Chinese nationals charged with spying for Beijing inside U.S., officials say

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WASHINGTON — Two Chinese nationals have been charged with spying inside the United States on behalf of Beijing, including by taking photographs of a naval base, co-ordinating a cash dead-drop and participating in efforts to recruit members of the military who they thought might be open to working for Chinese intelligence.

The case, filed in federal court in San Francisco and unsealed Monday, is the latest Justice Department prosecution to target what officials say are active efforts by the Chinese government to secretly collect intelligence about American military capabilities — a practice laid bare in startling fashion two years ago with China’s launching of a surveillance balloon that U.S. officials ultimately shot down over the coast of South Carolina.

“This case underscores the Chinese government’s sustained and aggressive effort to infiltrate our military and undermine our national security from within,” Attorney General Pam Bondi said in a statement announcing the case. “The Justice Department will not stand by while hostile nations embed spies in our country — we will expose foreign operatives, hold their agents to account, and protect the American people from covert threats to our national security.”

Officials identified the defendants as Yuance Chen, 38, who arrived in the U.S. on a visa in 2015 and later became a lawful permanent resident, and Liren “Ryan” Lai, 39, who prosecutors say lives in China but came to the U.S. sporadically, including this past spring as part of an effort to supervise clandestine espionage operations on behalf of China’s Ministry of State Security (MSS).

The two were arrested on charges of secretly doing China’s bidding without registering as foreign agents with the Justice Department, as required by law. It was not immediately clear if they had lawyers. A spokesperson for the Chinese Embassy in Washington did not immediately return a message seeking comment Tuesday.

According to an FBI affidavit filed in connection with the case, investigators believe Lai had been developing Chen to be a Chinese intelligence asset since at least mid-2021.

Their activities, the FBI says, included co-ordinating on a dead-drop of at least $10,000 in cash to another person who was operating at the direction of the MSS. They also participated and arranged surveillance of a navy recruiting station in California and navy base in Washington state, including through photographs that Chen is accused of taking and that investigators believe were transmitted to Chinese intelligence.

Authorities say Lai and Chen also discussed recruiting navy employees to work for China, with Chen at one point obtaining names, hometowns and programs of recent recruits. Many listed China as their hometown and investigators believe the information was sent to China, the FBI affidavit says.

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The affidavit recounts conversations aimed at assessing whether individual navy employees would make for good recruits for Chinese intelligence.

In one instance, the FBI said, Chen sent Lai the name of a navy employee and wrote: “I found out. His mother is Chinese. His father and mother did not get along and the mother was given custody when he was 8 years old. That is why he uses his mother’s last name.”

The case is one in a series concerning Chinese intelligence-gathering, sometimes related to the U.S. military.

In August 2023, for instance, two navy sailors were charged with providing sensitive military information to China, including details on wartime exercises, naval operations and critical technical material.

“Adverse 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, the head of the Justice Department’s National Security Division, said in a statement.