Two nationals of China made their initial appearances in federal court in Portland, Oregon, and Houston, Texas, yesterday to face charges issued out of the Northern District of California for acting as agents of the Chinese government without prior notification to the attorney general.
The defendants, Yuance Chen, 38, a Chinese national and legal permanent resident who resides in Happy Valley, Oregon, and Liren “Ryan” Lai, 39, a Chinese national who traveled from China to Houston, Texas, on a tourist visa in April 2025, were arrested Friday on a criminal complaint charging them with overseeing and carrying out various clandestine intelligence taskings in the United States on behalf of the Chinese government’s principal foreign intelligence service, the Ministry of State Security (MSS).
These activities included facilitating a “dead drop” payment of cash for information related to the national security of the United States that had previously been 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.
Chen and Lai were arrested on June 27, 2025, by the FBI in Happy Valley, Oregon, and Houston, Texas, as part of a coordinated counterintelligence and law enforcement operation across multiple states.
“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. “The Justice Department will not stand by while hostile nations embed spies in our country – we will expose foreign operatives, hold their agents to account, and protect the American people from covert threats to our national security.”
“The FBI arrested two Chinese nationals who were allegedly attempting to recruit U.S. 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 U.S. soil, utilising spy craft, like dead drops, to pay their sources.”
As alleged in the criminal complaint unsealed yesterday, the Chinese government conducts intelligence activities against the United States through multiple arms, including the MSS. The MSS handles civilian intelligence collection for China and is responsible for counterintelligence, foreign intelligence, and political security.
The MSS and its bureaus seek to obtain information on political, economic, and security policies that might affect the PRC, along with military, scientific, and technical information of value to the PRC. The MSS and its bureaus are tasked with conducting clandestine and covert human source operations, of which the United States is a principal target.
As alleged in the criminal complaint, Lai recruited Chen to work on behalf of the MSS in or about 2021. While in Guangzhou, China, in January 2022, Lai and Chen worked together to facilitate a dead-drop payment of at least $10,000 on behalf of the MSS, working with other individuals located in the United States to leave a backpack with the cash at a day-use locker at a recreational facility located in Livermore, California.
Following the January 2022 dead drop, Lai and Chen continued to work on behalf of the MSS, including by attempting to identify potential assets for MSS recruitment within the U.S. Navy. For example, in 2022 and 2023, Chen was tasked by Lai to visit a U.S. Naval installation in Washington State and a U.S. Navy recruitment centre in San Gabriel, California.
While in the recruitment centre, Chen obtained personal information for recruits that he appears to have transmitted to an MSS intelligence officer in China. The complaint also alleges that Chen received instruction from the MSS on how to engage and recruit future Sailors and methods for minimising his risk of exposure.
Eventually, Chen began contacting a Navy employee over social media and provided information about the employee to the MSS. The complaint alleges that Chen travelled to Guangzhou and met with MSS intelligence officers in April 2024 and March 2025 to discuss compensation and specific taskings.
The complaint also alleges that Lai travelled to Houston, Texas, in April 2025, claiming that the purpose of his visit was related to his business as an online retail seller, and that he would be staying in the Houston area for two weeks.
However, on May 9, 2025 – more than four weeks after his arrival in the United States – Lai travelled by car with a companion from Houston to Southern California, via New Mexico and Tucson, Arizona, before returning to Texas on May 15, 2025.
Chen and Lai are charged with violating Title 18, United States Code, Section 951, which makes it a crime for a person to operate or agree to operate within the United States as an agent of a foreign government without notification to the Attorney General of the United States. If convicted, the defendants face a fine of up to $250,000 and a term of imprisonment of up to 10 years.
