Two Chinese nationals face serious charges after allegedly acting as agents of the People’s Republic of China’s government to gather intelligence on US Navy service members and bases, as well as recruiting other military members to perform tasks for the country’s main foreign intelligence service, the Ministry of State Security (MSS).
The Department of Justice (DOJ) said Chinese national Yuance Chen, who lives in Happy Valley, Oregon, and Liren Lai, who visited Houston on a tourist visa in April 2025, were detained on Friday. Both men are accused of overseeing and carrying out numerous covert intelligence tasks in the United States on behalf of the Ministry of State Security.
The two individuals are accused of conducting a “dead drop” financial payment on behalf of the MSS, as well as assisting in the recruitment of potential MSS assets and gathering intelligence on military members and bases.
On Friday, the FBI arrested both men: Chen in Happy Valley and Lai in Houston, with assistance from the Naval Criminal Investigative Service.
“Today’s arrests reflect the FBI’s unwavering commitment to protecting our national security and safeguarding the integrity of our military,” FBI Director Kash Patel told Fox News Digital. “The individuals charged were acting on behalf of a hostile foreign intelligence service — part of the Chinese Communist Party’s broader effort to infiltrate and undermine our institutions. Thanks to outstanding coordination with our partners, including NCIS, we disrupted those efforts and sent a clear message: the United States will not tolerate espionage on American soil. Our counterintelligence operations remain focused, vigilant, and relentless.”
Citing a criminal complaint filed in the Northern District of California, the DOJ stated that the PRC government conducts espionage activities against the United States through various channels, including the MSS, which collects intelligence on civilians. The MSS is also in charge of foreign intelligence, counterintelligence, and political security.
The complaint claims that Lai recruited Chen to work for the MSS in 2021.
In January 2022, the two men were in Guangzhou, China, when they reportedly worked together to arrange for a $10,000 dead-drop payment on behalf of the MSS. The plan involves collaborating with individuals in the United States to leave a rucksack containing the cash at a day-use locker in Livermore, California.
Lai and Chen continued to work on behalf of the MSS following the cash drop payment and assisted in locating Navy personnel who could be willing to act on behalf of the MSS as well.
According to the DOJ, the two visited a US Naval facility in Washington State in 2022 and a Navy recruitment center in San Gabriel, California, in 2023.
While at the recruitment center, Chen allegedly photographed a bulletin board containing Navy candidates’ names, programs, and hometowns. The bulk of persons posted on the board identified their hometown as “China,” and the images looked to have been sent to an MSS intelligence officer in China, according to the DOJ.
The DOJ further claimed that the MSS instructed Chen on what to say to possible recruiters regarding MSS funding, preferred naval work assignments for potential recruits, and techniques to reduce Chen’s risk of being exposed.
According to the DOJ, Chen eventually began communicating with a Navy member on social media and arranged for the employee to tour the USS Abraham Lincoln in San Diego. According to the allegation, Chen also shared information about the employee with the MSS.
According to the allegation, Chen traveled to Guangzhou in April 2024 and March 2025 to meet with MSS intelligence personnel about remuneration for certain activities.
Lai also allegedly visited Houston in April 2025, claiming that the trip was for business purposes as an internet retailer. He also stated that he would be remaining in Houston for two weeks.
However, on May 9, 2025, more than four weeks after arriving in the United States, Lai was seen driving from Houston to California with a partner before returning to Junction, Texas, on May 15.
Chen and Lai have been charged with acting as foreign government agents in the United States without first notifying the attorney general. If convicted, both men face a $250,000 fine and up to ten years in prison.
“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,” said Assistant Attorney General for National Security John Eisenberg. “Under my leadership, the National Security Division will continue to defend our nation and neutralize our adversaries’ clandestine spy networks.”