WASHINGTON, D.C. – Two Chinese nationals have been arrested and charged with acting as illegal agents of the People’s Republic of China (PRC), in connection with a clandestine espionage operation targeting U.S. Navy personnel, military installations, and recruitment centers.

The U.S. Department of Justice announced the arrests on Friday, underscoring heightened concerns over foreign intelligence threats posed by the PRC’s Ministry of State Security (MSS).

The individuals, identified as Yuance Chen, a resident of Happy Valley, Oregon, and Liren Lai, who entered the United States on a tourist visa in April 2025, were taken into custody by the FBI, with assistance from the Naval Criminal Investigative Service (NCIS). Chen was arrested in Oregon, while Lai was apprehended in Houston, Texas.

According to a federal criminal complaint filed in the Northern District of California, both men are accused of operating as unregistered agents of the Chinese government and carrying out intelligence-gathering activities for the MSS, the PRC’s principal civilian spy agency responsible for foreign intelligence and political security.

The complaint alleges that Lai recruited Chen to work for the MSS in 2021. In January 2022, the two allegedly met in Guangzhou, China, where they coordinated a “dead drop” operation, leaving a backpack containing at least $10,000 in cash at a day-use locker in Livermore, California. This payment, investigators say, was part of a broader MSS strategy to support and fund espionage activities within the United States.

Chen and Lai allegedly continued their covert activities well into 2023, including surveillance and intelligence-gathering at U.S. Navy installations, and attempted recruitment of U.S. military personnel on behalf of the MSS. In 2022 and 2023, they reportedly visited a U.S. Naval installation in Washington State and a Navy recruitment center in San Gabriel, California, where Chen took photographs of a bulletin board listing the names, hometowns, and assigned programs of Navy recruits—many of whom listed their hometown as “China.” The DOJ believes these photos were transmitted to a handler in China.

The MSS allegedly provided Chen with detailed instructions on how to engage and recruit service members, including how to discuss payments, suggest preferred job assignments within the Navy, and reduce his risk of detection.

Investigators further allege that Chen initiated contact with a U.S. Navy service member through social media, coordinated a tour of the USS Abraham Lincoln in San Diego, and shared information about the individual with MSS intelligence officers.

The complaint states that Chen traveled to Guangzhou in both April 2024 and March 2025, where he met directly with MSS officials to discuss payment and tasking. Lai, who arrived in the U.S. on a tourist visa in April 2025 claiming to be visiting for business purposes, was later observed traveling extensively within the country, including a cross-country trip from Houston to California, and returning to Junction, Texas, more than a month after his visa entry.

Both men are charged with acting as agents of a foreign government without prior notification to the U.S. Attorney General, a violation of federal law. If convicted, they face penalties of up to 10 years in prison and fines of up to $250,000.

“Hostile 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 John Eisenberg of the DOJ’s National Security Division. “Under my leadership, the National Security Division will continue to defend our nation and way of life by rooting out and exposing our adversaries’ clandestine spy networks.”

FBI Director Kash Patel emphasized the significance of the arrests in protecting national security:

“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.”

The investigation remains ongoing, with federal authorities urging anyone with information related to the case or other suspicious foreign influence activities to contact the FBI.