Two Chinese nationals have been arrested and charged with acting as unregistered agents of the Chinese Communist Party in a federal case alleging espionage targeting U.S. military personnel and naval facilities. The Justice Department unsealed the complaint earlier this month, revealing an extensive counterintelligence investigation led by the FBI and NCIS.
Yuance Chen, 38, a legal permanent resident in Oregon, and Liren “Ryan” Lai, 39, who entered the U.S. on a tourist visa, are accused of operating covertly for China’s Ministry of State Security (MSS). Prosecutors allege the pair worked to infiltrate U.S. Navy facilities, recruit military personnel as intelligence assets, and pass sensitive information to Chinese handlers.
Attorney General Pam Bondi stated, “This case underscores the Chinese government’s sustained and aggressive effort to infiltrate our military and undermine our national security from within.”
Investigators say Chen traveled to a Navy installation in Washington state and a recruitment center in California in 2022 and 2023, collecting personal data on military recruits. He also reportedly initiated contact with a Navy employee via social media, feeding that contact’s information to Chinese intelligence.
Chen met MSS officers in Guangzhou, China, in 2024 and 2025, receiving payment and new instructions. One spy tactic used was a $10,000 “dead drop” cash exchange via a backpack left in a California locker—an espionage hallmark. Lai, meanwhile, is accused of overseeing on-the-ground intelligence operations while traveling through New Mexico, Arizona, and California under the guise of e-commerce business.
FBI Director Kash Patel praised the coordinated counterintelligence work that led to the arrests, saying, “The Chinese Communist Party thought they were getting away with their scheme to operate on U.S. soil. The FBI will continue to vigilantly defend the homeland.”
Chen and Lai were apprehended on June 27 in a multi-agency operation involving FBI field offices in four states and the Naval Criminal Investigative Service. Both men are charged with violating Title 18, Section 951 of the U.S. Code—operating as unregistered foreign agents—a charge carrying a maximum of 10 years in prison and a $250,000 fine.
