Two Chinese nationals were arrested by the FBI on charges of spying on the U.S. Navy for China’s government.
One of the men, Yuance Chen, 38, a permanent resident of the U.S., stands accused of gathering intelligence at Navy facilities, recruiting other potential Chinese intelligence assets from the Navy, and facilitating a $10,000 dead-drop payment on China’s behalf.
The other man, Liren “Ryan” Lai, 39, allegedly acted as Chen’s point of communication to the Ministry of State Security, a Chinese foreign intelligence agency.
Both men were arrested on Friday by the FBI, which had been investigating their activities, according to a Justice Department press release. Lai, who typically operated out of China, had come to the U.S. in April on a temporary visa.
Chen was arrested in Happy Valley, Oregon, where he lives, while Lai was arrested in Houston. The two men face up to 10 years in prison and a fine of up to $250,000.
The criminal complaint, which relies on text messages between the two men obtained by the FBI, alleges that Lai first recruited Chen to work as a foreign agent in mid-2021.
Chen, who came to the U.S. on a visa in 2015, obtained permanent residence in 2019 after marrying his wife, according to the complaint.
After Lai approached Chen about the work, Chen is said to have traveled to Guangzhou, China, in Nov. 2021 to meet with MSS intelligence officers, staying until Jan. 2022.
In January, while still in China, Chen is alleged to have facilitated a dead-drop payment for the MSS by instructing his wife to leave a backpack with $10,000 in a locker at a “recreational facility” in California’s Bay Area. His wife’s name was withheld from the complaint.
The complaint alleges that the money was used to pay informants for intel on the U.S.
In exchange for the work, Chen appeared to negotiate a $1,500 payment with Lai, based on texts included in the complaint.
Starting in April 2022, Chen is alleged to have shared photos and videos of U.S. Navy sites.
These included surreptitiously taken inside of Navy Recruiting Station Alhambra, a recruitment center in California, as well as photos of Naval Base Kitsap-Bangor in Washington state, according to the complaint.
A set of the videos Chen sent to Lau in 2022 showed a Naval recruitment officer discussing the benefits of enlisting in the Navy. Lau, seemingly impressed, allegedly replied, “You were able to get that!”
In 2023, Chen was able to transmit a photo of a recruitment board showing the personal information, including names and hometowns, for recent Navy enlistees, many of whose hometowns were listed as “China.”
This information would be useful to the MSS as a way to recruit intelligence assets within the U.S. Navy, according to the complaint.
Later that year, Chen helped recruit people who planned to enlist in the Navy as assets for the MSS, the complaint alleges.
Texts show Chen discussing the operation with a person who the FBI believed was an MSS officer. The conversation touched on potential $15,000 payments to the recruits and whether or not they can pass a polygraph test.
In Jan. 2025, Chen was able to arrange a tour of the USS Abraham Lincoln, a Navy aircraft carrier, and allegedly sent photos and a video from aboard the ship to a suspected MSS official.
A photo included in the complaint allegedly shows Chen on the ship’s deck, alongside a Navy employee, his wife, and a child.
Asked for comment on the arrests, the Justice Department directed the Daily Beast to a Tuesday press release.
In the release, FBI director Kash Patel, appointed by President Donald Trump earlier this year, touted the arrests as a victory.
“The FBI arrested two Chinese nationals who were allegedly attempting to recruit U.S. military service members on behalf of the PRC,” he 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.”
Trump’s attorney general, Pam Bondi, struck a similar tone in the release.
“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.
Julie Vandiver, the federal public defender representing Chen, told the Beast that her office’s policy is not to comment on criminal cases.
Information on Lai’s attorney is not yet publicly available.
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