$10,000 in a locker: How a Chinese spy network in the US was discovered

The U.S. Department of Justice announced the arrest of two Chinese nationals accused of acting as agents of the People's Republic of China government without notifying U.S. authorities.

"Two Chinese nationals were discovered spying on our Navy and attempting to recruit American service members to serve as the CCP's intelligence service. Our FBI will not tolerate this... Espionage on American soil will be met with full force ," said FBI Director Kash Patel.

They are Yuance Chen, 38, a legal resident of Oregon, and Liren “Ryan” Lai, 39 , who entered the country with a tourist visa in April 2025. Both were arrested on June 27 of this year in Happy Valley, Oregon, and Houston, Texas, respectively.

According to the criminal complaint filed in the Northern District of California , the suspects allegedly conducted intelligence work for the Ministry of State Security (MSS), China's primary civilian intelligence agency. Their activities included undercover payments, data collection on naval recruits, and efforts to recruit active-duty members of the U.S. Navy.

The federal investigation details that Lai recruited Chen in 2021. In January 2022, the two collaborated on a “dead drop” — a covert delivery without direct contact — of $10,000 in cash in Livermore, California.

Chen also allegedly visited naval bases and recruitment centers to obtain personal information that he then passed on to MSS officers in China.

Chen traveled twice to Guangzhou, in April 2024 and March 2025, to meet with MSS spies. Lai, meanwhile, made a suspicious road trip from Houston to California in May, under the guise of business activities. Both face up to 10 years in prison and fines of $250,000 if convicted.