As part of a multi-state investigation that included San Diego, two Chinese nationals have been jailed on suspicion of spying on U.S. military facilities and trying to recruit American service personnel, the FBI announced Tuesday.
The suspects, Yuance Chen, 38, and Liren “Ryan” Lai, 39, made their initial appearances in federal court Monday in Portland, Oregon, and Houston. The charges, issued out of the Northern District of California, include committing espionage offenses on behalf of the government of China.
Chen, a legal permanent U.S. resident who lives in Happy Valley, Oregon, and Lai, who traveled from China to Houston on a tourist visa in April, were arrested Friday on a criminal complaint charging them with overseeing and carrying out various offenses in the United States on behalf of China’s principal foreign-intelligence service, the Ministry of State Security (MSS).
Those activities allegedly included facilitating a “dead drop” cash payment for information about U.S. national security, gathering intelligence about U.S. Navy personnel and bases and assisting with efforts to recruit other people from within the American military as potential MSS assets, according to the FBI.
“This case was a complex, coordinated effort and is an example of outstanding counterintelligence work done by FBI San Francisco, Portland, Houston (and) San Diego, and the Counterintelligence Division,” FBI Director Kash Patel said in a news release.
Investigators have pursued cases in recent years involving allegations of Chinese espionage. A San Diego sailor was accused of providing military secrets to a Chinese intelligence officer two years ago, along with another sailor based out of Naval Base Ventura County in Port Hueneme.
As alleged in the new criminal complaint unsealed Monday, the Chinese government conducts intelligence activities against the United States through various means, including the MSS, which handles civilian intelligence collection and is responsible for counterintelligence and foreign intelligence, as well as political security.
According to the document, Lai recruited Chen to work on behalf of the MSS about four years ago. While in Guangzhou, China, in January 2022, they allegedly worked together to facilitate a payment of at least $10,000 on behalf of the MSS, working with other people in the U.S. to leave a backpack with the cash at a day-use locker at a recreational facility in Livermore.
Thereafter, Lai and Chen allegedly continued to work on behalf of the MSS, attempting to identify potential assets for recruitment within the ranks of the U.S. Navy.
In 2022 and 2023, according to the complaint, Chen was tasked by Lai to visit a naval installation in Washington State and a Navy recruitment center in San Gabriel, where Chen allegedly obtained personal information about recruits that he apparently transmitted to an MSS intelligence officer in China.
Chen is alleged to also have been instructed by the MSS on how to engage and recruit sailors and minimize his risk of exposure. He also is accused of contacting a Navy employee on social media and providing information about that person to the MSS.
Chen and Lai are charged with violating a federal statute that makes it a crime for a person to operate or agree to operate within the United States as an agent of a foreign government without notification to the U.S. attorney general. If convicted, they each face up to 10 years in prison and a maximum fine of $250,000.
The FBI San Francisco Field Office is leading the investigation, with additional support from the Naval Criminal Investigative Service.
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