Liren “Ryan” Lai, 39, traveled to Houston on a tourist visa in April, the USAO said. Yuance Chen, from Oregon, also faces federal charges of spying.
HOUSTON — Two Chinese nationals in Houston and Oregon were arrested on Friday, June 27, and charged with carrying out clandestine operations on behalf of their native China. The allegations include secret cash drops, photos of Navy recruits and a ship tour, according to the feds.
The feds say Liren “Ryan” Lai, 39, traveled to Houston from China on a tourist visa in April. Yuance Chen, 38, is a legal resident of the U.S. who lives in Happy Valley, Oregon.
The allegations in the criminal complaint include:
- Overseeing and carrying out various clandestine intelligence taskings in the United States on behalf of the People’s Republic of China (PRC) government’s principal foreign intelligence service, the Ministry of State Security (MSS).
- Providing national security information about U.S. Naval bases and servicemembers.
- Recruiting other individuals from within the U.S. military as potential MSS assets.
“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,” FBI Director Kash Patel said. “This case was a complex, coordinated effort and is an example of outstanding counterintelligence work done by FBI Houston, Portland, San Francisco, San Diego, and the Counterintelligence Division.”
The feds say the MSS spends years recruiting and cultivating spies to work in the U.S. to obtain information on political, economic and security policies that might affect the PRC, along with military, scientific, and technical information of value to China.
“This case underscores the Chinese government’s sustained and aggressive effort to infiltrate our military and undermine our national security from within,” U.S. Attorney General Pam 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.”
The court documents outline other details about the pair’s alleged clandestine operations from 2021 to 2025.
- According to the feds, Lai recruited Chen to work on behalf of the MSS in or about 2021. While in Guangzhou, China, in January 2022, Lai and Chen worked together to facilitate a dead-drop payment of at least $10,000 on behalf of the MSS. A backpack with the cash was left inside a day-use locker at a recreational facility located in Livermore, California.
- After the 2022 dead drop, court documents say Chen was ordered to contact a Navy employee over social media. Later, in 2025, he arranged for a tour with the employee of the USS Abraham Lincoln and provided information about the employee to the MSS.
- In 2022 and 2023, Chen was assigned to visit a U.S. Naval installation in Washington State and a U.S. Navy recruitment center in San Gabriel, California. While in the recruitment center, Chen obtained photographs of a bulletin board containing the names, programs, and hometowns of recent Navy recruits, the majority of whom listed their hometown as “China.”
- The complaint also alleges that Chen received instruction from the MSS on what to say to potential recruits regarding potential payment that could be made by the MSS, preferred Naval job assignments for potential recruits, and methods for minimizing Chen’s risk of exposure.
- In 2023, Lai flew to the United States from the PRC and provided Chen with a cellphone that Chen then used to communicate with the MSS.
- In April 2024 and March 2025, Chen traveled to Guangzhou and met with MSS intelligence officers in April 2024 and March 2025 in order to discuss compensation and assignments.
- Lai traveled to Houston in April 2025, claiming that the purpose of his visit was related to his business as an online retail seller, and that he would be staying in the Houston area for two weeks. However, on May 9, 2025, more than four weeks after his arrival, Lai and an unidentified companion drove from Houston to Southern California, via New Mexico and Tucson, Arizona, before returning to Texas on May 15.
If convicted, Lai and Chen face up to 10 years in prison and fines up to $250,000.