Chen and Lai Charged in U.S. Navy Spy Plot for China

WASHINGTON — Two Chinese nationals have been arrested and charged with conducting espionage operations on U.S. soil, including efforts to recruit U.S. Navy personnel, according to the Department of Justice (DOJ).

Yuance Chen, 38, a Chinese national and legal permanent U.S. resident from Happy Valley, Oregon, and Liren “Ryan” Lai, 39, who entered the U.S. on a tourist visa in April 2025, were arrested last Friday. Both men allegedly operated under the direction of China’s Ministry of State Security (MSS), Beijing’s main foreign intelligence agency.

“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 Pamela Bondi.

Dead Drops and Military Recruitment
According to the criminal complaint, Lai allegedly recruited Chen as a U.S.-based agent in 2021. In early 2022, they coordinated a $10,000 dead-drop payment on behalf of the MSS in Livermore, California, placing cash in a locker at a recreational facility.

From 2022 through 2025, Chen allegedly visited a U.S. Naval installation in Washington State and a Navy recruitment center in San Gabriel, California, gathering personal data of recruits. This information was then reportedly passed to MSS handlers.

Chen also allegedly used social media to contact a Navy employee and shared that contact with Chinese intelligence officers, whom he met in Guangzhou, China in April 2024 and March 2025, discussing task assignments and compensation.

Lai, who entered the U.S. claiming to be an online seller, traveled across the country during his extended stay, including a road trip from Houston to California via New Mexico and Arizona. Authorities allege this was part of his covert activities.

Charges and Penalties
Both Chen and Lai are charged with acting as agents of a foreign government without proper notification to the U.S. Attorney General—a felony offense punishable by up to 10 years in prison and a $250,000 fine.

FBI Director Kash Patel stated:

“The Chinese Communist Party thought they were getting away with their scheme to operate on U.S. soil, utilizing spy craft, like dead drops, to pay their sources.”

The Naval Criminal Investigative Service (NCIS) assisted the FBI in this operation.

Chen and Lai made their initial court appearances Monday in Portland, Oregon, and Houston, Texas, respectively.

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