,” Attorney General Pamela Bondi said.
After Lai recruited Chen to work with the MSS around 2021, the two began identifying human targets in the U.S. Navy to recruit for the intelligence agency, the release said.
They both conducted a dead-drop payment of at least $10,000 for the MSS in January 2022, coordinating with U.S. individuals.
In 2022 and 2023, Chen visited a U.S. Naval installation in Washington, as well as a Navy recruitment center in San Gabriel, California, gathering information on potential recruits that he sent back to the MSS, according to the Department of Justice.
Chen went so far as to contact a Navy employee on social media and provide specific information about that employee to the MSS, who instructed Chen how to best proceed in his attempts to solicit the person for MSS recruitment.
Chen traveled to Guangzhou, China, to coordinate compensation and mission specifics with MSS in April 2024 and March 2025, the department alleges.
The criminal complaint also alleges that Lai lied about the length and intention of certain travels within the U.S. in April 2025, the Department of Justice said.
Chen and Lai are charged with operating within the U.S. as foreign agents without notifying the Attorney General of the United States — an illegal act.
If convicted, the defendants could face up to 10 years in prison and a fine of up to $250,000.
Riley Ceder is a reporter at Military Times, where he covers breaking news, criminal justice, investigations, and cyber. He previously worked as an investigative practicum student at The Washington Post, where he contributed to the Abused by the Badge investigation.
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