The Department of Justice (DOJ) announced on Tuesday that two Chinese nationals have been charged with gathering intelligence about U.S. Navy bases and attempting to recruit Navy personnel for espionage.
The defendants, 38-year-old Yuance Chen and 39-year-old Liren “Ryan” Lai, are citizens of the People’s Republic of China (PRC) but live in Oregon and Texas, respectively.
Chen was described in the DOJ press release as a “legal permanent resident” of Happy Valley, Oregon, while Lai has been in Houston, Texas on a tourist visa since April 2025. His visa application said he only intended to stay for two weeks on business.
The defendants were arrested on June 27 and charged with “overseeing and carrying out various clandestine intelligence taskings in the United States on behalf of the PRC Government’s principal foreign intelligence service, the Ministry of State Security (MSS).”
“The MSS handles civilian intelligence collection for the PRC and is responsible for counterintelligence and foreign intelligence, as well as political security,” DOJ noted.
The criminal complaint said Lai recruited Chen to work for the MSS sometime in 2021. While the two were in Guangzhou, China in January 2022, they “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.”
A “dead drop” involves leaving a parcel in a hidden location, which the other party knows to search later. The sender and receiver do not interact directly. USNI News reported on Tuesday that Chen’s wife, who was not named in the charging documents, was directed to set up the dead drop of cash.
“Chen also allegedly provided pictures of U.S. Navy bases and ships. Chen sent Lai videos taken inside a U.S. Navy recruiting station, including one while discussing joining the Navy in both English and Chinese,” USNI News added.
Chen allegedly helped obtain information about Navy personnel from a recruiting station in California in 2022 and 2023 that was passed along to the MSS. The MSS trained Chen in how to “engage and recruit future Sailors,” and he allegedly did so, using social media.
“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 Pam 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,” she said.
“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,” said FBI Director Kash Patel.
“Adverse foreign intelligence services like the PRC’s Ministry of State Security dedicate years to recruiting individuals and cultivating them as intelligence assets to do their bidding within the United States,” warned Assistant Attorney General for National Security John A. Eisenberg.
Chinese Foreign Ministry spokeswoman Mao Ning denied all knowledge of the case during a press conference on Wednesday.
“I’m not familiar with the specifics, but we always oppose peddling the so-called ‘China spy’ narrative and will take necessary steps to defend the lawful rights and interests of Chinese nationals,” she said.
