Undercover Shadows: Two Men Arrested in Espionage Plot Targeting U.S. Navy, Linked to Chinese Intelligence
What began as a routine visit and a simple handshake quickly unraveled into a complex espionage saga.
Federal authorities have apprehended two men accused of covertly working for China’s Ministry of State Security, conducting surveillance and gathering sensitive information on U.S. Navy personnel and operations.
Yuance Chen, a resident of Happy Valley, Oregon, and Liren Lai, who recently entered the U.S. on a tourist visa and resided in Houston, now face charges of acting as unregistered foreign agents.
According to court filings, their alleged spy network dates back to 2021, involving secret cash transfers, covert meetings, and surveillance at military sites.
A Covert Alliance and Cash Transfers
Documents reveal Lai recruited Chen to assist with intelligence-gathering efforts targeting the U.S. Navy. In early 2022, the duo traveled to Guangzhou, China, where they reportedly received $10,000 from Chinese intelligence operatives. The money was later stashed in a “dead drop” locker in Livermore, California—a classic espionage tactic for secret exchanges.
The pair then began probing naval facilities across the country, from Washington State to California. During these visits, Chen photographed personnel rosters, highlighting recruits with Chinese heritage, and passed those images to handlers overseas.
Coordinated Federal Response
The FBI, alongside the Naval Criminal Investigative Service (NCIS), arrested Chen and Lai on June 20. FBI Director Kash Patel emphasized the critical nature of thwarting such espionage attempts.
“These arrests underscore the serious and ongoing threat posed by foreign intelligence services operating within our borders,” Patel said. “Inter-agency collaboration remains vital to securing our nation’s military secrets.”
Further evidence revealed Chen’s recent trips to China for meetings with intelligence agents as recently as March 2025. Lai, too, reentered the U.S. under the guise of a business visit in April 2025.
Serious Charges, Grave Implications
Chen and Lai face up to 10 years in prison and significant fines for failing to register as foreign agents. The case has reignited fears about foreign espionage’s reach, highlighting how even routine military environments and lower-profile personnel can become targets for intelligence gathering.
As investigations continue, the case serves as a warning: espionage tactics are evolving, and vigilance across military and federal institutions is more critical than ever to safeguard national security.