FBI Arrests Two Chinese Nationals Disrupting Spy Ring Targeting U.S. Navy

Two Chinese nationals have been arrested and charged by the Department of Justice for “acting as agents of the Government of the People’s Republic of China (PRC) without prior notification to the Attorney General.”

Yuance Chen, 38,  and Liren “Ryan” Lai, 39, were arrested last Friday for “carrying out various clandestine intelligence taskings in the U.S. on behalf of the PRC’s…Ministry of State Security (MSS).”

Chen resides in Happy Valley, OR, and is a PRC national but a legal permanent resident.  Lai, however, has been in the U.S. on a tourist visa since April 2025.

The duo is accused of “facilitating a ‘dead drop’ payment of cash for information relating to” U.S. national security that was previously provided to the MSS.  They are also alleged to have been gathering intelligence on U.S. Navy servicemembers and bases, while also actively recruiting individuals within the U.S. military as “potential MSS assets.”

According to the press release, Lai recruited Chen sometime in 2021 to work on behalf of the MSS.  In Guangzhou, China in January 2022, the two worked to facilitate a dead drop payment of at least $10,000 that was left in a day-use locker at a recreational facility in Livermore, CA.

Following the payment, the two continued working to identify potential MSS assets in the U.S. Navy.  In 2022 and 2023, Lai tasked Chen obtained personal information of Navy sailors during a visit to a U.S. Naval installation in Washington state and a naval recruitment center in San Gabriel, CA.  This information was allegedly transmitted to MSS intel officers in China.

Lai traveled to Houston in April 2025 under the guise of being an online retail seller.  He claimed his stay was for two weeks, however, more than four weeks later, Lai was still in the U.S. and traveled from Houston to southern California on May 9th and returned to Texas on May 15th.

The two face up to 10 years in prison and up to $250,000 in fines.

FBI Director Kash Patel called it a “scheme to operate on U.S. soil, utilizing spy craft, like dead drops, to pay their sources.”

“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, utilizing spy craft, like dead drops, to pay their sources. This case was a complex, coordinated effort and is an example of outstanding counterintelligence work done by FBI San Francisco, Portland, Houston, San Diego, and the Counterintelligence Division. The FBI will continue to vigilantly defend the homeland from China’s pervasive attempts to infiltrate our borders.”

Two Chinese nationals were caught spying on our Navy and trying to recruit American service members for the CCP’s intel service.

Our FBI won’t stand for it. We tracked them, we stopped them, and we’re not done yet.

Espionage on U.S. soil will be met with full force. pic.twitter.com/VB6lQYuHWM

— FBI Director Kash Patel (@FBIDirectorKash) July 1, 2025

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