Two Chinese nationals charged with spying on US Navy for Beijing's intelligence agency

United States authorities have charged two Chinese nationals with operating as unregistered agents for China’s Ministry of State Security (MSS), accusing them of conducting intelligence activities aimed at US military personnel and installations. According to a statement by the US Department of Justice (DOJ) on 1 July 2025, the accused, Yuance Chen, 38, and Liren “Ryan” Lai, 39, allegedly attempted to recruit US Navy service members and deliver national security information to Chinese intelligence. The DOJ stated that both individuals were arrested on 27 June in a coordinated law enforcement operation spanning multiple states. Chen, a legal permanent resident of the US living in Happy Valley, Oregon, and Lai, a Chinese national who entered the US on a tourist visa in April 2025, made initial court appearances in Portland, Oregon, and Houston, Texas, respectively. They are charged under Title 18, United States Code, Section 951, for operating as agents of a foreign government without prior notification to the US Attorney General. If convicted, they face up to 10 years in prison and a US$250,000 fine.

Use of covert spy techniques and attempted recruitment efforts

The DOJ alleges that Lai recruited Chen in 2021 to act on behalf of the MSS. In January 2022, the pair orchestrated a "dead-drop" transaction involving at least US$10,000 in cash placed in a locker at a recreational facility in Livermore, California. This payment was reportedly in exchange for US national security information that had already been transferred to the MSS. Following this event, they continued their espionage efforts. Chen was allegedly instructed to visit a US Navy base in Washington State and a Navy recruitment centre in San Gabriel, California. At the recruitment centre, he obtained personal data on new recruits and is suspected of transmitting this information to an MSS officer in China.

Contact with Navy employee and overseas meetings with MSS

The complaint further alleges that Chen contacted a US Navy employee via social media and relayed details to MSS handlers. In April 2024 and March 2025, Chen reportedly travelled to Guangzhou, China, to meet with MSS officers and discuss compensation and assignments. He also received guidance on how to approach potential Navy recruits and reduce his risk of exposure.

Suspicious travel patterns and surveillance operations

Lai, who initially declared business reasons for entering the US, reportedly stayed beyond his expected period. He travelled by car from Houston to Southern California through New Mexico and Arizona, accompanied by an unidentified person, before returning to Texas on 15 May 2025. US authorities believe these movements were related to intelligence-gathering activities.

Officials highlight growing foreign espionage threats

Attorney General Pamela Bondi stated, “This case underscores the Chinese government’s sustained and aggressive effort to infiltrate our military and undermine our national security from within.” FBI Director Kash Patel said, “The Chinese Communist Party thought they were getting away with their scheme to operate on US soil, utilising spy craft, like dead drops, to pay their sources.” John Eisenberg, Assistant Attorney General for National Security, warned of the long-term efforts by the MSS to cultivate agents within the United States.

Chinese embassy responds to accusations

In response, Chinese Embassy spokesperson Liu Pengyu told Reuters that he was unaware of the case specifics but dismissed the allegations as “assumptions and speculations.” He also accused the United States of hypocrisy regarding its global intelligence activities. The investigation was led by the FBI San Francisco Field Office, with support from field offices in Portland, Houston, and San Diego, as well as the Naval Criminal Investigative Service (NCIS). The DOJ confirmed that prosecutions are being handled by its National Security Division and U.S. Attorney’s Office for the Northern District of California. Further proceedings against Chen and Lai are expected in the coming weeks.