Liren “Ryan” Lai and Yuance Chen were each sentenced to 30 months in prison and three years of supervised release after admitting they worked as agents of China's Ministry of State Security, part of a scheme that included clandestine cash drops, surveillance photos of Navy installations, and efforts to recruit U.S. sailors for Chinese intelligence.
The two men pleaded guilty to conspiracy to act as agents of a foreign government without notifying the U.S. attorney general, according to Courthouse News Service. According to the Contra Costa Herald, the men were charged under 18 U.S.C. § 371 and 18 U.S.C. § 951 — a federal statute, according to GovInfo, that covers agents of foreign governments operating inside the United States. Both were sentenced by U.S. District Judge Jon S. Tigar, per the Herald's reporting, in a case tracked under docket number 4:25-cr-00186-JST.
How the Scheme Began
Court documents cited by the Herald say Lai and Chen began acting as agents of the MSS no later than May 2021, with Lai recruiting Chen into the operation and initially serving as an intermediary between Chen and MSS intelligence officers. As reported by Navy Times, after Lai recruited Chen to work with the MSS around 2021, the two began identifying human targets within the U.S. Navy as part of an effort to assist in recruiting potential intelligence assets from the American military.
By January 2022, the pair had helped arrange a dead-drop payment of at least $10,000, coordinating with individuals in the United States to leave the cash in a backpack inside a locker at a recreational facility in Livermore, California, the same outlet reported. Chen went on to collect detailed biographical information on U.S. Navy personnel and a Navy civilian employee who were viewed as potential intelligence targets, per the government sentencing memorandum described by the Herald.
Photos of Navy Bases and Recruiting Stations
Chen's surveillance work extended to physical locations tied to the Navy. The report notes that Chen photographed sailors and recruits at a Navy recruiting station in Southern California, capturing images and video of military recruits and active-duty sailors inside the facility. He also obtained photographs of Naval Base Kitsap in Bremerton, Washington, according to the same account.
In March 2023, Lai traveled to the United States and delivered a cell phone to Chen for covert communications with the MSS — communications Chen himself referred to as a “state secret,” per the Herald's reporting. Chen later received assignments directly from MSS officers, traveling to China in both 2024 and 2025 to meet with intelligence officials and receive additional assignments concerning U.S. service members.
A Second Cash Drop in Phoenix
Lai traveled from China back to the United States in April 2025 for further MSS assignments, the Herald reported. The following month, the MSS directed him to travel to Phoenix to facilitate another clandestine cash payment, this time approximately $20,000 delivered in a parking garage — a detail also described by Courthouse News Service as “another dead drop of $20,000 in a parking garage in Phoenix.”
Lai and Chen were arrested on June 27, 2025, during a coordinated FBI counterintelligence and law enforcement operation, the Herald reported, matching Courthouse News Service's account that the men were taken into custody in an FBI operation that same month. A federal grand jury in the Northern District of California returned an indictment against both men on July 1, 2025, charging them with conspiracy and acting as agents of a foreign government without prior notification.
Guilty Pleas and Sentencing
Lai pleaded guilty to both offenses on December 12, 2025, and Chen followed on February 20, 2026, according to the Herald. The FBI's San Francisco field office led the investigation, with the FBI's Portland, Houston and San Diego field offices and the Naval Criminal Investigative Service providing assistance — corroborated by Navy Times, which reported that “FBI San Francisco led the investigation, with collaboration from FBI offices in Portland, Houston and San Diego, as well as the Naval Criminal Investigative Service.” U.S. Attorney's Offices in the District of Oregon, the Southern District of Texas and the Southern District of California also provided operational support, per the Herald.
U.S. Attorney Craig H. Missakian said the defendants were directed by a foreign intelligence service to gather information about the U.S. military, a point Courthouse News Service also quoted him making directly. Missakian added that his office and federal law enforcement partners would continue working to prevent adversaries from undermining U.S. national security, and said the sentences demonstrated a commitment to holding accountable people who pose similar threats to the country, according to the Herald's account.
Conflicting Ages and a Diplomatic Pushback
Court records cited in sentencing coverage describe Lai as 40 and Chen as 39, according to a justice.gov statement. Earlier charging coverage from Navy Times had identified the pair differently, reporting that “Yuance Chen, 38, and Liren “Ryan” Lai, 39, appeared in federal court June 30” — a discrepancy that remains unresolved between the two accounts.
China's Foreign Ministry pushed back on the broader narrative around the case, with a spokesperson saying, “We have always opposed the hype of so-called Chinese spies,” according to Reuters. Reuters also reported that the Justice Department did not disclose details about who supplied national security information or which military members were targeted for recruitment, leaving key elements of the alleged recruitment effort undefined.
Part of a Broader Pattern
The case fits into a string of recent Justice Department actions against alleged Chinese intelligence operations in the United States. A former U.S. Navy sailor convicted of spying for China was sentenced to 200 months in prison, according to a separate justice.gov announcement, while Chinese national Ji Chaoqun was sentenced to eight years in prison for acting as an unregistered agent of China, per another justice.gov release. A former Army reservist was also convicted of acting as an unregistered agent of China, and a California woman was separately arrested on allegations she acted as a Chinese agent while spying on relatives of a high-ranking Taiwanese government official, according to justice.gov statements on each case.
