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FIRST ON FOX: Two Chinese nationals face serious charges after they allegedly acted as agents of the People’s Republic of China’s government to collect intelligence about U.S. Navy service members and bases, while also recruiting other military members to carry out tasks for the country’s main foreign intelligence service, the Ministry of State Security (MSS).
The Department of Justice (DOJ) said Chinese national Yuance Chen, who resides in Happy Valley, Oregon, and Liren Lai, who traveled to Houston on a tourist visa in April 2025, were arrested on Friday. Both individuals face charges of overseeing and carrying out various clandestine intelligence tasks in the U.S. on behalf of the Ministry of State Security.
Along with assisting with the recruitment of potential MSS assets and gathering intel about service members and bases, the two men are accused of facilitating a “dead drop” payment of cash on behalf of the MSS.
The FBI arrested both men on Friday – Chen was arrested in Happy Valley while Lai was arrested in Houston – with help from the Naval Criminal Investigative Service (NCIS).
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Chinese national Yuance Chen, second from left, is accused of acting as an agent of the Chinese government to collect intelligence about U.S. Navy service members and bases. Chen was photographed on the deck of the USS Abraham Lincoln in January 2025, according to a criminal complaint filed in federal court. (US District Court for the Northern District of California)
“Today’s arrests reflect the FBI’s unwavering commitment to protecting our national security and safeguarding the integrity of our military,” FBI Director Kash Patel told Fox News Digital. “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. Our counterintelligence operations remain focused, vigilant, and relentless.”
Citing a criminal complaint filed in the Northern District of California, the DOJ said the government of the PRC conducts intelligence activities against the U.S. using various means, including the MSS, which is involved with collecting intelligence on civilians. The MSS is also responsible for foreign intelligence, counterintelligence and political security.
The complaint alleges that Lai recruited Chen to work for the MSS in 2021.
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The FBI arrested two Chinese nationals on June 27, who were accused of working in the U.S. as agents of a foreign country. (Getty Images)
The two men were in Guangzhou, China in January 2022, when they allegedly collaborated to facilitate a dead-drop payment of at least $10,000 on behalf of the MSS. The operation involved working with others in the U.S. to leave a backpack with the cash at a day-use locker in Livermore, California.
Lai and Chen continued working on behalf of the MSS after the cash drop payment and helped with identifying Navy individuals who might be willing to work on behalf of the MSS as well.
The DOJ said in 2022 and 2023, the two visited a U.S. Naval installation in Washington State as well as a Navy recruitment center in San Gabriel, California.
While at the recruitment center, Chen allegedly took photos of a bulletin board that contained the names, programs and hometowns of Navy recruits. The majority of those listed on the board noted that their hometown was “China,” and the photos appeared to be transmitted to an MSS intelligence officer in China, the DOJ claimed.
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Chinese national Yuance Chen is accused of facilitating a “dead drop” payment of cash on behalf of the Chinese government. (US District Court for the Northern District of California)
The DOJ also alleged that the MSS gave Chen instructions on what to say to potential recruits when it came to payment that could be made by the MSS, preferred Naval job assignments for potential recruits and methods to minimize Chen’s risk of being exposed.
Chen ultimately began to communicate with a member of the Navy on social media, the DOJ alleges, and arranged for a tour of the USS Abraham Lincoln in San Diego with the employee. Chen also sent information about the employee to the MSS, the complaint said.
In April 2024 and March 2025, Chen traveled to Guangzhou where he met with MSS intelligence officers, the complaint alleged, to discuss pay for specific tasks.
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Lai also allegedly traveled to Houston in April 2025 and claimed the purpose of the visit was related to his business as an online retailer. He also claimed he would be staying in Houston for two weeks.
But on May 9, 2025, which was more than four weeks after he arrived in the U.S., Lai was seen traveling in a car with a companion from Houston to California, and back to Junction, Texas, on May 15.
Chen and Lai have been charged with operating in the U.S. as an agent of a foreign government without notifying the U.S. attorney general. If convicted, both men face a fine of up to $250,000 and up to 10 years behind bars.
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“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,” Assistant Attorney General John Eisenberg of the Justice Department’s National Security Division said. “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.”