In a case that highlights growing concerns over foreign intelligence operations targeting the United States military, two Chinese nationals have been charged with espionage and acting as unregistered foreign agents on behalf of China’s Ministry of State Security (MSS), the country’s primary intelligence agency.
According to a release from the U.S. Department of Justice, the individuals allegedly carried out clandestine activities including intelligence gathering on U.S. Navy personnel and facilities, dead-drop cash exchanges, and efforts to recruit other U.S. military members into foreign intelligence service.
Yuance Chen, 38, a legal permanent resident living in Happy Valley, Oregon, and Liren “Ryan” Lai, 39, who entered the U.S. on a tourist visa in April 2025, were arrested on June 27 by FBI agents operating in Portland and Houston, respectively.
The two appeared in federal court on June 31 to face charges filed by the Northern District of California.
Here's What They're Not Telling You About Your Retirement
“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 Justice Department’s statement read.
Liren Lai and Yuance Chen allegedly facilitated “dead drop” payments for U.S. national security info, contacted a Navy employee over social media, and even photographed bulletins containing names, programs, & hometowns of recent USN recruits.
— FBI Houston (@FBIHouston) July 1, 2025
More here: https://t.co/1gEYUU5Ndv pic.twitter.com/8ov06Rr6H2
The investigation was led by the FBI’s San Francisco office, with crucial support from FBI field offices in Portland, Houston, and San Diego, along with the Naval Criminal Investigative Service (NCIS).
“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.
This Could Be the Most Important Video Gun Owners Watch All Year
Her remarks emphasize the severity of the threat posed by foreign intelligence operations operating inside the U.S. and targeting national defense structures.
According to the complaint, Lai began working with the MSS around 2021 and brought Chen into the operation shortly afterward.
Two Chinese nationals, Yuance Chen, 38, a legal permanent resident of Oregon, and Liren “Ryan” Lai, 39, who entered the U.S. on a tourist visa in April 2025, were arrested Friday by the FBI and Naval Criminal Investigative Service for allegedly acting as unregistered agents of… pic.twitter.com/esSGitdBjR
— Vanguard Intel Group 🛡 (@vanguardintel) July 1, 2025
The two allegedly collaborated to identify individuals within the U.S. Navy who might be vulnerable or susceptible to recruitment by Chinese intelligence.
The complaint further details a “dead drop” — a covert method used by spies to pass information or resources — in which Chen and Lai facilitated the delivery of at least $10,000 in cash to a U.S.-based individual on behalf of the MSS in January 2022.
Their mission: to reward past cooperation and possibly encourage continued or expanded intelligence sharing.
Chen’s espionage-related activities extended into 2022 and 2023. During that time, he visited a U.S. Naval installation in Washington and a Navy recruitment center located in San Gabriel, California.
While at these sites, Chen collected information on Navy personnel and prospective recruits, which he then funneled back to his handlers at the MSS.
The DOJ further alleges that Chen used social media to contact a Navy employee, providing personal and professional information about the individual to Chinese intelligence.
MSS operatives subsequently advised Chen on how to approach and potentially recruit the individual to work as an asset.
To coordinate operational details and compensation, Chen traveled to Guangzhou, China in both April 2024 and March 2025, meeting directly with MSS officers. These meetings, according to prosecutors, were critical for refining intelligence priorities and logistics.
Meanwhile, Lai is accused of misleading U.S. authorities regarding his travel plans and intentions during his stay in the United States in April 2025, an indication of ongoing operational cover and obfuscation tactics.
Both men are charged with acting as foreign agents without notifying the U.S. Attorney General, a violation of federal law that carries serious consequences. If convicted, Chen and Lai face up to 10 years in prison and a maximum fine of $250,000.
The arrests come at a time of heightened scrutiny over espionage and foreign influence operations within the United States, particularly those originating from China.
Officials view the case as a troubling but not isolated example of a broader intelligence threat to U.S. national security.
The Department of Justice emphasized that investigations are ongoing and more individuals could potentially be identified or charged in connection with the espionage effort.
As the U.S. bolsters its counterintelligence posture, this case sends a clear signal: foreign operatives operating within the United States and targeting the nation’s military infrastructure will be identified and prosecuted to the fullest extent of the law.
Join the Discussion
COMMENTS POLICY: We have no tolerance for messages of violence, racism, vulgarity, obscenity or other such discourteous behavior. Thank you for contributing to a respectful and useful online dialogue.