Two Chinese nationals charged with spying in effort to recruit Navy members: Justice Department

Two Chinese nationals have been charged with spying in the U.S. for their country in an effort to recruit members of the U.S. Navy, according to the Justice Department.

The DOJ announced Tuesday that Yuance Chen, 38, a Chinese national and legal permanent resident who resides in Happy Valley, Ore., and Liren “Ryan” Lai, 39, a Chinese national who traveled from China to Houston on a tourist visa in April, were arrested Friday on charges that they oversaw and carried out various clandestine intelligence operations in the U.S. on behalf of the Chinese government's main foreign intelligence service, the Ministry of State Security.

Chen and Lai made their initial appearances in federal court on Monday in Portland, Ore., and Houston, respectively.

“This case underscores the Chinese government’s sustained and aggressive effort to infiltrate our military and undermine our national security from within,” Attorney General Pamela Bondi said. “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.”

According to the criminal complaint, Lai allegedly recruited Chen to work on behalf of the MSS in 2021. In January 2022, while in Guangzhou, China, they both allegedly worked together to facilitate a dead-drop payment of at least $10,000 on behalf of the MSS. They worked with other individuals in the U.S. to leave a backpack with the cash in a locker at a recreational facility in Livermore, Calif., the DOJ claims.

After the so-called dead drop, Lai and Chen allegedly attempted to help the MSS identify potential assets for recruitment from within the U.S. Navy. In 2022 and 2023, Lai tasked Chen with visiting a U.S. Naval installation in Washington State and a U.S. Navy recruitment center in San Gabriel, Calif., according to the DOJ. At the recruitment center, Chen allegedly obtained personal information of recruits that he appears to have transmitted to an MSS intelligence officer in China.

According to the complaint, the MSS gave Chen instructions on how to engage and recruit future sailors and methods for minimizing his risk of exposure. Chen allegedly began contacting a Navy employee over social media, then provided information about the person to the MSS. He also traveled to Guangzhou and met with MSS intelligence officers in April 2024 and March 2025 in order to discuss compensation and specific taskings, the complaint says.

Lai traveled to Houston in April 2025, allegedly claiming that his visit was related to his business as an online retail seller, and that he would be staying in the area for two weeks. However, in May, more than four weeks after his arrival in the U.S., he traveled by car with a companion from Houston to Southern California, via New Mexico and Tucson, Ariz., before returning to Texas four days later.

Chen and Lai are charged with operating or agreeing to operate within the U.S. as an agent of a foreign government without notifying the attorney general. The penalty, if convicted, includes a fine of up to $250,000 and a term of imprisonment of up to 10 years.

“The FBI arrested two Chinese nationals who were allegedly attempting to recruit U.S. military service members on behalf of the PRC,” FBI Director Kash Patel said in a statement. “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.”

The Naval Criminal Investigative Service also assisted with the FBI operation.